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Cara Company produces and sells a single product

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Cara Company produces and sells a single product. The selling price is P 25 and the variable costs is P 15 per unit. The company's fixed costs is P 100,000 per month. Average monthly sales is 11,000 units

1. The company's contribution margin per unit and as a percentage of sales is

10 units; 40%

P 10 per unit; 40%

P40 per unit; 16%

P 10 per unit; 60%

2. The company's break-even point is

250,000 units

P 10,000

25,000 units

10,000 units or P 250,000

3. If the company desires to earn profit of P 20,000 before tax, it must generate sales of

P 12,000

300,000 units

10,000 units or P 250,000

12,000 units or P 300,000

4. If the company pays corporate income tax at the rate of 32% and it desires to earn after-tax profit of P 20,400, it must generate sales of

P 325,000 or 13,000 units

16,375 units or P 409,375

P 13,000 or 325,000 units

12,040 units or P 301,000

5. How much sales (in pesos) must be generated to earn profit that is 8% of such sales?

P 230,000

P 208,333.33

P 270,000

P 312,500

6. How many units must be sold to earn profit of P 2 per unit?

12500

10000

312500

8333.33

7. With an average monthly sales of 11,000 units, the company's margin of safety is

1,000 units or P 25,000

11,000 units or P 275,000

10,000 units or P 250,000

P 10,000 or 25,000 units

8. At the present average monthly sales of 11,000 units, the company's operating leverage factor (OLF) is

9.09

11

90.9

6

9. If fixed costs will increase by P 20,000, the break-even point in units will increase(decrease) by

2000

12000

50000

10000

10. If variable costs per unit will go up by P 5, the pesos break-even sales will increase(decrease) to

P500,000

P250000

-250000

-500000

11. If the selling price will increase to P 30, the break-even point in units will

decrease to 6,666.67

decrease by P 166,666.75

remain unchanged

decrease by 6,666.67