chapters CHAPTER 4 MARGINAL COSTING and COST-VOLUME PROFIT ANALYSIS ginal costing and CVP analysis » Academic Areas of Competence {QBasic principles of marginal costing: {Basic assumption within the relevant range {Understanding the ‘marginal income statement €Q_Retevant formulas in ‘marginal costing €QCVP sensitivity analysis 2 BEP graph and CVP graph The indifference point {Operating leverage ‘computation and arahsis nes Main ong Pas a © Basie pincples © Costs nd expenses are segregated into xed and vaabe elements = Prot Sas Costs and expenses ~ Fro = Se redone vob cot fn cost means cost and expenses) to ‘> Retiies and operations ae made win te elovat range (© Batic assumptions wii the relevant range "Leary" The behavior of sls and cost Set. = Setar tis oes andemeres. 12 Seles Ketangos docty in relaon oho ove of wnt sll (© Fed costs» Tot ued coats conwantwahout regard tothe change in the level of unts of production ad eae: unt ed cost changes (Ge, unit fied cost cocreases ace lve of production inceases, . land ver versa). 2 ‘arable cots ~ Total vata cose change incest propor with {eleva of unts produced and so; un vale Coat cela ‘Sing pic “assumes ta be constant WP imerion ~ dreparded, here eno WIP vento inventory no change nthe FG inventory ie. roducfon = sales) Prout) ad eas mx ee 12 theres ony ore product or 1 tere are 2 more products produced and sold, the sole mic ‘Seuimed tobe contr vane (© The magalincome stement or varie nome statement) = Thecontened oat = Treeponiedomat eer a me fata cote and epee. °F SNrtatecousctosotesct exec 7 ibameaeg arg 7 Poaceae satogcese Varsoanguas : joceetarcrereia Ek crautn dite “Breet tects antepanses afew somet a ° inane re cane a BE = Bramples of varale expenses are detvty expenses, slesmen's| ‘Smission, and packing supplies, ” Bo‘ Mu ing nd CVP amis 8 Segue din ole Ses ect a rr an ts tn iia Races sare ail ee Ee a ne crm ce serie oe ae CER cerennenrncinne Prodan ad ‘Soeavelume | _Unt sles price | eee a |v | me | cobdant | orton | pe | ne constant | constant | ne | ne | ne |e arb cots (OM = Fixed ost +1877 (GM = Quantity sold x UCM ‘CUR = 100%-VCRato CMR = CM Sales (aR = UCM /USP CMR = NPRIMSR CUR = QEBIT/ Sales (FC romans e sara) > uM? ‘ca = usP—uve cM = Fo /BEP (nts) + UG = CM Quay Sod 7 Pome? Prott = CM—Fied costs ‘Prot = Sales x MSRato x CMRatio Prot = Sales xNPRato APrft = ACM inEC ® ‘Prit = BOM nec e = BPs? 5 EP (uns) = Fciicaargin a fad vee = FCICMRatio. i arp. BE (uns) = Flaverage UCM Comp. BE pose) = Finverage CME BEP {it hcl eee (ERs) ea cues [ALBEP: Prof oes) =!0 Sales Toa costs Soitton margins Toa fed cots Vetere fagous st nrojras = Magn ot Sstey = 7 MS" “= Act sles — Acta teskeven sles MS = Budgeted sles Budgeted breakeven sales US_ = SaexnsRato : ‘i SR = MS¥ Actual (or Budgets) sles Wis = NPR/EMR, [1 = (@ESsies/ Actua Sales) ‘Unt prot margin? USP NPRato = MER CMR © Depree of operating leverage (OOL) OL cM EBIT (Dot £6 a inert 96 an Sales \ ainsi » sein See xDOL . ‘STRAIGHT PROBLEMS, . ase CP raatensips. Malan Company posuces a mercande tat rs the Iotowing da : tse pce 80 pac unt Catveterecons Pas ber ant Tol oad oss e400 per aru Untsaiscume me certyear 25000 unt Reuse * Sarre cement Etta sues wnegnaeeeye Fs {ease eee 7 TRESS SE PR ceateeeOLUTION GUBETHALYSIS SHEET wis, “eases” eLecagm — 10880% ‘Sales or os Be “ae aa cies, BBS SM Se " Eenmten map (P16 Mx 4%) Fundesas grates NPR = SR 3 CR = 40% 20% = 83 @ Prt = HS ¥ cu 1 nrasen CM reese rt) = eerease Ipsles x CUR Poo ooo ao% = Biz0.009 2. OVP senaiy nays, LAN Corporation manufocures and sels singe predict at baat pice of Pd: nt vote ena f Pad aft fied cae ot fii Regs wa bo urn econing ped (I = rere ee i “he MR BE in uns, and erzetd fT nn coin peri E Resmi sins se epria po x ting eto 1% Untvanticone Spree by 20%. 2: Tealineons eats 700 “4 Teneo onus sd zens 66,000. 4 il ees ron devas by Punt varie cost ceases by 10%, nd Sit on reas by P0000 2 SOLUTION GbE 2 owe Fee ums) = + Conieuson arp 25,00 site x _Lartsn erg (8,00 etx 20) ess0—Pr20)/PI80) = 200% Peooacorvag. |) 2 2208 er i in nk “ — Sa eer ae ae oe OTE vue [ea rg | IPT ree |r aie oi | -orascrnF ts] va Ld 3, Sales with profi. MIP Corporation presently seis product SIMPLE LANG Siete eldea cae "'Untcantrouten margn pao hs 2/05" Vara cet te im 100 res Yale cone 20.009 > ‘Resured Wat would be the ses inaeso8 adn uns {2 Incoto belo ncome tas P300,000 Income ater of 4% ie P300,000 Pref ata befor tax 20% of sales. 