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THEORY ANSWERS:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
A
B
C
B
A
C
D
B
A
D
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
D
A
D
C
D
D
B
D
C
A
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
D
D
B
A
D
A
C
C
B
B
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
A
D
C
C
A
A
C
C
D
B
A
A
C
B
C
C
C
B
B
A
A
A
B
A
61.
62.
63.
64.
65.
66.
67.
68.
69.
70.
71.
72.
73.
74.
A
B
C
B
C
B
A
D
B
C
A
C
C
A
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
C
C
A
D
B
B
C
D
D
D
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.
C
D
B
C
B
C
A
C
C
A
61.
62.
63.
64.
65.
66.
67.
68.
69.
A
C
D
D
D
A
D
A
B
101.
102.
103.
104.
105.
106.
107.
108.
109.
110.
111.
112.
113.
114.
B
A
A
A
A
A
D
D
B
C
B
B
B
A
121.
122.
123.
124.
125.
126.
127.
128.
129.
130.
131.
132.
133.
134.
A
D
A
B
A
B
B
B
A
C
B
C
D
C
PROBLEM ANSWERS:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
B
C
A
B
A
A
A
A
A
A
B
C
C
A
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
C
C
A
B
A
A
B
B
A
B
B
B
D
A
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
167
81.
82.
83.
84.
85.
86.
87.
88.
89.
90.
91.
92.
93.
94.
A
C
A
C
A
D
A
A
D
A
C
B
C
A
15. B
35.
16. A
36.
17. A
37.
18. C
38.
19. A
39.
20. C
40.
Solutions:
1.
B
A
C
B
D
A
55.
56.
57.
58.
59.
60.
B
D
A
B
A
B
75.
76.
77.
78.
79.
80.
A
D
B
A
A
B
95.
96.
97.
98.
99.
100.
A
D
C
B
B
A
115.
116.
117.
118.
119.
120.
B
C
A
B
C
B
135. A
136. B
137. D
Answer: B
Contribution Margin = Fixed costs
= P15,000
(Contribution Margin/Unit Sales) + Variable cost per unit
= Desired Minimum Sales Price
(P15,000 3,000) + (P7,500 3,000)
2.
7.50
Answer: C
Unit contribution margin (P50 - P30)
P 20.00
P10,000
After the break-even level, the amount of profit equals the unit
contribution margin multiplied by the number of units sold in
excess of break-even units.
The candidates should remember that the profit increases by the
amount of contribution margin brought by additional units sold.
3.
Answer: A
Cost of dinner
Favors and program
P 70.00
30.00
168
Fixed costs
(15,000 + 7,000 + 48,000 + 10,000)/250
320.00
Cost to be charged
P420.00
4.
Answer: B
5.
6.
Selling Price
Less: Variable Manufacturing Cost
10% Commission
P 60
( 30)
( 6)
P 24
Answer: A
Current break-even:
Pesos: (P32,000 0.40)
Units: [P32,000 P6)
Contribution margin per unit: P15 x 0.40
P80,000
5,333
P 6.00
1,600
Alternative solution:
New breakeven units (P32,000 x 1.3) P6
Less current breakeven units
6,933
5,333
1,600
169
7.
Answer: A
The amount of contribution margin per unit is constant within a
relevant range. The amount of profit is increased by the amount
of unit contribution margin.
Contribution margin per unit:
fixed cost breakeven unit sales
50,000 5,000 P10.00
At breakeven point, the profit is zero. Therefore, the profit at a
level of 5,001 units will be P10 which is the amount of
contribution provided by the unit (one unit) in excess of
breakeven point.
8.
Answer: A
CMR
= Fixed cost/Sales
= 100,000/800,000 = 12.50%
P150,000
100,000
P 50,000
170
9.
Answer: A
Current unit contribution margin (P32 P24)
Current break-even units (P400,000 P8)
New unit contribution margin (P40 - P24)
New break-even units (400,000 16)
Net decrease in breakeven units
(50,000 25,000)
10.
P8
50,000
P16
25,000
25,000
Answer: A
CM per unit: 220,000 / (100,000 80,000)
11.00
Fixed costs:
P880,000
80,000 x 11
11.
