Break-Even Quiz

MULTIPLE CHOICE - PROBLEMS
The Avengers Company is trying to do cost volume profit analysis with the
following information for the month of August
P1,100,000
280,000
660,000
40
Sales
Total Fixed cost
Total variable costs
Unit price
1.The operating income of the Avengers Company is
a. P160,000
b. P190,000
c. P240,000
d. P440,000
2.What is the break-even point in units?
a. 14,000 units
b. 25,000 units
C. 28,000 units
d. 35,000 units
3.If the company desires a profit of P80,000, how many must be sold?
a. 30,000 units
b. 35,000 units
c. 36,000 units
d. 45,000 units
4.The margin of safety is
a. P100,000
b. P200,000
c. P300,000
d. P400,000
The Orange Company plans to sell a new product. The selling price is expected to
be P 150 per unit. The company is able to produce 15,000 units but the company's
marketing manager feels that a more realistic level of sales would be 12,000 units.
Variable cost is estimated at P70 per unit. Total fixed costs will be P 900,000
5.The break-even sales
a. 10,000 units
b. 11,250 units
c. 16,000 units
d. 18,000 units
6. How much is the income (loss) if the company sells all the units it can produce
a. P (87,500)
b. P122,500
c. P300,000
d. P330,000
7. If the company desires to earn P400,000 before tax at full capacity, what selling
price must be charged
a. P 80.00
b. P 90.00
c. P 95.00
d. P100.00
Donna Company manufactures and sells two products: Product A and Product B.
The two products have the following characteristics
Product B
P30.00
900,000
24.00
Product A
P 50.00
750,000
Selling price per unit
Sales revenue
Variable cost per unit
30.00
Total fixed cost for the company was P320,000 but increase to P400,000 at
production levels over 100,000. Selling price and variable cost per unit are the
same at all production levels
8.Assuming a constant product mix, what is the break-even in units?
a. 10,000 units
b. 16,000 units
c. 25,000 units
d. 30,000 units
.or tne company to earn a profit of P400.000, assuming a constant product mix,
how many units must be sold
a. 25,000 units
b. 37,500 units
c. 50,000 units
d. 75,000 units
The following costs have been estimated based on sales of 30,000 units
Percent Variable
Total annual cost
100%
100
50
30
P 300,000
250,000
250,000
150,000
Direct materials
Direct labor
Manufacturing overhead
Selling and administrative
10.What selling price will result in a 40% contribution margin
a. P33.25
b. P39.58
c. P52.78
d, P60.00
T1. What selling price will yield a projected income of P50,000?
a. P35.20
b. P36.94
c. P41.80
d. P42.25
Happy Face Company has fixed cost of P500,000 per year, variable cost of P30
per unit, and a selling price of P50 per unit.
12. At a production level of 30,000 units, how much is the operating income?
a. P 50,000
b. P 100,000
c. P 150,000
d. P 200,000
13. The break-even sales in units
a. 10,000 uits
b. 25,000 units
c. 27,500 units
d. 30,000 units
14. The number of units the company must sell to earn an income of P100,000?
a. 10,000 units
b. 25,000 units
C. 27,500 units
d. 30,000 units
Alexis Company operated at normal capacity during the current year producing
50,000 of its single product.. Sales totaled 40,000 units at a selling price of P20
per unit. Variable manufacturing cost were P8 per unit and variable selling and
administrative were P 4 per unit. Fixed cost were incurred uniformly throughout
the year and amounted to P188,000 for manufacturing and P64,000 for P64,000 for
selling and administrative.
15.The break-even point in pesos is
a. P 420,000
b. P 470,000
c. P 630,000
d. P 732,000
The Presley Company manufactures two products, Product X and Product Y. The
following are projections for the coming year,
Product Y
P 112,500
7,500
Product X
P 100,000
10,000
Sales
Sales in units
Expenses
P 24,000
75,000
14,000
P 20,000
60,000
20.000
Fixed
Variable
Projected profit
16.Assuming that the facilities are not jointly used, the breakeven output (in
units)for Product X would be
a. 8,000
b. 7,000
c. 6,000
d. 5,000
The Power Company sells its product at P15.00 per unit. The variable cost is
P9.00 per unit. Total fixed cost is P12,000. Current sales amounted to P45,000
17.If sales decrease by 500 units, by how much would fixed expenses have to be
reduced to maintain the current net income?
a. P7,500
b. P6,000
c. P3,000
d. P2,000
18.At a break-even point of 400 units, the variable costs P400 and the fixed costs
were P200. What will the 401s unit sold contribute to profit before tax?
a. Po
b. PO.60.
C. P1.00
d. P1.50
The statement of comprehensive income for Blanche Company for the current
year is presented below
Sales
Variable costs
Contribution margin
Fixed costs
Income before tax
P 400,000
125.000
275,000
200,000
P 75.000
19.What is the degree of operating leverage of Blanche Company
a.3.67
b.1.45
C. 5.33
d. 1.67
The following information pertains to Ellery Company. Budgeted sales -
P1,000,000, break even sales P700,000, budgeted contribution margin
P600,000.
20.The margin of safety for the Ellery Company is
a. P300,000
b. P400.000
c. P500,000
d. P600,000

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What is the break-even point in units for The Avengers Company?

What is the break-even point in units for The Avengers Company?

If the sales of The Orange Company decrease by 500 units, by how much would fixed expenses have to be reduced to maintain the current net income?

If the sales of The Orange Company decrease by 500 units, by how much would fixed expenses have to be reduced to maintain the current net income?

MULTIPLE CHOICE - PROBLEMS

following information for the month of August

Total Fixed cost

Total variable costs

1.The operating income of the Avengers Company is

2.What is the break-even point in units?

4.The margin of safety is

5.The break-even sales

price must be charged

The two products have the following characteristics

Selling price per unit

Variable cost per unit

same at all production levels

8.Assuming a constant product mix, what is the break-even in units?

how many units must be sold

Total annual cost

Selling and administrative

10.What selling price will result in a 40% contribution margin

T1. What selling price will yield a projected income of P50,000?

per unit, and a selling price of P50 per unit.

13. The break-even sales in units

15.The break-even point in pesos is

following are projections for the coming year,

units)for Product X would be

reduced to maintain the current net income?

year is presented below

Income before tax

19.What is the degree of operating leverage of Blanche Company

The following information pertains to Ellery Company. Budgeted sales -

P1,000,000, break even sales P700,000, budgeted contribution margin

20.The margin of safety for the Ellery Company is

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