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    04 Activity 1 Managerial

    Uploaded by

    Ralph Louise Ponciano
    The document provides information about a new product being introduced by XYZ Company in August. It includes the selling price per unit, variable costs per unit, and monthly fixed costs. The solutions calculate: 1) The break-even point is 12,000 units or P432,000 pesos. 2) The margin of safety is 3,000 units or P108,000 pesos. 3) To earn a profit of P12,000, desired sales are 14,000 units or P504,000 pesos.

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    04 Activity 1 Managerial

    Uploaded by

    Ralph Louise Ponciano
    112 views3 pages
    The document provides information about a new product being introduced by XYZ Company in August. It includes the selling price per unit, variable costs per unit, and monthly fixed costs. The solutions calculate: 1) The break-even point is 12,000 units or P432,000 pesos. 2) The margin of safety is 3,000 units or P108,000 pesos. 3) To earn a profit of P12,000, desired sales are 14,000 units or P504,000 pesos.

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    The document provides information about a new product being introduced by XYZ Company in August. It includes the selling price per unit, variable costs per unit, and monthly fixed costs. The solutions calculate: 1) The break-even point is 12,000 units or P432,000 pesos. 2) The margin of safety is 3,000 units or P108,000 pesos. 3) To earn a profit of P12,000, desired sales are 14,000 units or P504,000 pesos.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    112 views3 pages

    04 Activity 1 Managerial

    Uploaded by

    Ralph Louise Ponciano
    The document provides information about a new product being introduced by XYZ Company in August. It includes the selling price per unit, variable costs per unit, and monthly fixed costs. The solutions calculate: 1) The break-even point is 12,000 units or P432,000 pesos. 2) The margin of safety is 3,000 units or P108,000 pesos. 3) To earn a profit of P12,000, desired sales are 14,000 units or P504,000 pesos.

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    © All Rights Reserved
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    BM1915

    NAME: PONCIANO, RALPH LOUISE GERON SCORE:

    ACTIVITY

    XYZ Company plans to introduce a new product in August. Information on selling price and related
    costs for the new product is shown below:

    Selling price per unit P36.00


    Variable cost per unit:
    Direct materials 15.00
    Direct labor 9.00
    Manufacturing overhead 4.00
    Sales commission 2.00
    Monthly fixed costs:
    Manufacturing overhead P40,000
    Administrative cost 32,000
    Actual units produced 15,000

    Required:
    a. Break-even point in units
    b. Break-even point in pesos
    c. Margin of safety in units
    d. Margin of safety in pesos
    e. Desired sales in units to earn a profit of P12,000
    f. Desired sales in pesos to earn a profit of P12,000
    SOLUTIONS:

    a. Break-even point in units

    BEP in units= Total Fixed Costs

                               CM per unit

                       = 72,000
                              6
                       = P12,000 units

    b. Break-even point in pesos

    BEP in pesos= Total Fixed Costs

                                  CM ratio

                          = 72,000
                             16.67%
                          = P432,000.00

    c. Margin of safety in units

    MS in units= Sales in units – BEP in units

                      = P15,000 – P12,000

                      = P3,000 units

    d. Margin of safety in pesos

    MS in pesos= Sales in pesos – BEP in pesos

                        = P540,000 – P432,000.00

                        = P108,000.00

    e. Desired sales in units to earn a profit of P12,000

    Desired sales in units= Total Fixed Costs + Target Profit

                                                      CM per unit

                                     = P72,000 + P12,000


                                                      6
                                     = 84,000

                                            6

                                     = P14,000

    a. Desired sales in pesos to earn a profit of P12,000


    Desired sales in pesos= Total Fixed Costs + Target Profit

                                                            CM ratio

                                         = P72,000 + P12,000


                                                        16.67%
                                         = 84,000

                                             16.67%

                                         = P504,000.00

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