Answer: B
TCM Sales = CMR
Change in TCM: (600,000*0.2) (360,000*0.1)
CMR: Increase in TCM Increase in Sales
84,000 240,000
Breakeven sales
12.
90,300 0.35
Answer: C
171
84,000
35%
258,000
40,000
200,000
240,000
12.00
Answer: C
The company's degree of operating leverage is determined as follows:
Degree of operating leverage = Contribution margin Net income
Degree of operating leverage = P600,000 P240,000 = 2.50
14.
Answer: A
Increase in sales
Less variable costs and expenses
0.90 x 125,000
Additional profit before tax
Less additional tax 0.40 x 12,500
Additional profit
15.
125,000
112,500
12,500
5,000
7,500
Answer: B
Additional profit UCM = additional unit sales
= (40,000 + 8,000) (80-60)
= 2,400 units
172
16.
Answer: A
Total peso sales required
800,000*
Less prior sales
400,000
Answer: A
Contribution margin 50,000 x (5-3.50)
Less: Additional profit (250,000 x 0.10)
Additional fixed costs
Selling price
18.
= P3.50 0.70
75,000
25,000
50,000
P5.00
Answer: C
A shorter calculation of finding the amount of sales is to divide
breakeven sales by (1 MSR)
Sales = P600,000 (1 0.2)
P750,000
173
P750,000
Answer: A
Peso sales = FC/(CMR - ROS)
= P210,000/(0.40 - 0.10)
P700,000
CMR = 40%
A long computation of required sales uses the following equation:
S = P210,000 + 0.10S
0.40
0.40S = P210,000 + 0.10S
0.40S - 0.10S = P210,000
S = P210,000/(0.40 0.10)
S = P700,000
20.
Answer: C
Current number of units required to earn the target net profit:
[(P200,000 + P70,000) P9]
30,000
21.
Answer: C
CMR= 100% - (3.9 6.0) = 35%
BES = 1,400,000 .35
22.
4,000,000
Answer: C
New break-even point:
P874,000 P23
Current break-even point in units:
P770,500 P23
Increase in units: 38,000 - 33,500
Alternative solution: (P103,500 P23)
23.
38,000
33,500
4,500
4,500
Answer: A
The estimated cost of goods sold
= P565,000 + 0.35S*
*Sum of all percentages for variable production costs
= P565,000 + (P2,000,000 x 0.35)
= P1,265,000
24.
Answer: B
Peso sales required to earn 10% of sales;
FC/(CMR ROS)
175
= P36,000/(0.30-0.10)
= 180,000
25.
Answer: A
26.
138,000
124,200
13,800
35,000
21,200
Answer: B
DOL at P90,000 sales:
Sales
Variable costs
Total Contribution margin
Fixed costs
Profit
DOL
90,000
50,000
40,000
30,000
10,000
= TCM/OP
= 40,000/10,000
4 times
Answer: B
2006 DOL = 275,000/75,000
176
3.67
29.
P157,500
Answer: A
Peso sales 12,000/(0.40 0.1)
P40,000
Unit sales P40,000/10
4,000
Increased units 4,000 x 1.25
5,000
Revised contribution margin 5,000 x (9 6)
Less fixed cost
Revised profit
30.
P15,000
12,000
P 3,000
Answer: B
Projected cost of sales:
P800,000 + (P3,000,000 x 0.65)
31.
P2,750,000
Answer: B
Unit CM = Change in Profit Change in Sales
= 200,000 (100,000 75,000)
=8
Fixed costs = Breakeven units x UCM
75,000 x 8 =
600,000
32.
110%
Answer: B
Unit cost:
Materials (P36,000 24,000)
Labor (P54,000 24,000)
177
P1.50
2.25
0.35
P4.10
1.50
P5.60
Answer: D
Composite ratio:
X: 640,000 (720,000 + 640,000)
Y: 720,000 (720,000 + 640,000)
47.059%
52.941%
0.505882
P1,000,000
34.
Answer: A
Sales (500,000 x 1.10)
Variable cost
Contribution margin
550,000
300,000
250,000
P 470,590
35.
36.
Answer: B
Before-tax profit (24,000 0.6)
Add fixed costs
Total contribution margin
P 40,000
200,000
P240,000
P 6.00
6.00
P12.00
Answer: A
DOL
37.
