Online * Manila * Cebu * Bacolod * Cagayan De Oro * Davao

Since 1977

MANAGEMENT SERVICES TRINIDAD/ALENTON/TAYSON

MS 3903 – Costs Volume Profit Analysis – ONLINE OCTOBER 2025

Cost-volume-profit (C-V-P) analysis as a tool for Degree of Operating Leverage. A measure, at a given
planning and control. level of sales, of how a percentage change in sales
I. C-V-P analysis: volume will affect profits. DOL is computed:
A. a procedure that examines changes in costs and
volume levels and the resulting effects on profit. DOL = Total contribution margin/Net income
B. Sales Revenue – Variable Costs – Fixed Costs =
Profit % Increase in Net Income = (% Increase in Sales x
C. Tool for both planning and control. DOL)
1. Can calculate net income when sales volume
is known STRAIGHT PROBLEMS
2. Can determine the level of sales need to
reach a targeted amount of income. PROBLEM NO. 1.
D. Only used under certain conditions and when The following data are available for Merced Company’s
certain assumptions hold true. one product:
1. The behavior of variable and fixed costs can Unit selling price P80
be measured reasonably. Unit variable cost
2. Costs and revenues have a close linear Manufacturing 28
approximation. Selling and Administrative 22
3. Efficiency and productivity hold steady within Fixed costs
the relevant range. Manufacturing 480,000
4. Cost and price variables hold steady during Selling and Administrative 120,000
the period being planned. Unit Volume 25,000
5. The product sales mix does not change
during the period being planned. Requirements:
6. Production and sales volume are 1. Total contribution margin
approximately equal. 2. Break even volume in units and pesos
3. Margin of safety in units, pesos and ratio
Break-even sales is the point or sales volume where total 4. Degree of operating average
revenues equal total costs. This is the level of activity 6. Number of units required to earn a 15% return on
where there neither profit nor loss. At break-even point, sales.
the total contribution margin equals total fixed expenses. 7. Selling price that Merced should charge to raise
the operating profit by 50 percent based on the
Methods of Computing Break-even Point given cost structure, still selling 25,000.
1. Equation method or algebraic approach 8. Assuming Merced is to pay 40% income tax, how
2. Contribution margin method or formula approach much sales in units are required to:
3. Graphical calculation a. breakeven?
b. earn P150,000 of net income?
Contribution Margin. Unit contribution is the difference
between the unit selling price and the unit variable PROBLEM NO. 2.
expenses. Total contribution margin is difference Cindy, Inc., sells a single product. The company's most
between the total revenues and the total variable recent income statement is given below.
expenses. Sales (5,000 units) P750,000
Less variable expenses 300,000
Sales Mix. The composition of total sales in terms of Contribution margin 450,000
various products, i.e., the percentage of each product Less fixed expenses 270,000
included in total sales. Operating income P180,000

Margin of Safety – Indicates the amount by which actual Requirements:

or planned sales may be reduced without incurring a 1. If 1,500 more units are sold, how much increase in
loss. It is the excess of actual or planned sales volume profit is expected?
over break-even sales. This can be expressed in terms 2. If sales volume increases 15 percent compute the
of units or in pesos. Margin of safety is the percentage new profit.
of margin of safety to total actual or planned sales. 3. If the firm were able to increase its sales volume by
15 percent without a change in its selling price,
Factors Affecting Break-even Point variable costs, or fixed costs, would this change the
1. Selling price per unit
breakeven point?
2. Variable cost per unit
3. Fixed cost 4. If the firm were able to increase both its selling
4. Sales mix price and variable cost by 20 percent, would the
breakeven point in units or in pesos change?
Operating Leverage. A measure of the extent to which 5. Prepare comparative income statements at sales
fixed costs are being used in an organization. The level of 4,000 and 6,000 units.
greater the fixed costs in relation to variable cost, the
greater is the operating leverage available and the PROBLEM NO. 3.
greater is the sensitivity of net income to change in After its cost structure and potential market, Babes
sales. Company established what it considered to be a
reasonable selling price. The company expected to sell
Team PRTC © 2025. This content is protected and may not be shared, uploaded, or distributed.
Page 1 of 6 www.teamprtc.com.ph MS.3903 ONLINE
EXCEL PROFESSIONAL SERVICES, INC.

