EXERCISE 6

1
Sales ₱600,000
Variable Expenses 420,000
Contibution Margin ₱180,000
Fixed Expenses 150,000
Operating Income ₱30,000

Selling Price ₱40

Variable Cost ₱28

Fixed Cost
BEP (units) =
(Selling Price/unit - Variable Cost / unit)

BEP (units) = ₱150,000

₱40 - ₱28
BEP (units) = ₱150,000
₱12
BEP (units) = 12,500 units

Fixed Cost
BEP (pesos) =
1- (Variable Expenses / Sales)

BEP (pesos) = ₱150,000

1- (₱420,000 / ₱600,000)

BEP (pesos) = ₱150,000

1- (0.7)

BEP (pesos) = ₱150,000

0.3
BEP (pesos) = ₱500,000

BEP (pesos) = BEP (units) x selling price/unit

BEP (pesos) = 12,500 units x ₱40/unit
BEP (pesos) = ₱500,000
EXERCISE 7

1
Per Unit
Selling Price ₱75.00
Variable Expenses 45.00
Contribution Margin 30.00

Current Monthly Sales:

Sales ₱75 x 3,000 units = ₱225,000
Variable Expenses ₱225,000 x 60% = ₱135,000
Contribution Margin ₱225,000 x 40% = ₱90,000
Fixed Expenses (given) = ₱75,000

Sales with Additional Advertising Budget:

Sales ₱225,000 + ₱15,000 = ₱240,000
Variable Expenses ₱240,000 x 60% = ₱144,000
Contribution Margin ₱240,000 x 40% = ₱96,000
Fixed Expenses ₱75,000 + ₱8,000 = ₱ 83,000

2
Sales with an Increased Variable Cost
Sales 3,000 x 115% = 3,450 units x ₱75/unit= ₱258
Variable Expenses ₱258,750 x 64% = ₱165,600
Contribution Margin ₱258,750 x 36% = ₱258,750 x 64 = ₱93,150
Fixed Expenses ₱75,000

New Ratio of Variable Expenses over sales

[₱75/( ₱45+ ₱3)]100 = 64%

New Ratio of Contribution Margin over sales

100% - 64% = 36%
 Percent of Sales:
100%
60%
40%

000 units = ₱225,000

x 60% = ₱135,000
x 40% = ₱90,000

+ ₱15,000 = ₱240,000
x 60% = ₱144,000
x 40% = ₱96,000
+ ₱8,000 = ₱ 83,000

15% = 3,450 units x ₱75/unit= ₱258,750

x 64% = ₱165,600
x 36% = ₱258,750 x 64 = ₱93,150
EXERCISE 8