Blake Company has a 25% margin of safety ratio. Its after-tax-return on sales is 6%, and...
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Blake Company has a 25% margin of safety ratio. Its after-tax-return on sales is 6%, and its tax rate is 40%. Required: a. Determine the company's contribution margin percentage. b. Assuming the current sales are P120,000, determine the total fixed costs. 2. A company had a loss of P3 per unit when sales were P40,000 units. When sales were P50,000 units, it had a loss of P1.60 per unit. Required: a. Determine the contribution margin per unit. b. Determine fixed costs. c. Determine the break even point in units and in pesos. d. What sales should it earn to make a before-tax profit of 20%? 3. After reviewing its cost structure (variable costs of P7.50 per unit and monthly fixed costs of P60,000) and potential market, F Company established what it considered to be a reasonable selling price. The company expected to sell 50,000 units per month and planned its monthly results as follows: Sales...... Variable costs.. Contribution margin. Fixed costs Income before taxes Income tax (40%). Net income..... P500,000 ..375,000 .125,000 .60,000 ********* 65,000 .26,000 .P.39,000 ‒‒‒‒‒‒‒‒ Using the above information, compute the following: a. What selling price did the company establish? b. What is the contribution margin per unit? c. What is the break even point in units? d. If the company wants a P60,000 before tax profit, how many units must it sell? e. If the company wants a 10% before tax return on sales, what level of sales in pesos does it need? f. If the company wants a P45,000 after tax profit, how many units must it sell? g. If the company wants a before tax return on sales of 16% on its expected sales volume of 50,000 units, what price must it charge? Blake Company has a 25% margin of safety ratio. Its after-tax-return on sales is 6%, and its tax rate is 40%. Required: a. Determine the company's contribution margin percentage. b. Assuming the current sales are P120,000, determine the total fixed costs. 2. A company had a loss of P3 per unit when sales were P40,000 units. When sales were P50,000 units, it had a loss of P1.60 per unit. Required: a. Determine the contribution margin per unit. b. Determine fixed costs. c. Determine the break even point in units and in pesos. d. What sales should it earn to make a before-tax profit of 20%? 3. After reviewing its cost structure (variable costs of P7.50 per unit and monthly fixed costs of P60,000) and potential market, F Company established what it considered to be a reasonable selling price. The company expected to sell 50,000 units per month and planned its monthly results as follows: Sales...... Variable costs.. Contribution margin. Fixed costs Income before taxes Income tax (40%). Net income..... P500,000 ..375,000 .125,000 .60,000 ********* 65,000 .26,000 .P.39,000 ‒‒‒‒‒‒‒‒ Using the above information, compute the following: a. What selling price did the company establish? b. What is the contribution margin per unit? c. What is the break even point in units? d. If the company wants a P60,000 before tax profit, how many units must it sell? e. If the company wants a 10% before tax return on sales, what level of sales in pesos does it need? f. If the company wants a P45,000 after tax profit, how many units must it sell? g. If the company wants a before tax return on sales of 16% on its expected sales volume of 50,000 units, what price must it charge?
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QUESTION 1 a Contribution Margin Percentage Net Profit Sales x 100 Contribution Margin Percentage 36 100 x 100 Contribution Margin Percentage 36 b Bre... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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