4 Untpret margin beter axis PE Pro te etre ani gh of CR |e sowmpneune 7 Sat cmmasre a ar Ekesyssen oe Agoteatens aaa 7 Pes OOTP py = Seen = Reta nn 900/ 3 ae eS ETE TTU Grortm |* Seeog res pursam com Tsim + a PROROT vaca st 20308) War a= FETTER cou eal. Tor | See» Sect Ue mo Seen 5 a FiChapeer 4 “Magia cestng and CVP analysis Ta ERTS]: TEST og id a er ae Cehipetae itera ibe obo rote ete, Snore est ieee , 2 stones reg pe phere Fecareaie nd : sige: unt contribution \ WAU {Segre 2 cee ree {Sree ear Se PRE amino” ious eye ame PNB) BMS Be = a ae) scapes ang rsync rca ‘Nees of Care BEP( i) Dszocouniex210 4c00unte Es200unrxaro —sdondunts Feoowuneesid — “sonounts Toa zagtb uns ind Wale WAUSP © Compost BE pes) = FC WACMR = Feogeo Fao stoes = P2.gan600 eto anensoey F< Ir Ave. UCM Paci P4G).00) 40 = gogo wns ‘5 Mast posi sale mix bnes on pet, Oareo Corpraon produces tee ‘rec Cran Pana, anarrg waheoa beone a ses paangco 503080 P00B600, Gio ‘oe wo ‘Faatiogcn, rao aon we P eerpeemaraenny 2 Seer atea eae Shs WACMR is dtrrirad based onto sles rit pesos which nti eaed la aan, nd 120 or Duran, Ponsa ana lron, especie Dusen = 50% x 409 = 10% Pons = oR x a9 = 2 ong = Soy 5 1029 1B ‘kc ie 1 Conon SEP (pose) = £0/W2EHR + 148 aon 57% = location of Composite BEP in pesos: Eismuict ‘aay © Beton "ea tg = Patan & 10 = 2ampeee econo © Mews ten te, PB mon (t ten (e, P2:ilon (1.0 409. "Conpoie sans (ens) = Fc 18m) Pico PS ln) 37%nen Me coisa Ps ° ©. Pooaty base CEVA. Chamsine Company pared he felon Operon ca forts 20s ans oe os pesos me cnange Sale paw — piaewo Fag SSE coieensecwnes ee oso fae Seer Hee cette sues ge eoeced reac 12.0000, at woud he expec a Mia and cous ad expenses se expecta nse by 20%, what wus ‘ane now treieven pare n2007 [6 SOLUTION GUIDE ay 3° VoRate = 2 Coss Sales = P4940 0006 52 Fredcosts» prazoncon a 04 2008 TealcoasandoxponsesPrgoonoce Fre seoon0 arable cons (Gus xe2%) “53000000 "00 7e0000 feccossandopenes Giga §— Fazonoon ‘EP (pescs)- FC CMR = 1420000 38% = Bar 38820 .Conttuson margin (P1226 x 385%) Seed cost and expenses or Bia New BP{pecos) = (P1426 120%) /62%= 227-4870 7. Opesing lewrage David Corperaondscloses the fofowng dala eae to ts rou Grsa ri 205 oprah ‘Conisaonaron (0 os0untexPSO) —-P2o20620 ‘ot ead casts rd exponves ‘z00000 Gina om eae 12 Degie ot parang verge. What would be the perceiageinease ln EBIT sais ae expats 0 hrgeaeby Ox nash © We rm wants ineroaso ts DOL 16409 207, how much shoul be te ‘noted crone in fae costs suring coibuton margin ona Sine v copes Main nig snd CVP aie @ 7 SOLUTION GUDE _ 1 "Degree cfopena uri = CM/ESIT = P2Mt/FeD0000 = 25 b. UaWEBT = 14m ales «DOL ROMER 24's 28 = hia Bl abel © EBT = Cw /00L = p2 mind = Now ae oat (2 ton" P500800) PH s20000 "Ousted 7 ooo ingeaa nod costs ene 8 Indterence pint ko Conzay has cates ones anew rea The "ow peda ean be martes oy ether hy auras proses a sm ‘Stored process Te marcas poses wt Po etn gant’ oe Fat Tented rascals be bo adr ao Vatatietioyovenses S00 kD Dect racinut tnt ety cya pected be 2600204 eat scence ssa ro Detain he aoa nt sales late et whch the che Between fhe to Panucng recast wood nl mala set OEP eae) (72380! +ps00 000) 40 P42) rz Mr P26 = 3208 wats EP (conbauonstas) = (12854 Pc 000) (4 P17 2 = Paves meat = eaaagents 7"?‘chert " = Seg aga wen Pesta = 206 - OREN ‘Profit (sem) = 20% « P1785! Romie RRS IN apo SE Sescap unis Listes ‘Goan grt ana tsar at over na reevat o9 waves stl 8 Vera fons we nzrires. 7G, = Sang prom mmunchnans, 1 Pesenusarererimar”” “0, Toans we ipcanges (os) a6 See ve Gs {a Roevarege ing soya vcr csi Socrates tae hte fwd te ‘Spreiote The bac seaotuns asd nage accu wn Pe 12 Cons borane saat sooo vrei indonar. 5. Une the bataver tata com al vant cal Cony an a seerclon ie wegticg Fanta n Don ctrg wl ton con cara tt me totam as poster sss ee Wea TE ea en on em nd mn ae See ionoesrerensoren Sictoara act noeprorsone : Eee 2 EESPSREY ete ow pn omit ¢ fermatenrercteny 8 ce ee ee Sn tm fete Stnbtran enc Seco ce grt ce in ance Sir Os coer ass wa fe Sore Sete retiree cae Senmsnowaeaces 2. Costar ani eames nator te ean range ta Avnovenies avian. Vala cose orem. Contlaounchoged” (DL Faden armors 4, Basic assure winn ha rnart age, { Chaceiare rea bens hearty of mma ae cats ae he ‘Sti seunpns it he CVP ara haere is meanest bests to it wou charge beni ole carga verte cots Che eset ea |. breskeen sas asures neat vere ovr rege with respect arene Toa a evens Teter Foes ae Mer ge gee raed Be < me 8 amcupert ana ing tC or i we emumptons oot he ralvent 2090. 5, Sot ney ee io capt oy sere ae Fare deren Tames a ee etaos norte {ESP G tetas pm ees an tl aos eae es roaton vin oy Unt Sei roe Total coms composed of fied ota nd varie el itis constant regardless of changes in the levels of | — ree et ei ee 4 ara ae Beem assent seecir tna ee neh ean we tnt te tnmarwtnite over args ‘Se Tee a Foamucten smasher aanat ove he lear (enn herbert rage he ttlonng er the essumplons cn coa-vokme et ‘alas and teakeven aaj the bahar sales ard cosas incr tal fed ‘it eon tun fied eats change, ttl variate costs change bt ‘abe cost cola, unt sls pico consarc tere iM canoe Ina {ised goods inlay (8, poducon equss sles) thre no work pons verry a ie sles rx cost ‘ine tear ange, variate costs ted cost oo naar and etl cats ‘charge Gusta he charge varie cons. (Cote ete" score 5. The amount of variable cost per unit and total fed cost within @rolovant range teva wey inrelaton a prodsten ave ‘A” Producten nears, un varie cost rcreases, tot sed cotinceates 5. Prosi dceaes, une vans cos decreases, fot fied coe oursoes. © Prckcion eases, unt varie cot remains conser oa fed cost ° (9) poe roduc nates, unt varabla eos decreases oa fad cost resin the fe (oa) © 2, Tha eine cf vata cost peut st pet nit ant fe coats wit the elvan 2. 