= CM/OP
= 275,000/75,000
= 3.67 times
Answer: C
Peso sales : FC (CMR - Profit Margin)
= P210,000 (0.55 - 0.15)
= P525,000
CMR
38.
Answer: B
CMR: Change in Fixed Costs Change in Breakeven Sales
78,750 (975,000 750,000)
0.35
179
262,500
40.
Answer: D
UCM
= (70,000 x 1.20)+(40,000 x 3)
70,000 40,000
= P6.80
FC
BEU
= 392,000/6.80
= 57,647
Answer: A
Margin of safety in peso sales = Budgeted sales Breakeven sales
Margin of safety = P1M P.7M
41.
Answer: A
2006 Sales
Advertising Cost (75000 .6)
Required 2007 peso sales
42.
P300,000
Answer: A
180
1,000,000
125,000
1,125,000
1.75
1.80
7,200
7,000
200
Answer: C
WACM = (30 x 0.6) + (60 x 0.4)
Breakeven units: 630,000/42
Breakdown:
Product Standard
Product Deluxe
44.
P42
15,000
15,000 x 0.6
15,000 x 0.4
9,000
6,000
Answer: B
WACM = (4/7 x 0.40)+(3/7 x 0.93 = P0.62857
BE units = 7,600/0.62857 = 12,091
Baubles = 12,091 x 4/7 = 6,909
Trinkets = 12,091 x 3/7 = 5,182
45.
Answer: C
Total sales revenue per composite sales:
(12 x P5.25) + (10 x P7.50) + (6 x P12.25)
Total variable cost per composite sales:
(12 x P4.85) + (10 x P6.95) + (6 x P10.35)
Total contribution margin per composite sales
(P211.50 - P189.80)
181
P211.50
P189.80
P 21.70
3,500
Answer: C
WACMR = (.6 x .4) + (.4 x .15)
Fixed Costs = 225000 x 1.3
Sales (292500 + 48000) .3
47.
Answer: C
UCM
P360,000
Answer: B
BEV =
49.
30%
P 292,500
P1,135,000
600,000
16 12
P150,000
Answer: B
CMR
P432,000
182
50.
Answer: A
Profit
Profit
Fixed
Fixed
51.
Answer: A
Revised UCM = 25 19.80 (5 x 0.08)
BEU = 468,000/4.80
52.
P72,000
P4.80
97,500
Answer: A
The Company projected zero profit based on zero advertising
expenditure.
Additional CM (30,000 units @ 10)
P300,000
Less: Required profit
200,000
Maximum advertising cost
P100,000
53.
Answer: B
Cash-flow breakeven: 270,000 (100-60)
54.
6,750
Answer: A
CMR
BES
0.40 or 40%
= 320,000 0.40
P 800,000
183
Sales
55.
= 800,000 0.75
P1,066,667
Answer: B
The easier calculation of sales value of 60,000 units is to divide
the total annual costs by total cost ratio of 85% (100% - 15%).
56.
Sales required
= P1,912,500/0.85
P2,250,000
= 2,250,000/60,000
P37.50
Answer: D
Indifference Point = Change in Fixed Cost Change in Variable
Cost
Increase in fixed cost: 2 @ 15,000
P30,000
Decrease in variable cost (15% - 7.5%) 80
P6
Indifference point: 30,000 6
57.
Answer: A
WACM = (0.25 x 5)+(0.75 x 7)
= 6.50
BEU
58.
= 975,000/6.50
= 150,000
Answer: B
184
5,000 units
P120 +(1.20M/80,000)
Answer: A
Breakeven point:
Old policy: P80,000/7
New policy: P100,000/8
Increase in Breakeven point
60.
P 135
11,429
12,500
1,071
Answer: B
WACMR = (.4 x .2) + (.5 x.3) + (.4 x.5) = 0.43
BES = 1,290,000 .43 = P3,000,000
61.
Answer: A
Contribution margin
Fixed costs
Operating profit
P7,200,000
3,600,000
P3,600,000
Answer: B
The indifference point refers to the level of sales that would give
equal profit or total costs for the two alternatives
185
Answer: C
Variable cost ratio
= 2.25/7.50 = 30%
65.
