PE 5. Compute the answers to each of the followingindependent situations:1. ARC Company has fixed costs of P125,000. At thebreakeven point, 100,000 units are sold. If variable costsare P2.68 per unit, what is the price?2. Johnson Company has a breakeven point of 4,800 units. Atbreakeven, variable costs are P480,000 and fixed costs are720,000. What is the total revenue?3. Boo Company's current sales volume is 7,200 units withselling price of P15 per unit. The company has total fixedcosts of P720,000 within a range of 2,500 to 7,500. Atbreakeven point, how much total contribution margin doesBoo Company earn?

Break even point means where there is no profit no loss. Variable cost means the cost which vary…

Answered: 1. ARC Company has fixed costs of…

1. ARC Company has fixed costs of P125,000. At the breakeven point, 100,000 units are sold. If variable costs are P2.68 per unit, what is the price?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section14.A: Breakeven Analysis

Problem 4P

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Question

PE 5. Compute the answers to each of the following
independent situations:
1. ARC Company has fixed costs of P125,000. At the
breakeven point, 100,000 units are sold. If variable costs
are P2.68 per unit, what is the price?
2. Johnson Company has a breakeven point of 4,800 units. At
breakeven, variable costs are P480,000 and fixed costs are
720,000. What is the total revenue?
3. Boo Company's current sales volume is 7,200 units with
selling price of P15 per unit. The company has total fixed
costs of P720,000 within a range of 2,500 to 7,500. At
breakeven point, how much total contribution margin does
Boo Company earn?

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