The net cost per ounce of material is a p200 b p160 c

83. The net cost per ounce of material is
A. P2.00
B. P1.60
C. P1.70
D. P1.80

84. The total variable costs per unit for the large and small discs, respectively, are
85. If the material costs for large and small discs are P8.50 and P5.10, respectively, and the
normal production capacity is 100,000-unit level, what is breakeven point?
Questions 86 through 90 are based on the Statement of Income of Davao, Inc. when represents
the operating results for the current fiscal year ending December 31, Davao had sales of 1,800
tons of product during the current year. The manufacturing capacity of Davao's facilities is 3,000
tons of product. Consider each question's situation separately.
Sales P900,000
Variable costs
Manufacturing P315,000
Selling costs 180,000
Total variable costs P495,000
Contribution margin P405,000
Fixed costs
Manufacturing P 90,000
Selling 112,500
Administration 45,000
Total fixed costs P247,500
Net income before income taxes P157,500
Income taxes (40%) (63,000
Net income after income taxes P 94,500
86. The breakeven volume in tons of product for the year is
)
87. If the sales volume is estimated to be 2,100 tons next year, and the prices and costs stay
at the same levels and amounts next year, the after-tax income that Davao can expect
for the incoming year is
A. P135,000

B. P283,500
C. P110,250
D. P184,500
88. Davao has a potential foreign customer that has offered to buy 1,500 tons at P450 per
ton. Assume that all of Davao's costs would be at the same levels and rates as last year.
What net income after taxes would Davao make if it takes this' order and rejects some
businesses from regular customers so as not to exceed capacity?
89. Without prejudice to your answers to previous questions, and assume that Davao plans
to market its product in a new territory. Davao estimates that an advertising and
promotion program costing P61,500 annually would need to be undertaken for the next
two or three years. In addition, a P25 per ton sales commission over and above the
current commission to the sales force in the new territory would be required. How many
tons would have to be sold in the new territory to maintain Davao's current after-tax
income of L'94,500?