Republic of the Philippines

Central Philippines State University

VICTORIAS CAMPUS
Hda. Estrella, Barangay XIV, Victorias City, Negros Occidental 6119

TOPIC 2: COST VOLUME PROFIT (CVP) ANALYSIS

Elle Corporation produces and sells a single product. The selling price is P25 and the
variable cost is P15 per unit. The corporations fixed cost is P100,000 per month.
Average monthly sales is 11,000 units.

1. The corporations contribution margin per unit (CMU) and as a percent of sale (CMR)? A
a. P10 per unit;40% c. 10 units; 40%
b. P40 per unit; 160% d. P10 per unit;60%

2. The corporation breakeven point is? C

a. P10,000 c. 10,000 units or P250,000
b. 250 units d. 250,000 units or P10,000

3. If the corporation desires to earn a profit of P20,000 before tax, it must generate D
sales of?
a. P12,000 c. 10,000 units or P250,000
b. 300,000 units d. 12,000 units or P300,000

4. If the corporation pays corporate income tax at the rate of 30% and it desires to earn A
after-tax profit of P21,000, it must generate sales of?
a. P325,000 or 13,00 units c. 12,040 units or P301,000
b. P13,000 or 325,000 units d. 16,375 units or P409,375

5. How much sales (in peso) must be generated to earn a profit that is 8% of such sale? B
a. P270,000 c. P208,333.33
b. P312, 500 d. 230,000

6. How many units must be sold to earn profit of P2 per unit? C

a. 8,333.33 c. 12,500
b. 10,000 d. 312,500

7. With an average monthly sales of 11,000 units, the corporations margin of safety is? A
a. 1,000 units or P25,000 c. 10,000 units or P250,000
b. 11,000 units or P275,000 d. P10,000

8. The margin of safety ratio (MSR) and the break even sales ratio (BESR) are? A
MSR BESR
a. 9% 91%
b. 40% 60%
c. 91% 9%
d. 60% 40%

9. At the present average monthly sales level of 11,000 units, the corporations operating leverage B
factor (OLF) is?
a. 6 c. 0.09
b. 11 d. 90.9
 Republic of the Philippines
Central Philippines State University
VICTORIAS CAMPUS
Hda. Estrella, Barangay XIV, Victorias City, Negros Occidental 6119

10.If fixed cost will increases y P20,000. the break even point in units will increase (decrease) by? D
a. 12,000 c. 50,000
b. 10,000 d. 2,000

11.If variable cost per unit will go up by P5, the peso break even sales will increase (decrease) to? A
a. P500,000 c. (P500,0000
b. 250,000 d. (P250,000)

12. If selling price will increase to P30, the break even point in units will?
a. remain unchanged c. decrease to P6,666.67
b. decrease by P166,666.75 d. decrease by 6,666.67

Following information pertains to X company's two products:

Digicam Videocam
Break even point in units 360 240
Selling price P4,500 P14,450
Varuable cost P2,250 5,000

13. What is the weighted average contribution margin? B

a. P11,500 c. P19.17
b. P5,050 d. 25,250

14. How much is the total fixed cost? A

a. P3,030,000 c. P2,010,000
b. P5,040,000 d. 5,050

15. How many units of each product should be sold if the company desires to earn profit D
before tax of P1,515,000?
Digicam Videocam
a. 900 900
b. 360 240
c. 360 540
d. 540 360