Answer: B
Total Fixed Cost
Operating Profit
Total Contribution Margin
P154,000
26,000
P180,000
Selling price
Contribution margin per unit
(180,000 12,000)
Unit variable cost
P 20
15
P 5
Answer: C
Fixed costs
Operating profit
Contribution margin
600,000
120,000
720,000
1.80
Selling price
66.
(1.80 0.40)
P4.50
Answer: B
Contribution margin per machine hour: Contribution margin per
unit x No. of units produced per machine hours
67.
Product A
P20 x 6
P120
Product B
P16 x 8
P128
Answer: A
440,000 + (110,400/0.61) = 480,000
4 2.70
Revised variable cost: P2.40 + (P2.00 x 0.15)
68.
Answer: D
VC Ratio 375,00/625,000 = 60%
VC / unit 375,000/25,000 = P15
New VC = 15 + (4.50 2.50)= P17
SP = 17/0.6 = P28.33
69.
Answer: B
187
P2.70
Answer: C
Additional fixed cost/week:
31,200/52 = 600
Additional weekly sales to cover additional fixed cost:
600/0.25 = 2,400
Total Sundays sales (where 2,400 represents 25%):
2,400/0.25 =9,600
Alternative solution:
600 = 0.25 x 0.25S
600 = 0.0625S
S = 9,600
71.
Answer: A
New BES = 873,600/140 = 6,240
New FC = 840,000 x 1.04 = 873,600
New CM = 250 100 (100 x 0.10) = 140
Old BES = 840,000/150 = 5,600
Increase in BEU = 6,240 5,600 = 640
188
72.
Answer: C
Composite CM = 40 + (2 x 20)
= 80
Composite BE = 910,000/80
= 11,375
73.
Answer: C
Required new sales
45%
Answer: A
Breakeven units = 807,840 5.30
152,423
Answer: A
Indifference point
Answer: D
Processing hours per unit:
XY 7:
0.75/1 = 0.75 or 45 minutes
BD 4:
0.20/1 = 0.20 or 12 minutes
Answer: B
Units sold to earn P1M:
(1,000,000 + 1,000,000) / 5.25 = 380,952
The use of P1M fixed costs will require 380,952 units which are
within the first range.
78.
Answer: A
Fixed costs
79.
Answer: A
190
54.40
3.20
51.20
P2.00
Answer: B
81.
16.00
9.60
6.40
32.00
P14.40
P 8.40
Unit CM
Large: 29.00 (8.5 x 1.8)
Small: 14.00 ( 5.1 x 1.75)
= 13.70
= 5.075
Answer: C
CM /unit 405,000 1,800
BEV = 247,500 225
83.
225
1,100 units
Answer: A
Operating Profit: (2,100 x 225) 247,500 = P225,000
191
Answer: C
Contribution margin
Regular sales 1,500 x 225
Special sale 1500 x 175
Total Contribution
Fixed costs
Taxable income
Income tax
Net income
85.
337,500
262,500
600,000
247,500
352,500
141,000
211,500
Answer: A
Additional FC/ New Unit CM
61,500 200 = 307.5 tons
86.
Answer: D
New SP = 500 x .90
New VC 275 + 40
New CM
450
315
135
100%
70%
30%
Sales required:]
(Fixed costs + Before Tax profit) CMR
247,500 + (94,500 60)
87.
Answer: A
192
P1,350,000
Answer: A
Indifference point in peso sales:
0.4S P369,600 = 0.34S P316,800
0.06S = 52,800
S = P880,000
89.
Answer: D
Breakeven sales, Mountaineering:
369,600 35.20
=
10,500
Required contribution margin Touring
316,800 10,500
=
30.17
Present contribution margin Touring
27.20
Required decrease in variable cost per unit
2.97
90.
Answer: A
New breakeven point: 348,480 32.48
New UCM, Touring: 27.20 + (52.80 x 0.1)
New Fixed costs: 316,800 x 1.1
91.