20,000 units per month and planned its monthly results The sales for the year were in the ratio of 3 Blujets to
as follows: 1 Blupen. Sales volume for the year was P1 million.
Sales P1,000,000 Fixed costs for the year amounted to P390,000.
Variable costs 600,000
Contribution margin 400,000 Requirements:
Fixed costs 180,000 1. Compute the number of units sold for each
Income before taxes 220,000 product.
Income taxes 88,000 2. Compute the breakeven sales in pesos and in
Net income P132,000 units.
3. Compute the composite breakeven for the
Requirements: company.
1. If the company determined that a particular 4. If the sales mix was to change to 2 units of
advertising campaign had a high probability of Blujets to 1 unit of Blupen, would this have any
increasing sales by 4,000 units, how much could it effect on the breakeven sales? If so, what would
pay for such a campaign without reducing its be the new breakeven sales?
planned profits? 5. Assuming that the sales volume would remain at
2. If the company wants a P240,000 before-tax profit, P1 million, what net income would be generated
how many units must it sell? using the sales mix in number (4) above?
3. It the company wants a 25% before-tax return on 6. What sales revenue would be required if the firm
sales, what level of sales, in pesos, does it need? wishes to generate a net income of P328,900 if
4. If the company wants a P150,000 after-tax profit, the original mix of 3:1 prevailed?
how many units must it sell?
5. If the company wants an after-tax return on sales PROBLEM NO. 6.
of 18%, how many units must it sell? Relax Company and Recline Company both make rocking
6. The company is considering offering its salespeople chairs. They have the same production capacity but
a 5% commission on sales. What would the total Relax is more automated than Recline. At an output of
sales, in pesos, have to be in order to implement 1,000 chairs per year, the two companies have the
the commission plan and still earn the planned following costs:
before-tax income of P220,000? Relax Recline
7. If the company wants its before tax profit higher Fixed costs P400,000 P200,000
than the planned amount by P60,000, compute the Variable costs at P100 100,000
required increase in peso sales. per chair
Variable costs at P300 300,000
PROBLEM NO. 4. per chair
Mercy Company has, for the coming year, budgeted Total cost P500,000 P500,000
sales of P2,000,000 with contribution margin of 60 Unit cost (1,000 units) P500 P500
percent and fixed costs of P700,000. The company’s
only one product line sells for P40. The company is Requirements:
subject to 30 percent tax bracket. Assuming that both companies sell chairs for P700 each
and that there are no other costs or expenses for the
Requirements: two firms, complete the following:
1. If the company determined that a particular 1. Which company will lose the least money if
advertising campaign had a high probability of production and sales fall to 500 chairs per year?
increasing sales by P150,000, how much could it 2. How much would each company lose at
pay for such a campaign without reducing its production and sales level of 500 chairs per
planned annual profits? year?
2. A plan includes an increase in advertising cost of 3. How much would each company make at
P120,000. What is the minimum increase in peso production and sales levels of 2,000 chairs per
sales to compensate for the increase in year?
advertising cost?
3. The operations manager believes that the variable PROBLEM NO. 7.
cost will increase to P18 per unit. The sales The following questions are independent of each other.
manager believes the selling price can be 1. Flame Company had a 25 percent margin of
increased. What is the new selling price that will safety. Its after-tax return on sales is 6 percent,
give the same contribution margin ratio of 60%? and tax rate of 40 percent. What is Flame’s
4. Assume that the amount of total fixed cost contribution margin ratio?
increases by 15%. What is the effect of this
increase on each of the following? 2. DEF Company earned P50,000 on sales of
a. Break-even sales volume P800,000. It earned P110,000 on sales of
b. Before-tax profit P1,000,000. Compute the total fixed costs.
c. Contribution margin
d. Required sales to earn same amount of profit 3. The Childers Company sells widgets. At an annual
sales volume of 75,000 units the company breaks
PROBLEM NO. 5. even. At an annual sales volume of 100,000 units
The Color Company manufactures and sells two the company reports a profit of P200,000. The
products. The selling prices and variable costs of the annual fixed costs for the Childers Company are
products are as follows: ______.
Blujets Blupens
Selling prices P20 P40 4. At present sales the company has a margin of
Variable costs 8 24 safety ratio of 30 percent. If the contribution
margin ratio is 40 percent, what is the return
percentage on sales?

Team PRTC © 2025. This content is protected and may not be shared, uploaded, or distributed.

Page 2 of 6 www.teamprtc.com.ph MS.3903 ONLINE

EXCEL PROFESSIONAL SERVICES, INC.

