AA Current Proposed
Variable cost ratio 60%
Contribution Margin per unit 36.00 35.00
Contribution Margin Ratio 40%
Fixed Costs 3,780,000.00 3,969,000.00
Selling Price per unit 90.00 90.00
Variable cost per unit 54.00 55.00
Units Pesos
BEP at the current level 105,000.00 9,450,000.00
BEPat the proposed level 113,400.00 10,206,000.00
BEP in units and pesos will increase
Margin of safety = break even point less sales Ass. 120,000 u Ass. 150,000
Current level 1,350,000.00 4,050,000.00
If the proposed project is pursued 2,754,000.00 5,994,000.00
Total CM current level 4,320,000.00
Total CM proposed level 5,040,000.00
RR
Level of Activity 3,750.00 4,800.00
Total VMC 145,687.50 186,480.00
Fx Mcost 14.80 11.5625
VMC per unit 38.85 38.85
TFx MC 55,500.00 55,500.00
Fx Selling and Admin per unit 2.70
Level of activity 4,800.00
Total Fx Selling and Admin 12,960.00
19,522.50
Variable selling and admin 6,562.50
Variable selling and admin per unit 1.75
Total Variable costs 40.60
Selling Price 43.00
Contribution Margin 2.40
Total Fixed Costs 68,460.00
Contribution margin 2.40
28,525.00
CC
Sales in Units 7,000.00 9,250.00 2,250.00
Cost of sales 106,470.00 128,880.00 22,410.00
Variable Manufacturing Cost per unit 9.9600
Total VMC 69,720.00 92,130.00
Fx Man cost 36,750.00 36,750.00
Use the high-low method to separa
Sales in Units 7,000.00 9,250.00 2,250.00
OPEX 20,010.00 22,552.50 2,542.50
Variable OPEX per unit 1.1300
Total Variable OPEX 7,910.00 10,452.50
Fx OPEX 12,100.00 12,100.00
SP CM
Total Variable cost 11.0900 13.8625 2.7725
Total Fx Cost 48,850.00
Fixed Cost 48,850.00
CM ratio 0.20 If CM ratio is .20 then VC ratio is .80
Break Even Point 244,250.00
Sales 128,228.12
COS 128,880.00
OPEX 22,552.50
Net Loss (23,204.375)
NN
Q1 Q2 Q3 Q4
Units Sold 36,000.00 67,250.00 43,600.00 78,150.00
Annual Fixed Cost 4,162,500.00
Selling price 50.00
VC oer unit 31.50
CM per unit 18.50
BEPu 225,000.00 Units sold in a year
Target OI 299,700.00
CM per unit 18.50
Addtl units 16,200.00 94,350.00
PHA
Y 2024 Y 2025
Varaible costing net income 645,000.00 835,000.00
Increase in inventory in 2024 30,000.00
Increase in inventory in 2025 10,000.00 increase to 40,000, not increase by 40,000
If there are increases in inventory, it means production exceeded sales. Thus, Operating Income unde
The difference in NI is due to capitalized fixed OH, or the delayed recognition of Fx OH
Increase in Inv 10,000.00
Fx OH per unit 2.50
Delayed Fx OH 25,000.00 860,000.00
LL
Sales 300,000.00 15.00 20,000.00
Total Variable Expense 180,000.00 9.00
Fixed Expense 90,000.00
Net Operating Income 30,000.00
Proposed
Increase in SP 17.25
Dec in Units sold 18,000.00
Sales 310,500.00
Total var Exp 162,000.00
Fixed Expense 90,000.00
Net OI 58,500.00 28,500.00 Increase
APC
Selling Price 120.00
Variable cost 108.00 95 + increase of 10 in DM + 3
CM per unit 12.00
Fx Costs 4,350,000.00 3,650,000+700,000
BEP 362,500.00
VV
Variable costing NI 60,000.00
Fx OH which was deferred 37,000.00
Absorption costing NI 97,000.00 the difference in net income is due to the Fx OH whic
BEP will increase
Margin of safety will increase
Total CM will increase
high-low method to separate mixed cost
CM ratio
0.20
244,250.00
ratio is .80
crease by 40,000
hus, Operating Income under AC will exceed OI under VC
ion of Fx OH
Units sold
me is due to the Fx OH which was deferred in the ending inv
