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    CVP Quiz

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    Joana Mica Surbona SIBUYO
    Gleciibee Company manufactures and sells mobile phone gadgets. Their most recent contribution margin format income statement shows sales of 20,000 units for P1,200,000 with contribution margin of P300,000 after variable expenses of P900,000 and fixed expenses of P240,000, resulting in net operating income of P60,000. The document then provides 5 calculation problems related to analyzing the company's financial performance and break-even point.

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    CVP Quiz

    Uploaded by

    Joana Mica Surbona SIBUYO
    303 views1 page
    Gleciibee Company manufactures and sells mobile phone gadgets. Their most recent contribution margin format income statement shows sales of 20,000 units for P1,200,000 with contribution margin of P300,000 after variable expenses of P900,000 and fixed expenses of P240,000, resulting in net operating income of P60,000. The document then provides 5 calculation problems related to analyzing the company's financial performance and break-even point.

    Original Description:

    Cost Volume Analysis

    Original Title

    CVP-QUIZ

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    Gleciibee Company manufactures and sells mobile phone gadgets. Their most recent contribution margin format income statement shows sales of 20,000 units for P1,200,000 with contribution margin of P300,000 after variable expenses of P900,000 and fixed expenses of P240,000, resulting in net operating income of P60,000. The document then provides 5 calculation problems related to analyzing the company's financial performance and break-even point.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    303 views1 page

    CVP Quiz

    Uploaded by

    Joana Mica Surbona SIBUYO
    Gleciibee Company manufactures and sells mobile phone gadgets. Their most recent contribution margin format income statement shows sales of 20,000 units for P1,200,000 with contribution margin of P300,000 after variable expenses of P900,000 and fixed expenses of P240,000, resulting in net operating income of P60,000. The document then provides 5 calculation problems related to analyzing the company's financial performance and break-even point.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    GLECIEBEE Company manufactures and sells mobile phone gadgets.

    The company’s contribution


    format income statement for the most recent year is given below:

    Total Per unit

    Sales (20,000 units) P1,200,000 P60


    Less: variable expenses 900,000 45
    Contribution margin P 300,000 P15

    Less: Fixed expenses 240,000

    Net operating income P 60,000


    ========

    REQUIRED:
    1. Compute the company’s contribution margin ratio and variable expense ratio.
    2. Compute the company’s break-even point in both units and peso sales. Use the equation
    method.
    3. Assume that sales increase by P400,000 next year, how much will the company’s net
    operating income increase?
    4. Refer to the original data. Assume that next year management wants the company to earn a
    minimum profit of P90,000. How many units will have to be sold to meet this target or
    desired profit?
    5. In an effort to increase sales and profits management is considering the use of higher quality
    materials for the mobile phone gadgets. The higher quality materials would increase
    variable costs by P3 per unit, but management could eliminate one quality inspector who is
    paid a salary of P30,000 per year. The sales manager estimates that the higher quality
    materials would increase sales by at least 20%. Required: (1 ) Prepare a contribution margin
    format income statement. (2) compute the new break-even point in both units and peso
    sales. Use the contribution margin method.

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