10,730
= 32.48
= 348,480
Answer: C
The indifference point in number of pairs is 6,600. Inasmuch
that the expected level is 12,000 units, it is better to sell
Mountaineering because it has high leverage than the touring
model. Once the indifference point is exceeded, the one with
193
Answer: B
Fixed Costs:
Overhead
Marketing
Administrative
Interest
Total
2,340,000
120,000
1,800,000
540,000
4,800,000
Answer: C
If the commission rate is increased by 5%, the contribution
margin is decreased by 5% or a new contribution margin ratio of
35%
Breakeven sales next year.
4,800,000 / 0.35
94.
P13,714,286
Answer: A
Fixed cost under 15% commission plan
Increase in Fixed cost
Decrease in audit fee
Increased fixed costs
194
4,800,000
2,400,000
( 75,000)
7,125,000
Answer: A
Required sales, with 20% commission
and profit target of P1,120,000:
(P4,800,000 + 1,600,000) .35 = 18,285,714
96.
Answer: D
The question asked for is the indifference point. The peso sales
required to produce equal income can be easily calculated by
dividing the net increase in fixed costs by the increase in
contribution margin ratio:
Difference in CMR = 35% - 47.5 = 12.5%
Increase in fixed costs = 2,400,000 75,000
P2,325,000
P18.6M
Alternative Solution:
.355 4,800,000 = .475S 7,125,000
.125S = 2,325,000
S = P18,6M
97.
Answer: C
Billing charge per patient day
Variable cost per patient day
Contribution margin
Number of patient days for the year:
195
P650
150
P500
98.
P10,676,250/650
16,425
P150
Answer: B
Fixed costs for bed capacity
Salary, supervisory nurse
Total
P4,190,000
720,000
P4,910,000
9,820
Answer: B
In solving for the breakeven level where there are step fixed
costs, the logical approach is to test the validity of the ranges of
activities.
First Range:
Fixed costs based on capacity
Salaries:
Aides 21 x 50,000
1,050,000
Nurses 11 x 130,000
1,430,000
Supervisor 4 x 180,000
720,000
Total
Breakeven calculation: 7,390,000 500
196
4,190,000
3,200,000
7,390,000
14,780
7,390,000
50,000
130,000
7,570,000
15,140
994,500
101. Answer: B
Increase in variable cost should be calculated
based on additional patient days for 90 days at
P150 per patient day.
17 beds x 90 days x P150
P229,500
102. Answer: A
The increase in fixed cost based on bed capacity:
P4,190,250 60 x 20
P1,396,750
103. Answer: A
197
P4,537,500
105. Answer: A
Cash Flow Breakeven:
3,417,500 175
19,529
P4,537,500
( 800,000)
( 320,000)
P3,417,500
106. Answer: A
Breakeven sales based on 20% commission:
P100,000 0.20
P500,000
198
20%
107. Answer: D
Breakeven sales if the company employs its own salesmen:
(P350,000 0.35)
P1,000,000
The new contribution margin ratio is (20% + 15%)
35%
P13,333,333
109. Answer: B
The indifference point, the level of sales where the alternatives
will have equal profits:
.15S- 100,000 = .35S 350,000
2S = 250,000
S = P1,250,000
110. Answer: C
199
P17.50
P16.00
P280,000
21,000
Alternative Solution:
Total fixed costs
Less Contribution margin from 60,000 units
Remaining fixed costs to be covered by
additional units, each with CM of P16
P360,000
280,000
21,000
111. Answer: B
200
P 80,000
The units that will generate the desired profit of P150,000 for
the company, contributes P16 each. These units are the excess
of 21,000 units to breakeven.
Unit sales required:
21,000 + (150,000 P16)
30,375
112. Answer: B
The bonus plan of P1.00 per unit on sales made in excess of
breakeven point (21,000 units) will necessarily decrease the
contribution margin to P15.