MULTIPLE CHOICE QUESTIONS 7. As projected net income increases the

a. degree of operating leverage declines
1. One of the first steps to take when using CVP b. margin of safety stays constant
analysis to help make decisions is: c. breakeven point goes down
a. finding out where the total costs line intersects d. contribution margin ratio goes up
with the total revenues line on a graph.
b. identifying which costs are variable and which 8. A managerial preference for a very low degree of
costs are fixed. operating leverage might indicate that
c. calculation of the degree of operating leverage a. an increase in sales volume is expected
for the company. b. a decrease in sales volume is expected
d. estimating how many products will have to be c. the firm is very unprofitable
sold to make a decent profit. d. the firm has very high fixed costs

2. Which of the following would decrease 9. LEVERAGE Company changed its cost structure by
contribution margin per unit the most? increasing fixed costs and decreasing its per -unit
a. A 15% decrease in selling price variable costs. The change
b. A 15% increase in variable expenses a. Increases risk and increases potential profit
c. A 15% increase in selling price b. Increases risk and decreases potential profit
d. A 15% decrease in variable expenses c. Decreases risk and decreases potential profit
d. Decreases risk and increases potential profit
3. A company’s breakeven point in peso sales may
be affected by equal percentage increases in both 10. The indifference point is the level of volume at
selling price and variable cost per unit (assume which a company
all other factors are equal within the relevant a. earns the same profit under different operating
range). The equal percentage changes in selling scheme
price and variable cost per unit will cause the b. earns no profit
breakeven point in peso sales to c. earns its target profit
a. Decrease by less than the percentage increase d. any of the above
in selling price.
b. Decrease by more than the percentage increase 11. If a company desires to increase its safety
in the selling price. margin, it should:
c. Increase by less than the percentage increase in a. increase fixed costs.
selling price. b. decrease the contribution margin.
d. Remain unchanged. c. decrease selling prices, assuming the price
change will have no effect on demand.
4. If a company’s variable costs are 70% of sales, d. stimulate sales volume.
which formula represents the computation of peso
sales that will yield a profit equal to 10% of the 12. Which of the following items is not an assumption
contribution margin when P equals sales in pesos of CVP analysis?
for the period and FC equals total fixed costs for a. Costs may be separated into separate fixed and
the period? variable components.
a. P = .2/FC b. Total revenues and total costs are linear in
b. P = FC/.2 relation to output units.
c. P = .27/FC c. Unit selling price, unit variable costs, and unit
d. P = FC/.27 fixed costs are known and remain constant.
d. Proportion of different products will remain
5. Cost-volume-profit (CVP) analysis is a key factor constant when multiple products are sold.
in many decisions, including choice of product
lines, pricing of products, marketing strategy, and 13. In a graph of cost-volume-profit analysis, the
utilization of productive facilities. A calculation a. total revenue line typically begins at a required
used in a CVP analysis is the breakeven point. minimum level.
Once the breakeven point has been reached, b. slope of the total cost line is dependent on the
operating income will increase by the variable cost per unit.
a. Gross margin per unit for each additional unit c. total cost line normally begins at zero.
sold. d. sales level at which total cost and total
b. Contribution margin per unit for each additional revenue lines intersect is also equal to fixed
unit sold. costs.
c. Fixed costs per unit for each additional unit sold.
d. Variable costs per unit for each additional unit 14. For every unit that a company produces and sells
sold. above the breakeven point, its profitability is
improved (ignoring taxes) by the unit's
6. The contribution margin ratio always increases a. gross margin.
when the b. selling price minus fixed cost per unit.
a. Variable costs as a percentage of net sales c. variable cost.
increase. d. contribution margin.
b. Variable costs as a percentage of net sales
decrease. 15. Which of the following statements is true?
c. Breakeven point increases. a. A shift in sales mix toward less profitable
d. Breakeven point decreases. products will cause the overall break-even point
to fall.

Team PRTC © 2025. This content is protected and may not be shared, uploaded, or distributed.

