Two different product lines are manufactured and sold by Cheche Manufacturing Corp. Monthly fixed cost amounted to P90,000. Data with respect to each product lines follows: | Product Cutie P 10.00 5.00 Product Sweetie P 8.00 2.00 Selling price per unit Variable cost per unit Original sales mix Required: a. Based on the original sales mix: 1. What is the weighted contribution margin per unit? 2. What is the combined units to break-even? 60% 40% 3. How many units each product line to be sold in order to break- even? Show proofs. b. Suppose the mix is 50-50 for each product line: 1. What is the weighted contribution margin percentage? 2. What is the combined amount of sales of the two products needed to earn P60,000 per month? 3. How much sales should each product line generated in order for Cheche to earn P60,000 per month? c. Based on the above data (letter b), what is the margin of safety in units, in peso and in percentage? d. Assuming the total combined sales of the two products amounted to P600,000, prepare a contribution format income statement for the month based on original sales mix.
Two different product lines are manufactured and sold by Cheche Manufacturing Corp. Monthly fixed cost amounted to P90,000. Data with respect to each product lines follows: | Product Cutie P 10.00 5.00 Product Sweetie P 8.00 2.00 Selling price per unit Variable cost per unit Original sales mix Required: a. Based on the original sales mix: 1. What is the weighted contribution margin per unit? 2. What is the combined units to break-even? 60% 40% 3. How many units each product line to be sold in order to break- even? Show proofs. b. Suppose the mix is 50-50 for each product line: 1. What is the weighted contribution margin percentage? 2. What is the combined amount of sales of the two products needed to earn P60,000 per month? 3. How much sales should each product line generated in order for Cheche to earn P60,000 per month? c. Based on the above data (letter b), what is the margin of safety in units, in peso and in percentage? d. Assuming the total combined sales of the two products amounted to P600,000, prepare a contribution format income statement for the month based on original sales mix.
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 7PB: Abilene Industries manufactures and sells three products (XX, W, and ZZ). The sales price and unit...
Related questions
Question
100%
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Recommended textbooks for you
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning