Question: Problem 1. Basic Illustration Corp. produces and sells a single product. The selling price is P25 and the variable costs is P15 per unit.

Problem 1. Basic Illustration Corp. produces and sells a single product. The

Problem 1. Basic Illustration Corp. produces and sells a single product. The selling price is P25 and the variable costs is P15 per unit. The corporation's fixed costs is 100,000 per month. Average monthly sales is 11,000 units Required: 1. Contribution margin per unit and ratio. 2. Break-even point in units and pesos. 3. If the corporation desires to earn profit of 20,000, it must generate sales of 4. Number must be sold to earn profit of P2 per unit. 5. The degree of operating leverage at average monthly sales of 11,000 units. Problem 2. Following information pertains to X Company's two products Required: Digicam Videocam Break-even point- units Selling Price Variable Costs 360 240 4,500 14,250 2,250 5,000 1. What is the weighted-average contribution margin? 2. How much is the total fixed costs? 3. How many units of each product should be sold if the company desires to earn profit of 1,515,000?

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