1 Total ned cots tema conan tun be (loart ange, Howove, ct fed co oe change inthe level of pructn, the ttl fe SEIS. ST um wari wb conser win the flowers range. Cheese = SS v caperd © ajo nd CV? at oe 1 yr ta tsi wt ane per a on es ‘ies cpt VEU) noua cl erie ee ae, y ta VEL 8 Rebmeenemaveumemee (42 Och Sf 5. Forces naveuivecesm, Cy, yea 68 $ bang tie nso seing poauen rreases win alert anae these een css Porn) an oan co Pro 1a in ovrsang tl scot reine cna at ECU rans (has PO" Siamese" goccton ewan, and FU ietnse. ae prodton erate), zo wh revere range, a arabe cote anges ba VEU SSrwtanGhosmle ‘ate coven FEU cesses, VOU aoe nt canoe Grosetauar ecorect 1 Op lr arn iano eave ari at “A The conte pricy wi cmt eraoe. Ta coe recon acs ves wi ranges in ecoay. ©, Toulvaraie cow wl rene unchanged ove overt argo 15, Totti cost wi man unctrges over te rrr ange, (0) 4 Amar asurotn iting to relay of beakoven anys. {a Fhe troateven anne Dased an ts foowingeseumpone within te relevant roe tT babar of elas end conte sar win he eave range. ola fneg cost are carne btu fea cox changes, Teta varia cote range ba ws variate cet otaant (© Sale ecu preston fare isn chango into fished goods vero. 1 ThaelsnowencingrooseInerian, {Thesis mcrae constr Cholera e coect rer fo sesumetion ltr“), Choe iatr “ig Incaret because eiinsy ant proasiny have ro tet reitons wth tbe BEP ‘Saja chest i ate wee rt on soagion nh BEP Stal ntough he Salome ste, crac tater “cence Decale teat ‘arable costs chenge (nt wchanges) wahn he relevant cage ©. Atte beskaven in he contibuion margin ecu ota Ree A "Varad cons 1. Selng and esrinsratve cost 8 Sates reveruae Fined cone, (pa) 20 4) Tha amount of errbuon margin at breakeven point,coped Mana cnigandCVP arc © ‘ ten ec eign ti ra ‘nectar rena me ed ieee ae car neg wea ce eee 8. Albrastovango, es enti ays Vase coeuon margin. Mov than varia cost 8 eqwocsetuionnagh O. Mowtante comebuton aon (pay 2 Pasco attraseven port { Albeatoren part ol ed ot equal catbuton margin. Tis io beceun, ‘red cost ond cornbuon are ft sae amu, ere em tt rae ee 10. An assem lat czas eval and xed manuacturing veread ‘n'a sng cost boo. whch 's then apind fo vaneonpocmne cantg See ‘pleat ben The essay prt marapoment wast etmae tho mage oe ti tla marwacureg crarcad cous ore Yume Tove ge ‘Sppaion sty base ung e exole Suet formula, Heros en nese ‘sepeston ott base tat thn th elvan range of ety rie ase BaP une ene ofthe flowing relator Yegaring varie an ned sey ‘The wana cot por unt consent snd ol fod oss deren. The arabia canter unt constant andthe taal fd cows ret. Thevasate co per unt nae tl aed ents emain condor 8 Merete ot tons oan el ena rome pe 2, ito reaing vari are ont win he evr 1 vin he int ene, ut woe com and tal nod one corr ‘hocoleter'e wore ae ea) 11. Conan margin isthe exets of evans over 4 Greet eaat C'Costargeoasaa EM B. Merutsing com Alvaro cot, 1 pe) 2. Arocntro comping cotton margin. Nee Sr ane SSB aap ato te errs io rat oneal Se Staten gua ene i: Mice oeecnmegnnag Oh Me a Gras retary re owt ses eet Sseaee aan Sates pease ice bce eg en pas ae 2 Mann cxig nt CV tt ” pert martacsng coma, Choc“ is seo incoect Bocase te eeence Sevaen nl ae and co of goes sal pot ott 12 Costilume pot araye hy factor n mary dei roti Ines, png of reduc, maing egy ar ute Jong, nung coe of produces RSG Caryn een tra vo ooo, patente grate emaeaneye Penmeecacsaae 2 Seen ieee a 5, Sater unt ecn soatenal unt es g 23 +P Exettocpratra zane once he ester pothas ben each th Seyond be rettoven por ot see ee gtr on facets. Aso ‘Sehuim magn gener btn Tra maf enon ct ‘Sate prem Ate oaeren port come freascs by every peo haath ‘Shrbuton magn wren se ew cowbuten men Ghtetetor 8PM 18, Costaclane prof eltonips tat ae cainar may bo ara nes by censierg ol ~ Geos srmanesie cons Rolovant arsi cots. 8 Reloenfacd cass B, Arelorarenpee! valine, (ers) mo +P Tow act obe conned in artang cirvines retaken (a Chocmieter'e te coves Conanes’rasronsnips extort org rune fortum nove he eaonaipbteeon wovaraties ne gah incur Ths otter anges eoise know ot aovart range an he Sneaky Sesampton itive arma tA sues ner meaning Ot ses, val coe St fogcor oe crsare ‘Ghoonioterircrectecaue smart cots ae normaly euinese ‘nts rposotaon Chace 0 and'C ar moat becaso er rvart ‘hts af ao