Page 3 of 6 www.teamprtc.com.ph MS.3903 ONLINE

EXCEL PROFESSIONAL SERVICES, INC.

b. One way to compute break-even point is to Variable manufacturing overhead 12

divide total sales by the cost margin ratio. Fixed manufacturing overhead 30
c. Once the break-even point has been reached, Shipping and handling 3
income before tax will increase by the unit Fixed selling and administrative 10
contribution margin for each additional unit sold. Total costs P90
d. As sales exceed the break-even point, a high During the next year, KB-96 sales are expected to
contribution margin ratio will result in lower be 10,000 units. All of the costs will remain the
profits than will a lower contribution margin same except for fixed manufacturing overhead,
ratio. which will increase by 20 percent and material,
which will increase by 10 percent. The selling
16. A retail company determines its selling price by price per unit for next year will be P160. Based on
marking up variable costs 60%. In addition, the these data, the contribution margin from KB-96
company uses frequent selling price markdowns for next year will be:
to stimulate sales. If the markdowns average a. P620,000 c. P750,000
10%, what is the company’s contribution margin b. P1,080,000 d. P1,100,000
ratio?
A. 27.5% C. 30.6% 23. Austin Manufacturing, which is subject to an
B. 37.5% D. 41.7% effective income tax rate of 40 percent, had the
following operating data for the accounting period
just ended.
17. Mayo Enterprises has fixed costs of P120,000. At
Selling price per unit P60
a sales volume of P400,000, return on sales is
Variable cost per unit 22
10%; at a P600,000 volume, return on sales is
Fixed-costs P504,000
20%. What is the break-even volume?
Management plans to improve the quality of its
a. P160,000 c. P300,000
sole product by:
b. P210,000 d. P350,000
• Replacing a component that costs P3.50 with
a higher grade unit that costs P5.50; and,
18. Cork Company breaks even at P300,000 sales and • Acquiring a P180,000 packing machine with a
earns P40,000 at P400,000 sales. Which of the 10-year useful life.
following is true? If the company desires to earn after-tax income
a. Fixed costs are P120,000. of P172,800 in the upcoming period, it must sell:
b. Profit at sales of P500,000 would be P50,000. a. 19,300 units d. 27,000 units
c. The selling price per unit is P4. b. 21,316 units e. 23,800 units
d. Contribution margin is 10% of sales. c. 22,500 units

19. Molder Company manufactures and sells three 24. A company with P280,000 of fixed costs has the
products: Good, Bad, and Ugly. Annual fixed following data:
costs are P3,315,000, and data about the three Product A Product B
products follow. Sales price per unit P5 P6
Good Bad Ugly Variable costs per unit P3 P5
Sales mix in units 30% 50% 20% Assume three units of A are sold for each unit of
Selling price P250 P350 P500 B sold. How much will sales be in pesos of
Variable cost 100 150 250 product B at the breakeven point?
What is the composite break-even volume? a. P200,000 c. P240,000
a. 17,000 c. 1,700 b. P600,000 d. P840,000
b. 2,139 d. 9,471
25. Product A accounts for 75% of a company’s total
20. Lemery Corporation had sales of P120,000 for the sales revenue and its variable costs ratio is 60%.
month of May. It has a margin of safety ratio of Product B accounts for 25% of total sales revenue
25 percent, and after-tax return on sales of 6 and its variable costs ratio is 85%. What is the
percent. The company assumes its sales constant breakeven point given fixed costs of P150,000?
every month. If the tax rate is 40 percent, how a. P375,000 c. P444,444
much is the annual fixed costs? b. P500,000 d. P545,455
a. P36,000 c. P432,000
b. P90,000 d. P360,000 26. An organization's sales revenue is expected to be
P72,600, a 10% increase over last year. For the
same period, total fixed costs of P22,000 are
21. Lopez Company had a net loss of P3.00 per unit
expected to be the same as last year. If the
when sales were 40,000 units. When sales were
number of units sold is expected to increase by
50,000 units, the company had a loss of P1.60
1,100, the additional revenue per unit will be
per unit. How much is the contribution margin per a. P4 c. P6
unit of the product? b. P20 d. P46
a. P1.40 c. P4.60
b. P4.00 d. P1.75 27. The Big & Sturdy Company manufactures an
22. Kator Co. is a manufacturer of industrial engine for carpet cleaners called the "Snooper."
components. One of their products that is used as Budgeted cost and revenue data for the
a subcomponent in auto manufacturing is KB-96. "Snooper" are given below, based on sales of
This product has the following financial structure 40,000 units.
per unit.
Selling Price P150
Direct materials P20
Direct labor 15

Team PRTC © 2025. This content is protected and may not be shared, uploaded, or distributed.

Page 4 of 6 www.teamprtc.com.ph MS.3903 ONLINE

EXCEL PROFESSIONAL SERVICES, INC.