The desired profit based on fixed cost:
25% x P360,000
Units required: 21,000 + (P90,000 15)
P90,000
27,000
113. Answer: B
In determining the minimum selling price for the 8,000 units
should consider the increased variable cost per unit and the
additional fixed cost. Any cost and losses on the first 16,000
units are irrelevant:
Variable cost per unit
P14.00
Additional fixed cost per unit (10,000 8,000)
1.25
Minimum selling price
P15.25
114. Answer: A
The net income for the month if the new equipment is acquired:
Contribution margin based on the present
system
P135,000
Add increase in contribution margin due to
decrease in variable cost (15,000 x 9)
135,000
201
270,000
225,000
Net income
115. Answer: B
P 45,000
2,500 units
10,000 units
12,500 units
116. Answer: C
The degree of operating leverage (DOL)
during the month that the new
equipment would be used: (270,000 45,000)
6X
8,000 units
202
P6.00
P126,000
119. Answer: C
Breakeven Units:
Fixed Costs Unit Contribution Margin
P6,000,000 300
20,000 pairs
120. Answer: B
Contribution margin (P18,000 x 300)
Less Fixed costs
Net loss
P5,400,000
6,000,000
P( 600,000)
121. Answer: A
The breakeven level for the sales outlet is expected to rise
because of additional commission, a variable cost item, and
such a commission is being paid for all pairs of shoes sold.
Breakeven in pairs of shoes:
6,000,000 (300 75)
122. Answer: D
203
26,667 pairs
P1,250,000
Alternative Solution:
Sales (25,000 x P800)
Variable costs (24,000 x P500)
Total contribution margin
Fixed costs
Profit
P20,000,000
12,750,000
7,250,000
600,000
P 1,250,000
123. Answer: A
Because the breakeven level is unchanged, the calculation of the
number of pairs to earn P900,000 is simple. The amount of the
desired profit will be contributed by the number of pairs of
shoes in excess of breakeven, each contributing P250.
20,000 +(P900,000 250)
23,600 pairs
124. Answer: B
300X P6,000,000
140X
X
= 440X P8,142,000
= P2,142,000
= 15,300 pairs
125. Answer: A
Breakeven peso sales: P1,800,000 0.3
204
P6,000,000
30%
126. Answer: B
Additional contribution margin
P800,000 x 0.30
Additional fixed cost
Increase in profit
P240,000
160,000
P 80,000
127. Answer: B
Sales 39,000 x P270
Variable cost 39,000 x P210
Contribution margin
Fixed cost
Net loss
P10,530,000
8,190,000
2, 340,000
2,400,000
P(
60,000)
128. Answer: B
Original unit contribution margin
(1,755,000 19,500)
Less increase in packaging cost
New Unit contribution margin
P90.00
7.50
P82.50
23,000
129. Answer: A
205
21,000
20,000
1,000
130. Answer: C
The computation of the indifference point for the two processes
can be determined by dividing the increase in fixed costs by the
decrease in variable cost per unit because the selling price was
unchanged.
Indifference Point: P720,000 30
24,000
131. Answer: B
If the level of sales is higher than the indifference point, the one
with higher leverage, i.e., higher fixed costs and lower unit
variable cost, will provide higher income.
The automated
process has the higher leverage and therefore, it has higher
income:
Difference in income: (26,000 24,000)30
P60,000
132. Answer: C
Breakeven units = Fixed costs Unit contribution margin
P100,000 (P400 P200)
500 units
206
133. Answer: D
Step 1: Compute before-tax profit:
P240,000 (1.0 0.4)
P400,000
2,500 units
Alternative Solution:
Profit = Sales Variable costs Fixed costs
P400,000 = P400X P200X P100,000
P500,000 = P200X
X = 2,500 units
134. Answer: C
Revenue
(350 x P400) + (2,700 x P360)
Variable costs (3,050 x P200)
Contribution margin
Fixed expenses
Operating income
Income tax
Net income
P1,112,000
610,000
502,000
100,000
P 402,000
160,800
P 241,200
135. Answer: A
Revenue (350 x P400) + (2,200 x P370)
Variable costs (350 x P200) + (2,200 x P175)
Contribution margin
Fixed expenses
Operating income
Income tax
Net income
207
P 954,000
455,000
499,000
100,000
399,000
159,600
P 239,400
136. Answer: B
Revenue (350 x P400) + (2,000 x P380)
Variable costs (2,350 x P200)
Contribution margin
Fixed costs
Operating profit
Income tax
Net income
P 900,000
470,000
P 430,000
90,000
340,000
136,000
P 204,000
137. Answer: D
Before tax profit objective (240,000 0.6)
Fixed costs
Total contribution margin required
Less contribution margin made on units sold
January May (350 x 200)
P400,000
100,000
500,000
P430,000
70,000
P437,500
430,000
P
208
7,500