elses nt CV arty, "4 when an xara is opeeing above the breskavn pk the date or aut Ina tavratt may dose busrotcean wo neues te Rv fenauticnorae Magne salely Mamatrtectoum 0. Tape rr rate cf een we 4 Se amsett ona nat nn Fepuoios ae ens of esnips. Th anu cf scine thon tots es se erg ase Maenshcdy maron ta equats actuel (or budgeted) sles less breakeven sales, ie 7 (er)pers Main ong VP ma 2 15 rt or anu at sts ay docile sts or increas al: 1sTherat ts a we car 1° Sree rere F fnreecrmmmtnsseindaniion amore. | ar tu esse te over te booaven poet. Tero, | Miron! st reduonin sas ture ltes oe ed Chacha 1: Totus {| A" Rafe cstclume pot any 2 our ne cont ystem eo gone ten. i & menetinnargnal nares i 1. Nawdnator crm prodit contin. (os wc FP Renee tt stabs to ut cots h 1 Ghaeoteter ‘ei coract lal unt cose leven matin! anys Tote f ‘sovatnrargna ring amines ll cst shoud be aeprand fo ei fod vrai Tota unt coal as a lve i mall easing aye | {Goce tar sincaret Tota teat re Sopot of ha cost) aed ‘Sumnerste thor Chacoltar "ss reas fr unt cotta ' Giemning te eontouson marge, what ie mporrt to verabe ct Choe lone" eae Bratoven point 17 Grane towing netaons, what isthe breakeven sls lvl nuns? ‘Se sing pc porn A FO tol fed costs PN. Settee fs wire veer PT eee a ee te ion F Gonpttin ct esaven pre nut Er Ghoti "seal U canton magn equ unt sls pe (SP) isnt wate cn (UVC) Terre, beatae pr (EP) us on pose np oe ee [ts Fae cs / Unt eanebtin main erertsr We {8h (psc) = Pua cots / Corton margin ao eres ton ven In arial cigs, sale ao sve aq 100%. Vee coutato WGN aden taecon ne sie 1. Retdal ore ates. (pay ” 4 a caper Main ning ak WP art . actos by ous ene oe ss Aang beam) nani eer ten ee SORE iete costs cee oes Bigsasteaeasnents at tere Pieroni. F Seb Srcmancseoee rer 8 Sesion nec ; 1D, Remain unchanged (a Pe sls pc and ut 7 Bret to tase ait of eas! prtage eat not es FREE Ponape ieees ttn eae pc ad unt varie cost te ot Ong clon mara Teer, reskorn ot wi nt chara Pet gtaneracmar cnmart Chacoietar't covet Cvesions 19 ard 20 are based on the flowing slice budpted dla Russa (Sr company tte comra ys ‘etn re pert P3200 Boies es "sonata Faea enpoest 20000 arable to perant 20 18 Viste ne besoin ses nuit? s Ss000 ‘ooo & Siem 6, 3000 1 Secon les rs og ttl as cons oer rt contin marin, The etternebuima maga Pao ke, Pt2P8) Tere treater ais unt (eS, comps a lows fee tens) = Pisoo007Pe = azsaDunts 20. whatshersonctstey ao npc? 5 ie 5s se Pf est 8 fa HOB Se ary man sty ey ae orb) os ‘Senaasing be gon we Pave edasen 609000 pence G7sc0 nde Pra) "esa Nog es, t ‘Thao Se 25% fe, P150,000/ PSN 2. Acampary it canard abouts operating peermancs, os surmarize bow: "Revrune(P1220per nt) PoODe00 *Caged Margin cing snd CVP sbye i a vin a sense &s ET enn anor nemeey oe meena fee ce as - £2 sranitcsomaensn mae mbent 7 cmos OS ane wl tg 3 Rice seme tat ad wears AOS SES erases Pata Tews neon CRerecere tes cpm pean heath ane ee Lt anos ronan “Tie cee ca tare ce i ae sein rt eae i i eh a iudeceaotese munis sist troakeven “8.000 units iy rerenoe he need 1 brashoven 000 unis determines by | Sas ff eenasieestieiyi ane See = Sy eek % ee ween ted 2 min Atv evens evel weld Ket break oven? tee ee ns 2 Bretoven sn, Gh EP efrasosis cided yy CUR, Teal ed sate Pon c00 (e, P2ON0 005 258)" Tarai co o's 70K 805, + 20). Tettr, CMR 23% ‘ho treatevenportinpass EP gosn) = PSD96N0/ 0% = BLSEEEST 23, Forte peri tended Chand, generated he allowing eparang es pucontapes ag ones sn i = ‘om : = & oe i = ke ‘tse sroutes SP. at wht ls breaeeven eles? Paseo errnaiaes Prono Paseo eo (200) 2 Bre a mca nates Eee aman a pam at ieee ae crete pate Yah eisai Pes 124 Acompany pod 50 nts og out ans ned te flowy cats. Dre ‘recta, Fou dre! Goer PO god toad (2% toe). P5000. Ie ‘Sis vate of out ec, wats ne conranion erg pecatnge? ™ be (vera) me {a Conwtuton magn prtantage (CUR) the quot ofcontbaon margin nd et SE Siar ets one roton te Comox mar coud 8 Bocce 5000) Brecaoer ( s8800) Counc nas ® ‘TmecuR AT 8, PAE, C0OP 102000) Varaniecrehegypascnoxeox) | Seana). Easoao 25. Glen ne sting peo 7120 pet un; conrbon magn elt 25% ane es festa P2s0008 he eal vata exparee ste bon oven pont wed oe Paeno00 Ses 9 2 mam Seis =a a8 m Peametdritccomnntnanenin 225 700oats opin coins CVP nis ie eer ee Sa a a en, oi ae ty ‘irate HEP rzsocouzs) anno09 ‘Nena fo 208) sine aeons cme ‘rvaiateenpeaee(P250000/25%x78%) 750000 2. Veh ete fang forts i used 1 dtomie the break-even pint Ug Seeten earn ened? “en Reese opera nce equals varie costs plus aod oe Gnresrituscn arginies tne eat oven numba of unts ogi ed cot, Sang prea rsun aed oss mun conouton arp Tt ots om ilove os 29 © yo temuausedin staring he testaven poe (EP) i Chelona camec ABEP, ol ted cots eal fo conbuton ‘tov Gud outs sas untconrbuton margntnse the hte ef Ses oe {itch eerie mean ces raw loveres te asa fra canal