Sales P1,600,000 budgeted at P200,000. Coleman’s after -tax profit

Less: Cost of goods sold 1,120,000 objective is P480,000; the company’s tax rate is 40
Gross margin P 480,000 percent.
Less: Operating expenses 100,000
Net income P 380,000 While Coleman’s sales usually rise during the second
Cost of goods sold consists of P800,000 of quarter, the May financial statements reported that
variable costs and P320,000 of fixed costs. sales were not meeting expectations. For the first five
Operating expenses consist of P40,000 of variable months of the year, only 350 units had been sold at
costs and P60,000 of fixed costs. What is the the established price, with variable costs as planned.
margin of safety ratio based on the sale of 40,000 It was clear the 2012 after -tax profit projection would
units? not be reached unless some actions were taken. The
a. 100.00% c. 60.00% company president assigned a management
b. 50.00% d. 150.00% committee to analyze the situation and develop
several alternative courses of action. The following
28. A manufacturer contemplates a change in mutually exclusive alternatives were presented to the
technology that would reduce fixed costs from president.
P800,000 to P700,000. However, the ratio of
variable costs to sales will increase from 68% to Alternative 1. Reduce the sales price by P80. The
80%. What will happen to breakeven level of sales organization forecasts that with the significantly
revenues? reduced sales price, 2,700 units can be sold during the
a. Decrease by P301,470.50. remainder of the year. Total fixed and variable unit
b. Decrease by P500,000. costs will stay as budgeted.
c. Decrease by P1,812,500.
d. Increase by P1,000,000 Alternative 2. Lower variable costs per unit by P50
through the use of less expensive raw materials and
29. Metaphor Company is considering discontinuing a slightly modified manufacturing techniques. The sales
certain product line if it does not have a margin price would also be reduced by P60, and sales of
of safety higher than 15%. The breakeven sales 2,200 units for the remainder of the year are forecast.
are P76,800, and the margin of safety is P13,200.
Based on this information, the controller has Alternative 3. Cut fixed costs by P20,000 and lower
recommended that Metaphor keep this product the sales price by 5 percent. Variable costs per unit
line. Did the controller make the appropriate will be unchanged. Sales of 2,000 units are expected
decision? for the remainder of the year.
a. No, because the margin of safety ratio of
17.2% is not better than 15%. 33. If no changes are made to the selling price or
b. Yes, because the margin of safety ratio of cost structure, what is the number of units that
17.2% is better than 15%. Coleman Company must sell in order to
c. No, because the margin of safety ratio of breakeven?
14.7% is not better than 15%. a. 400 units c. 500 units
d. Yes, because the margin of safety ratio of b. 450 units d. 550 units
14.7% is better than 15%.
34. If no changes are made to the selling price or
Use the following information for the next three questions. cost structure, what is the number of units that
Ipil-ipil Corp. would like to market a new product at a Coleman Company must sell in order to achieve
selling price of P15 per unit. Fixed costs for this its after-tax profit objective?
product are P1,000,000 for less than 500,000 units of a. 1,700 units c. 2,500 units
output and P1,500,000 for 500,000 or more units of b. 2,000 units d. 3,500 units
output. The contribution margin percentage is 20%.
35. How much would be the after -tax profit if
30. What is the minimum number of units of this Coleman Company reduce the sales price by P80
product to be sold to breakeven? in order to sell 2,700 units during the remainder
a. 333,333 c. 500,000 of the year?
b. 333,334 d. 416,667 a. P321,600 c. P804,000
b. P482,400 d. P398,400
31. How many units of this product must be sold to
earn a target operating income of P200,000? 36. How much after-tax profit would Coleman
a. 400,000 c. 483,334 Company earn if it implements Alternative 2,
b. 566,667 d. Cannot be determined lowering variable cost per unit by P50, sales price
to be reduced by P60 and selling 2,200 units for
32. How many units of this product must be sold to the remainder of the year?
earn a target operating income of P1 million? a. P319,200 c. P478,800
a. 666,667 c. 833,334 b. P394,800 d. P658,000
b. 750,000 d. Cannot be determined
37. How much would be the after-tax profit if the
Use the following information for the next five questions. amount of fixed cost is cut by P20,000 and lower
Coleman Company manufactures and sells adjustable the sales price by 5 percent, selling 2,000 units
canopies that attach to motor homes and trailers. The for the remaining 7 months?
market covers both new units as well as replacement a. P272,000 c. P403,000
canopies. Coleman developed its 2012 business plan b. P399,600 d. P408,000
based on the assumption that canopies would sell at a
price of P800 each. The variable cost of each canopy
is projected at P400, and the annual fixed costs are

Team PRTC © 2025. This content is protected and may not be shared, uploaded, or distributed.

