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    She Diane

    Uploaded by

    Shenna Mae Librada

    Copyright:

    © All Rights Reserved
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    She Diane

    Uploaded by

    Shenna Mae Librada
    20 views4 pages

    Original Title

    SHE DIANE

    Copyright

    © © All Rights Reserved

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    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    20 views4 pages

    She Diane

    Uploaded by

    Shenna Mae Librada

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    You are on page 1of 4

    Problem 1

    1. Unit contribution margin for each product


    High Quality Bikes
    Sales Price ₱10,000
    Variable Costs
    Invoice Cost ₱5,500
    Sales Commission ₱500
    Total Variable Cost ₱6,000
    Contribution Margin ₱4,000

    2. Shop's Sales Mix


    High Quality Bikes 30%
    Medium Quality Bikes 70%

    3. Weighted Average Unit Contribution Margin


    (4,000 x 30%) + (3,000 x 70%)
    = 1,200 + 2,100
    = ₱3,300

    4. Break even sales volume in pesos


    Fixed Expenses
    BEP=
    Weighted average unit contribution margin
    ₱1,485,000
    BEP=
    ₱3,300
    BEP= 450 units

    Break even sales volume Sales Price Sales volume in pesos


    HQ 135 (450 x 30%) ₱10,000 ₱1,350,000
    MQ 315 (450 x 70%) ₱6,000 ₱1,890,000
    Total ₱3,240,000

    5. How many bicycle of each model must be sold to earn a target net income of 990,000
    1,485,000+990,000
    750 bicycles
    3,300
    Medium Quality Bikes
    Sales Price ₱6,000
    Variable Costs
    Invoice Cost ₱2,700
    Sales Commission ₱300
    Total Variable Cost ₱3,000
    Contribution Margin ₱3,000

    Sales volume in pesos


    ₱1,350,000
    ₱1,890,000
    ₱3,240,000
    15%
    Sales ₱ 16,000,000 ₱ 16,000,000
    Variable Expenses:
    Manufacturing ₱ 7,200,000 ₱ 7,200,000
    Commission ₱ 2,400,000 ₱ 3,200,000
    Total Variable Expense ₱ 9,600,000 60% ₱ 10,400,000
    Contribution Margin ₱ 6,400,000 40% ₱ 5,600,000
    Fixed Expenses
    Manufacturing Overhead ₱ 2,340,000 ₱ 2,340,000
    Marketing ₱ 120,000 ₱ 120,000
    Administrative ₱ 1,800,000 ₱ 1,800,000
    Interest ₱ 540,000 ₱ 540,000
    Total Fixed Expenses ₱ 4,800,000 ₱ 4,800,000
    Income before Income Taxes ₱ 1,600,000 ₱ 800,000
    Income Taxes (30%) ₱ 480,000 ₱ 240,000
    Net Income ₱ 1,120,000 ₱ 560,000

    1. BEP 2. Degree of Operating Leverage


    A. Fixed Expenses A. Contribution Margin
    CM Ratio EBIT

    4,800,000 6,400,000
    40% 2,140,000

    ₱ 12,000,000 2.99

    B. Fixed Expenses B. Contribution Margin


    CM Ratio EBIT

    4,800,000 5,600,000
    35% 1,340,000

    ₱ 13,714,286 4.18

    C. Fixed Expenses C. Contribution Margin


    CM Ratio EBIT

    7,125,000 7,600,000
    47.50% 1,015,000

    ₱ 15,000,000 7.49
    20% Own Force
    ₱ 16,000,000

    ₱ 7,200,000
    ₱ 1,200,000
    40% ₱ 8,400,000 52.50%
    35% ₱ 7,600,000 47.50%

    ₱ 2,340,000
    ₱ 2,520,000 120,000+2,400,000
    ₱ 1,725,000 1,800,000-75,000
    ₱ 540,000
    ₱ 7,125,000
    ₱ 475,000
    ₱ 142,500
    ₱ 332,500

    erating Leverage
    ntribution Margin
    EBIT

    6,400,000
    2,140,000

    2.99

    ntribution Margin
    EBIT

    5,600,000
    1,340,000

    4.18

    ntribution Margin
    EBIT

    7,600,000
    1,015,000

    7.49

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