ess end gat. Chace es renal beeae se es Sergeant can rot (ato ano oor) Cen ee 27. hich ft oowey weet inaang he bekeven port? RRsat na varie cont per 1 Asaenoin ne sumvarbl cot per nt Aneesesin ne canronzen marge ot 1, Aesasnicame xray, ea) ro 7 Tasco ato ie brosoven pont 1 EP ass casts over UCM To reste DEP, fed cost shoud inosse ard ‘sxibuten nag shoud gazease Chace ater Bb cect on nase A ‘Sein ot wold decease unit caosten mag, sr aie BEP- A ‘era pr user cls vari con he cx, Greta ade remeron rats enrgte ceed se Chacelet tsa SEF eas 28 Toran arent can & Decroas nh ans an teh mero, rave tone tan at adh cont elon ar, Deceased cons enna econo agin. rene fo coos rcdesease he contin mage, (SH) ae 17” Thetuctngin rousing ha eskven port (BE) A pert Map coig and OV bt onan ont i rr unt coritan arg (UCN, Tree, 12 1 rae BEF ted soe ft be cnrennd or UEM mun De reared Che (Sires corsah 29. Ici at xo In 2008 wera 18% blow ne 2005 lve NTO tons waud beret terns Deane tenant {¢ Imsezoin tomb darnse os perenne oft ls. ae 1. aceare ini, tree se apeorage ort 9308, ‘ rvverble B bape ctr een 2 Bagemastastmer erat th. mena morng Seeman e iin gamma erogeas erates Sa meteor eee en Susu nmantunteietesc cama est aos se cums pen ery ee sun peyopbaee oe ermase tas Ea such cin tiesaretcper stot Selec tenarmaae i Secgeeceas Fe eos pa unt each eral nt 8. i Screen, wo 2. Tre neeasincpratng nae oon he treskoven pot (BEP) i oachad a Choculter "bis carte ance he BEP ls ruchea te operatng ome wi Ferara by evry paro of ease nt ameaet of sntbton agin Tl ‘Stati eg © sual ort corti arg (U6M maid by es A BER, lad cot seul oa eouton margin, Fed core ‘Scape fo bo crsart even beyond the BEP. Three, afer te BEP, ‘Subuioymargn erases (av 10h crt ica te ramber of ants ‘Si witha cons so constr ary cea cannon margin 99 ‘neease net Cacti i ncarect because sale pice coy an inc in cove amysneet Cente fs roecSocnas ed opera Son et tec We ovat pot ofthe busesetavgh Rhos gout lad Pte ‘Stabtewrent of cet ut sale pe, Chae ers neater becaee ‘Stare pesos ae lab dus," PM #2 vsti sting ae 2, Mason Ena le ree mia: patl satin en Peel i ‘armen mom psa reac tts hela pale ck sr tea cng EVP ais Pa hp teowrg eves wl dtl deaoe the ts Ove reskven Bt fr hy Se anger corates machinery and EEG Ic 9. Rowena neaelstaleg pice 8 Aoteteancates sls ptraatve to ses ct epi ands Ae ects inperte rove cos o 2 2 SoD ae i ca nr eg 8 eee tee nos aca'oa oad att SEF ativonoucnegneteceaabar” = men {Gack Company sla ee crema; Spl Plex 74 Copies. Sioa met ‘eitate roc wnua Crp se lun conti, hehe ha cong rr {icant acme et rl er foe sean ent ee © A Soscn nolo eran 8 Msreasemoricpted sot of Sirplreaive tte els of Phtec and °. ‘nlnowaeo in Singol caw ati eo ze Tne se nati decease cera teskeven poe (EP) a Gonsoate roves) SEP enn to eed sorte ia Oy te veage UC Te “rose te compoate EP, the aed cots ust Gecrese ct ho serge Uo ‘mum incease ne comparyproauces an sols ce posuct, Spo eB ot ‘ie, Coin os pestate ond Pres let heme ‘Ghcecer'c icanen Saauee anon nteartopaad tls Segal ‘veto sas of Paes are Color woul ger erense Do avOm® Ucitis ty wou cece como E> . (Guiceletor = ncorectSocaue an rereate i overall wart for Pines, te ei ang mae oh sas racy, we ay age ‘been ea eg pes ad ayn scenes ee eget ‘nd wil nese Oe crest BEP. crc ot ao nce cae af irrase in Sng raw marie coe wold an @ cocrease = UCI ard ah erase nite connie SEP 53.4 conpary manuachees a snge proaict Estimated coat data repardeg # ‘roa and a omaion abe prose and ts compares te 25 /10¥e ‘Sates poe peut ‘Tot vtec ot pret Pat ‘Sls cermin (on sae) a Fred cows an opener 50720 Parse ‘Te abe ft tb emeary rust alin tb cara sedan , seyz00unte 8 steatosis 5 sraecounts ea) Year in orer to each ts Be F Soar ot nts rekon ia Tre ste commas Fa port P40) Teal uri vara cots P24 (Ga, bubs Py ana unt arta arg s 6 6, Pa P24 “fal fo couse POS 200 fe PES59 720 »PO.722480) Thera, he "BE (unt = P31 200/096 » $53.20 units 2% Foy Conga npr esa eg ya end Sreakovoneat Bicone Sgiedcuuicimern —‘aoobod ariow earonen ‘seo Pecetganys minty 5 Pans oa) # ow aac of angi of sy i Nigel iy Se nen st of ee ant eaovan acpi sae ec0.000 entren Feioono inant soy eesonon {25,The conreten arg ra anos increase when 1. Vara sos aoe poeoran fet sles soca. 7 ‘5 Viral cota prcrabe tre sas rrease (sia) 6° + Sw ont natant cnet ins (nate, i hn hn espe ncn co eee Seige ne Seas ay Sik eres * et reste Dota at he SEP sterig th CMR. Bais, huge nerscarl Gata we oungn nna CaN Chios ada , ei aig md CHP aie a ‘The ‘etourg iniesten puters 12. Nowe Compan/s creole peg, migons ce 5 Soe pean oe rr Freon owt coind oltre nce aes yw 3.01" sy pice io :3 bP e (sr) ae I F heormesin getty eet — FEDER nods te ey fe rt th oreskvan pit Beyond te ‘Booivergam re eresaes by every pons of rsoeea neat age ‘apt ete yb tear bw BEP Ite ut conn maga, “{'rsinen po