25 if the selling price is p14 per unit the breakeven

25. If the selling price is P14 per unit, the breakeven point in units (rounded to the nearest hundred)
for surge protectors is:
a. 10,000 units b. 8,600 units c. 20,000 units d. 15,000 units
26. How many surge protectors (rounded to the nearest hundred) must Tribal sell at a selling price of
P14 per unit to gain P30,000 additional operating income before taxes?
27. How many surge protectors (rounded to the nearest hundred) must Tribal sell at a selling price of
P14 per unit to increase after tax income by P30,000? Tribal effective tax rate is 40%.
28. Anna Co. would like to market a new product at a selling price of P15 per unit. Fixed costs for this
product are P1,000,000 for less than 500,000 units of output and P1,500,000 for 500,000 or more
units of output. The contribution margin percentage is 20%. How many units of this product must
be sold to earn a target operating income of P1 million?
29. SPC & Company has sales of P400,000 with variable costs of P300,000 fixed costs of P 120,000.
By how much would SPC need to increase its sales in order to achieve a target operating income
of 10% of sales?
a. P462,000 b. P400,000 c. P800,000 d. P500,000
30. In using cost-volume-profit analysis to calculate an expected sales level expressed in units, which
of the following should be subtracted from fixed costs in the numerator?
Problem 1
We are given the following information for the B Corporation.
Sales (credit) P 7,200,000
Cash 300,000
Inventory 2,150,000
Current liabilities 1,400,000
Asset turnover 1.20 times
Current ratio 2.50 times
Debt-to-assets ratio 40%
Receivable turnover 8 times
Current assets are composed of cash, marketable securities, accounts receivable, and inventory.
Calculate the following balance sheet items.
a. Accounts receivable
b. Marketable securities
c. Fixed assets
d. Long-term debt
Problem 2
Effects of Financial Leverage
Several investors are in the process of organizing a new company. The investors believe that
P2,600,000 will be needed to finance the new company’s operation, and they are considering three
methods of raising this amount of money.
Method A: All P2,600,000 would be obtained through issue of common stock
Method B: P 1,300,000 would be obtained through issue of common stock and the other P1,300,000
would be obtained through issue of P100 par value, 12% preferred stock.
Method C: P 1,300,000 would be obtained through issue of common stock, and the other
1,300,000 would be obtained through issue of bonds carrying an interest rate of 12%.
P

The investors organizing the new company are confident that it can earn P520,000 each year before
interest and taxes. The tax rate will be 30%.
Required:
1. Assuming that the investors are correct in their earnings estimate, compute the net income
that would go to the common stockholders under each of the three financing methods listed
above.
2. Using the income data computed in (1) above, compute the return on common equity under
each of the three methods