Page 5 of 6 www.teamprtc.com.ph MS.3903 ONLINE

EXCEL PROFESSIONAL SERVICES, INC.

Use the following information for the next six questions. Use the following information for the next seven questions.
Candyman Company is a wholesale distributor of candy. Southern Ski Company recently expanded its
The company services grocery, convenience, and drug manufacturing capacity. The firm will now be to
stores in Metro Manila. produce up to 15,000 pairs of cross-city skis of either
the mountaineering model or the touring model. The
Small but steady growth in sales has been achieved by sales department assures management that it can sell
the company over the past few years while candy prices between 9,000 and 13,000 pairs (units) of either
have been increasing. The company is formulating its product this year. Because the models are very
plans for the coming fiscal year. Presented below are similar, Southern Ski will produce only one of the two
the data used to project the current year’s after-tax net models. The following data were compiled by the
income of P110,400. accounting department.
Touring Mountaineering
Manufacturers of candy have announced that they will Selling price per unit P132.00 P120.00
increase prices of their products an average of 15% in Variable cost per unit 79.20 79.20
the coming year due to increases in raw material (sugar, Fixed costs will total P554,400 if the touring model is
cocoa, peanuts, etc.) and labor costs. Candyman produced but will be only P475,200 if the
Company expects that all other costs will remain at the mountaineering model is produced. Southern Ski
same rates or levels as the current year. Candyman is Company is subject to a 40% income tax rate.
subject to 40 percent tax rate.
Average selling price P4.00 per box 44. If Southern Ski Company desires an after -tax net
Average variable costs income of P33,120, how many pairs of
Cost of candy P2.00 per box mountaineering model skis will the company have
Selling expenses 0.40 per box to sell?
Total P2.40 per box a. 12,459 c. 11,545
Annual fixed costs b. 13,000 d. 14,941
Selling P160,000
Administrative 280,000 45. How much total sales revenue at which Southern
Total P440,000 Ski Company would make the same profit or loss
Expected annual sales P1,560,000 regardless of the ski model if it decided to
volume (390,000 boxes) produce?
a. P880,000 c. P831,600
38. What is the breakeven point in units before a b. P1,320,000 d. P11,647
15% increase in prices?
a. 200,000 c. 175,000 46. How much would the variable cost per unit of the
b. 275,000 d. 100,000 mountaineering model have to change before it
had the same breakeven point in units as the
39. If fixed costs double, what happens to the touring model?
breakeven point? a. P2.97 c. P8.00
a. Increases but by less than a factor of two b. P4.46 d. P6.80
b. Decreases by less than a factor of two
c. Increases by a factor of two 47. If the variable cost per unit of mountaineering
d. Decreases by a factor of two skis decreases by 10%, and the total fixed cost of
mountaineering skis increases by 10%, what is
40. If the current contribution margin ratio is the new breakeven point in number of pairs?
maintained, what would be the selling price of the a. 9,900 c. 13,007
candy to cover the 15 percent increase in variable b. 10,729 d. 15,898
costs?
a. P4.00 c. P4.60 48. At what number of pairs would the production of
b. P4.15 d. P4.50 either mountaineering or touring model give
equal profit?
41. If candy costs increase 15 percent but the selling a. 6,600 c. 13,000
price remains at P4.00 per box, what will be the b. 10,500 d. 18,803
breakeven point in units?
a. 338,462 c. 285,715 49. If the Southern Ski Company sales department
b. 346,457 d. 305,556 could guarantee the annual sale of 12,000 skis of
either model, which model should Southern
42. If the candy costs remain constant but the selling produce and sell?
price increases 15 percent, what will be the a. Either mountaineering or touring model
breakeven point in peso sales? b. Mountaineering
a. P648,000 c. P920,000 c. Touring
b. P838,462 d. P1,556,953 d. Neither mountaineering nor touring

43. If net income after taxes is to remain the same 50. Suppose the management decided to produce
after the cost of candy increases but no increase both products. If the two models are sold in
in the sales price is made, how many boxes of equal proportions, and total fixed costs amount to
candy must Candyman sell? P514,800, what is the firm’s break -even point in
a. 480,000 c. 27,600 units?
b. 400,000 d. 29,300 a. 11,000 c. 10,500
b. 11,074 d. 11,647

“Some succeed because they are destined to, but most succeed because they are determined to.” - Anonymous
– end -

Team PRTC © 2025. This content is protected and may not be shared, uploaded, or distributed.

Page 6 of 6 www.teamprtc.com.ph MS.3903 ONLINE