conreuon mug equ ae cons. At canon iar tl dca ed besonen ws The cron Margo (att = Pigogo07 punt = Bisa ‘7, Teflon tarts oe volume prota of Toy Co: ‘Soskeenpartinuns 3.060 Wenteoreprunt p20 "la cou Prscoo Spiga ota cong eee ne 001 ute? 8 as 5 aire sea F esrmecetia mene 2 RRM Te aL Te pt toe oe Toney talent reat oh gtdmaceni are wameese ERS GSacneree a pater secu rata ts oman 38 Aya canpery ming sting pce by maring up vale cats 5% ‘in th crpay ins aunt sing ca mann sale sn ‘ehdew arog 10%, hat oe compar conven margins? ree Oa 2B hee bam eo) =e 7. Mhaconrbutenrayinrais 11 Te sos pric Bando vai cost hsm ete 100%, Vatitle cost at rE el slept ao ine 10% of artless _— i 106 chert Meinl cog snd CVP azat ‘mekdown._ The vale cost ra (VCR) and eantbuaten margin rato (CMR) ere sae 0 (160% x00H) = 60% ‘oa, Shit = Soom 805856 38 AF ie ance ncang pce 6 A ‘eke ocreaue hn varoble cost 8 Alsieferetevnvenacoda, 9, A eh gosreasein ted costs {5 Conatusen nar tn deen bate sles an varie ost, Cotton ‘Rar Gases bya aereaoe in slo pce, an rose val costo 8 ‘rctane ete cn eat vrata cost sare rou. Ser Sagrada garter ne oe an 9 1h crest es ce (owscoleam a) wou ceeace caiouin nargn mate an Pa oarease ‘isc 15 naan in veri sot(orone lone) Chacester a she Sr ein wou nae crtton mg wl che ar" ne ‘Question 40a 1 ee bare on no floing hin. Lan Pala Tropical Stu Sojemuetscree wnt soe dle The acu rorraon ate oe open e120 5 Boas (vera) Untsne pc Pumas! 15200) 4 jlstesteanmagnsrater isso) "age ‘vn us be margin tf Ftcertags or he at gate Lan? (ourde ron c 2% | SR ' Z ee aoped Maj ing CWP aie ‘3 yg sty veel. Ft IU 0 he ey arin oe Paes 1oare sonsigs7exrazs) Peaaa7s Means 10 cee 88 vari of oe af sty rie 20% (i, PIG A087 | 2.24379). Atamaty, The oo RI Sete srg it ua ons ve 204 6, sesnesr, “errata congay ta ar we se cancer bee eee Seam asie Vata seat, © Sales vue varios. Bre teste 5. Marpealicam rae re08 ae $2. ancnt ol coreasein abe ele losses oot 7, Peaster alow he boson pot (OEP) A BEP, hr i ai tof cncine mace bore soe coar @ Pe Tete cecal (or butgeed) ses arc the beseven sae, TM ee oe cy (Suan wker We cafes) Anyang no ee era eles neve of BEP.Hsugaes ferovone, margin toot RII NES S Soe a caenparing cotibuton mag ard vet Pein Bott stergntStey» CM). ‘Shogsiter3 rang verb coats oe sales Cocoon" ‘Gite arco treo hort oct on pret of hed imtartes Shove ater is meorot because maga Sicdelon ha: water to to rdaonp of mown Grourteraretasone ste 6. lsan G6, ne, menace and sls oy ings embonsed wih He Exsscpons Last yar te Yoy tgs sold fo F70 ech, and Iw ara 9 ‘Runsscare he a P2250 pasa. The company reece to ol 290 0) ‘gro reat ovan Tenet rear ost year was PEO400, Te CoTBmY Oo (pStoewng to cong year 1 Tye etg pea arn oy fogs wil be PED ‘Vora naruto cose pc unt izes by oot ‘ronsonetacraewtvonan Fert campy tbrescoven th coming ya aan ena 2600 5, 38280 company shassst oe) , ar comers Main cing VP as 20 $F Trotreskaven pein te cara yee. {brennan pre tons cone enc wtcorwbuson marge. Usng eee ‘Sorarsju na son artes slows ete Te BB eee, Be pa ‘etn ir ETE weet pot becoming ya shall bo 19:280 nts (PY, 155000, «44 Acongany hes evans of 500,09, ics F300, 0, wn etapa ‘PH, BW tw any eres to ses pce pr wnt by TO, round eadusy atm aed tei sxtper ent nares Wal nob the re! Bresevengertmpescs? xen ¢ pro000 7 Proom 5 paso oy 3 Foe rew rasan geen poe i tenure em enagae nth ara of he beerter ans ube used fe etre ar as pliméco soo Pseq000% 110%) ace "suag "Sng (eo) rewonnaron 200000 ot Ey (w2sa001 7550000) Frecaets saom p agizo’ (Peoono0%) Now BP ase Baming (pace rasase) “45. ee Capresonh a centitton marge of 0.26 ais ia hve ant ncom WPaShdomim esses une Pa mlign fatal aed cous aout a paso "vaso z77 8 peso 5. psao00 7 Mesmttegecas, Fed cont ara expanses may be deamined by geting heros EStpuie natpnanaiaane teens tay a alone mi (0) Scebdatnags Baan Sn rented oceres 3B sin afc sea cong bk ch os,Z agi cog ad VP ays Co eicea doses aa est cept ttc — an Paa8 tae “t Vai cvotmed ie "a! Ea is wooded crib mag peru on he ew ere? a orbs B Paso D.Poss (00 $e apace nt cottuten magnon te row oer 1G Tham ae wo unt connor magn here. Onw fare 10% capcty an the car inthe bt sanyo 10% capacy 5% capac sian” Sabor uncovessensaron “80” Peze “irene 7 7a imeombocnmon = Daa ‘Tre inial UOM sabe mated by the production mic of 1% en fr raglan eaucon ane uber respctvey The average wt conten IRage may row colwrined se Ragu ale (PO.7Os 11) SiBonaa (Pa x 55) ‘repent conrbuen mage ‘casa 2 10% iran overlayer For tha compar omnes prsrarere by PIE camng yer, fe cntton na so Ro & 0% 40% 8 oe 5 tom (ona) 2, The cznrbun margin rato wo inaseepeaing incone by P15 00 12 The ew corouen mari rato is eatamined by avrg De De argh wih row aaa Ter orion arin ened a IEW Ssiatyar(ssooaion) Ps00000 Cureton ‘8 Cateye Tepo00 Aes rewncowmenmecn 1358 g Dirdoby sis te 555000 Chat