CVP-BEP

Question 1

What is the costing method to use in CVP Profit planning?

Answer 1

Variable Costing

Question 2

In CVP Analysis, NET SALES is the base - 100%

Answer 2

True

Question 3

Contibution Margin = Fixed Costs

Answer 3

Yes

Question 4

CM could be computed in so many ways

Answer 4

CM:
= Sales-Variable Costs
=Fixed Costs+Profit
=Unit Sold×UCM
=Sales×CMR

Question 5

BEP (Units) =?

Answer 5

Total FC/UCM(per unit)

Question 6

BEP (pesos) =?
Yung makukuha, required sales yan para maka BEP

Answer 6

TFC/CMR

Question 7

In BEP Total Contribution Margin (CM) =?

Answer 7

Fixed Costs

Question 8

Magin of Safety =?

Answer 8

Budgeted Sales(BS)-Break Even Sales (BES)

Question 9

Margin of Safety (pesos) × CMRate=?

Answer 9

Profit

Question 10

The Challenge in CVP-BEP is the Sales Mix/Multi Product Sales.

CompositeBEP(units)=?
CBEP(pesos)=?

Answer 10

FC/AVERAGE CMperUnit
FC/AVERAGE CMR

Question 11

The Challenge in CVP-BEP is the Sales Mix/Multi Product Sales.

Explain how to compute Average UCM

Answer 11

You can get the AverageCMperUnit per product by:

Summation of(CMperUnit of product× Sales Mix Ratio in Units)=Average UCM

Whrein Sales Mix Ratio is the BUGETED SALES IN UNITS!
Example:
Product BS
X 5
Y 3
Z 2
So the ratio for X is 5/10 and so on.

Same aplication with Average CMR! Which BSpesos will should be used!

Question 12

The Challenge in CVP-BEP is the Sales Mix/Multi Product Sales.

You can also allocate the CompositeBEP per product. How?

Answer 12

Thru product Sales Mix Ratio. Remember how to get sales mix ratio? Budgeted sales in units!

Question 13

EBIT means

Answer 13

Earning Before Income Taxes

Question 14

Degree of Operating Leverage=?

Answer 14

Contibution Margin/EBIT

Question 15

Percentage Change in EBIT=?

Answer 15

Percentage Change in Sales × DOL

And you can also derive by

DOL=%change in EBIT/ %change in Sales