1. A company is concerned about its operating performance as summarized below: Sales (P 12.50 pe unit) P 300 000 Variable Cost 180 000 Net Operating Loss (40 000) How many additional units should have been sold in order for the company to break-even? a. 16 000 b. 8 000 c. 24 000 d. 32 000 2. Caliao Co. is considering dropping a product. variable cost are P 8 pe unit. Fixed overhead cost, exclusive of depreciation have been allocated at a rate of P 3.50 per unir and will continue whether or not production ceases. Depreciation on the equipment is P 20 000 a yaer. if production is stopped, the equipment can be sold for P 18 000: if production continues however, it will be useless at the end of the first year and will have no salvage value. The selling price per unit is P 10. Ignoring taxes, the minimum units to be sold to break-even on a cash flow basis is: a. 5 000 units b. 4 500 units c. 1 800 units d. 36 000 units 3. Bruses Co. has the opportunity to increase annual sales by P 100 000 by selling to a new riskier group of customers. The bad debt expense is expected to be 15%, and collection cost will be 5%. The company's manufacturing and selling expenses are 70% os sales and its effective tax rate is 40%. If Bruses should accept this opportunities, the company's after-tax profit would increase by: a. P 18 000 b. P 9 000 c. P 10 000 d. P 6 000 4. Goltiao Co.'s operating pecentages were as follows: Goltiao's sales totaled P 2 000 000. At what sales level would Goltiao break-even? a. P 1 900 000 b. P 1 666 667 c. P 230 000 d. P 980 000 5. The following information relates to Ladiao's Corp., which produced and sold 50 000 units during a recent accounting period. For the next accounting period, if production and sales are expected to 40 000 units, the comp. should anticipate a contribution margin per unit of: a. P 7.30 b. P 13.30 c. P 3.10 d. P 8.12