eat Eo ° 2 ad ng sot CV as wo “© pare rand ta i Sve cto se cat yeas ee oncchan ar eae tre enter Sie eee cath ae ance Se a ee ae 5 et et 20 + roast BEP at acrangin nt sas pce (USP) an id coe (FC), { Aninsnane n Uh reas on conan margin (UCM) nd decreases BEP, ‘tne an zene m6 taees GoTo wt vrai cot eran content (iltwross ro enact vate cst ala ghentopocuay arms ne gate tact ha gen change n USP and FC SEP. The lc carol bo celined fomibe metuton get tecnura he amour of unk vrata cot a acs 0 {hangentbe Bee Tousen ove a obonng Sey cunt verte conto P07 Orgel Date Now Dea ‘Cupert (sis) aot eee ee an Fodoas Pagomo —Baapoon a” Ee Be Ua amcaate pss en acces titre ae eee ea eae = i = Eis Be EP Ea “48. Two companies praaice and sa he sue poset in 8 compel nu, Tus, ‘Dosing peat promo soc conpany she sana -Conpany has ‘Snucen maryn rsa 40 a fans conte 25 men Corp? ere aaa ala we fs cots so Msher en nase o Conoany * Conary > ‘Stones a cnovion mang oso ta 30% grate tn at Company by imparacn, Canary { wil hae th Eroakoven porn tome of pest ‘Steere an i nave te “st B> pos pot oer enc tra rence Surg ipeeseie Younes ecaoses ey tints usta ust. A Uower Laser Hae Lesser toe Gente 5. Higher Gresar ry was ¥ Soneuig edeeay 16 Corpsny 2. hr BEP and eect cpr rot Serenata Ber 1 Conary" Rs Neher CR aioe fad cost wich yo lowae BEP enpard ate Company Shar he SEP, the Senpary hay hghe CMR lePeery erg te coer hor oft. Prt = Magnet Sf x CMR. Sieg (SN tr pt fg, OX) on Pate Company 4 (eg Soy od : Conan rations str aero EP. ee wn eo Se arrears to eetle xpi ut ales, wich of Ile Sucbedomoata red cot rife numero? om (Cemed epson. G. Untconbuten magn 8 BSceseringircone, 0, Vora cout mes east testa ent nO as by Becta eaves he reseed prota aes Sct fon ta eres none cneng sale wi ea Chocelte-Wra eee Sinus Stina re aad ro fd coven narra "Seaf’pot Ghote" tn heaves because un eonbuisn nel [Suc ceownra nha cnousion ot alos mua. Sheeler Sd ‘ied becur vrai coats rtreoa fae et 5. pep Company woul ike to rake ¢ raw produc ta seng price of P15 per unt aa coer rat re P0000 fle han SE0,000 us of ued nd sane £00.00 a mre unt of ouput To eorton margin ptearane [5.20% How rary us fs podt must bo Sold o eam ae pe BS income of Pt mer? eo ©. s25800 8 ain 5 resaeo tren oe 4 Prenton nina of tin 1G Teta tas ned eo gron lon tsa ba S000 ut of prctin EEPIS men a 00008 lyre Tha UM a PaGD (10x) Te ‘Sry ess aed st 5200 ne, ropa neon seb PO. Bere rr Re oon ose es cnn Pn ‘i puma neon 180060 teeter eal tk sek mata 200000 unis an the faed costo be cao sl be P1500 00 Th sas ust pie wot ot Babson ies odt prt P0000 fe E3804 ure coped Ses = Foster uo = (er.sn00 Poap00m 19 = gaa ws 52 Merman sa Pei tr F200 Ten ati co PO ioc Pa nontgCsae PLOR ire ed arg ee snare coe al Rap sar iSeigdbh apts at nears cPSS SOW” Gee one oe 5 a Reae Sstaaoueae mo 20 ‘ ‘ cies | eal ign HF 1 tug ede te atric tone p12020 cuatnel 2 ROS mentee tb in ronon te uote Paks) The ud ot tad oa ond memset is: ‘oben seth, Ans wi P7000, #4z8,200! 70%). Tere serra ip ianpo ors peereatant Stes fpr atnoa sro P40 = siacD ents ois cape i ct PT wens epe eee CO mah og ta Be as sr ees cgi tatimore Pasi SE oo $s eneut tinea nein coe eae pot of 10% of sales. he povateie smart P0000 te Vo 78% (i, P2G0.000P400,000, Terence to Gus 2G the prot rato gre, the computation tees win et sal adr on Bes Sere Sa tts et PU 5 oponmowa ht pace ‘Sites crown se Lnense frp ate sefing pce per unt [etree cores snot aarp att natn en ote rasnsaty ‘Stoner PSDO0D bine ees nomas fo ta ea, he sales Vane ‘sno skven woud goup PoTsc00,Saredontnee pct, H.yhaie prelie ict Lain Manag? a C 45% 2 on bese 0) sea 2 tow pretnme to fa Thebputtrolne tea te sare a8 he contbuan margin rio. And CMR ie ‘orton margin ised by sss Noe tat sles Quen inthe uesien eat ‘Sateen part Tae moors ut at eae sue tare eno gto oss Sed tne ‘Songs pti a ane, Therefore ay change nt faod coat alto the urge ‘Reannnuion ara Tne Cite 63 «deemed at flan “Gh = AFC A ate (the alsa at EP) ‘rersor(parsoasPrsoou0) = Sat 5. it node bee a fd ont of Laguna Maran ator th eas of pan 250 ezt8a760 reszate 5p sonec0 (098cert Mandigo fi “atic pu bidet Geto sicin 90%, oslo ots etree 0 Soar re Ok rem et ee ete aay eatsaseccuasonen eee Parca ea 380 es oy & Pence rt Rd Fw aroun otreresa infant {evans conrousan margin wee ease oeting incor nea nod Sa Ti en rex, P50 ode Ut PaO = Fai) tha poremaren eg. opringicane) #108 aon The inersea nego Pen, cleus a lowe Ipowese nC (6.00 uns P20). Prsom0 ‘feteee neprtng\ncono 20000 unix 10% x5) 2.009 insane nut cont eam 157. Biray Corpany pling is averting canpsin fr 206 and has prepares ne ‘Berg utp da taeda re star ngereee Total pi capt ‘obser Sac ‘5,000 pebettfammscatan at me mor a eras Sieawooo eel 8 Pisa tas 4 Ue ene re a 23 ne Basaran De 25 Ircomatafere inane tax 20n000 P, 200.000 (wimion «Pra en) Ccerouionraran ‘Bone Zito ‘sls 2008 anon toitgmeca eH ie Ee (seston — ‘uesior 8 and bad on towing rman A wise ioarg reste Sosqucsts yore a at sm E00 fr 205. Th PSY rpg arn tgu Sor tcher scams lows dae cee rraainon Patouos Tota thao ‘Sesto & od o soa opin cs: e rx0 : ‘enmarane genes Pugon00 6. wheel iting corpany wants 0 eam he same eforeax opraiog (Sate an ecoees te 2005 the ena! fvenues would rat be the frond Ps miler ba wou hae 1 i: ea 7 2 a 8 x 8 1F Prjes ets in 2008, Ba FOSSISSSLD Tao et fe, 20% + 8% + 00) and CUR ie utomacay rr zo0 P20) 800), iba cone it "See ones) = (FC +18 CMR = e740 Poway 56% = esas0.000pert Maina CV? as ™ 7 Ung the erga milon pect. e whotsl t.ang compen agin taney ies ereveranoe its woul Pela Pama Piem 5 prseoooo = ha Magn tet tpt sles as teshaven sls carted slows: 2000 operating verso [SEB covers oorateray, righ vraged company, a ee gh aes ats rig vr cows ha us Sma urges oes va esa Boron change ain Gage cargos ratio, . Nemo chonge nt nose, B. NStraroc met ome, (rp F Bret na dee Seong vag hw ae ea cares nae 1 Konpary with » nih dere of oersing lverane woul so rab © Noh ‘agora change m ERI cumnge are nos ovr rl Sue et Sos" rekon erossain tr "ain EBIT = 74 m Net Ses x Date of Opraing Leverage choice‘ rere barat to parcenige charg mnt near nat ny tee by ne degree pening nage ef ha proeage cho ‘at gle Taree, a change sles vom oot rl awl a opera hrgfin at name. Crocs ates "sand te aio meanest betaine me fcoige dhurge mnt incomes arecy eeand oy he dare of Sering 98 The pucanage cange in aaring ele inert and tes artoated wih 2 gocbtage change nierucs ae caaoect F"Spwaigicvonoe reste vea58 8 Prana ewenpe 5 Gontndieneags con f heonio geenenrin mrenenomen mines 8 Re eiaewacen tome anger SPS RE ee TSE ony ay emer ns oe nee So Ls SUL ENE ae ain as coer aid ig nd CV? as “ata 004 = ea E877 Bt = Penton Re chargeln EBiT xPercertage change 08 (rates Soper vat slog of aon decks of ing ‘Worfes sonpanes ac expected © have ar nde yn Eee rau pasa Elom, "Sonpary company 2 any Comea seing pnp do, rooe oe eee a oe i Labor par deck my 1B / eer peont Bo atte wae positon restivo ovenoee sna wet ia ae e meer eee SES = EY Sees. eer * Sree? haa a The ae tor ascr copay svat te: “Senpany + Campary2 est Frade “e300 Gurrisrsepsy 100 _249 @aderssePias+eaH Unt eretatsn magn ia —ie BEPinuntereowsers20) eakoo ELGQ @2s2e00~ Pen) ‘he inrence pat where te resus rps between th atmatvoe woul tetas. he pois of emo companies oe oxpessed TION ye seta runou nS) oe aars Pesos ance: Py = prt oo. PLS agoc=Pas2 900 Pirprenterco? Ainanerence port = Bp : awe abel aeo, coo = eae P2s2.000 ve = Lietao9 unite rcetmcie te {OFHGS he mardacves contr nls that an investment of P7500 in woe ne topase «Sok ru oo ein ns ue passe eae ee nts Poaton pur on sostonsPY0000 tr selon “aor cence ‘Pei, bi oman PLSD per tires Foe Sree © pessias 8 piseo0o 5 Pa aet iid gt ie » aN 2 Th sting pce pertale Ba USI titra i ed en ot dt ng bear taal are oat P50 0072.00) Snepretmem( 72000"595) (2000s) 2167 nts ie Pate 12.Using bsapton cosig, th detention fn besave pot pando ‘fofetowng een (Choceleter "a, baited love of frosucon, the bai io compaing tt ‘ued cons a ul verse cost, ond relearn dering eee oh. hotest" he noe tut a ele import ein nrnauon margins th BEP. Chis abr“, the lvl fued malesu ‘verte, etic felvatin dtaring te BE ‘ato Gar Conpany sete $0000 ures of “et 8 tp-tie-ne oan sina ‘These ware then fo he Sonpany ers + "pesos eile P1250, Daye of aun ottancing 16 cay, Contuzon mergin ta so 1 Pret te parad was Pas 000, ‘pw enna rcivacins place i he average bance cing a yer. Assume @ {88-ay ya Asls ee on et elem ne compsnysBecheehfvenn, ante ae cpzczseos B Pros 5 acono00 100 P brosaven evens 1 Breatoren revere cr toaavun pogo sles is eal to fond cot ver CHRD ‘Toe fond cont tk ven boo bo seterined by going ts iron t {rinbiaon marge nd pret ttre ef sou o ewbuson marge Sassy hats Yc svn ute evar st oh te be conpuled unig te Yocan tanone ars Ne saer oa ere ‘aout coat Elaoe testo raccoon Tea Aik ee eal to 260 ays yar avin by Be clacton pia, The procedure ast 2 Rots AcuuisReohiable 3a.c00 Sfnecahsi Tarot (200 dye dys) — 24 Seca Turon do os) 2A xeureto ait ‘entation margin Tero Coo re ass. Few owe ramos 1b. BEP pesos) = Proszow/aey = 208204 ‘Stoner tna weiaven pnts od a the van of vase epancas end fenet Ee sles oaed the teakoven pol low conmibaion margin ‘Stage nels sak name an wou high exnBuion MGA co fEet sence rng nn tong to tn face | "azo | Te SF TTS Fate Fake Fate oe) soe. dau ne sora tun fa ee { Salomon tis ve tour sum of varibie axpenss ond nad expenses {Eat ocenes, aa pth reieen por Samet 26 cored hace, 8 et catatonia wold res ager re (rey [2's boner sane” Sune 3h amy te tncaute fund cont on ‘Sense ae constr be pared eats (adore deduced om fevenes) {Zeer vatate ening sue Honca, chon eter" tocartoc one, © done ©