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

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83.The net cost per ounce of material isA. P2.00B. P1.60C. P1.70D. 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 thenormal production capacity is 100,000-unit level, what is breakeven point?
Questions 86 through 90are based on the Statement of Income of Davao, Inc. when representsthe operating results for the current fiscal year ending December 31, Davao had sales of 1,800tons of product during the current year. The manufacturing capacity of Davao's facilities is 3,000tons of product. Consider each question's situation separately.SalesP900,000Variable costsManufacturingP315,000Selling costs180,000Total variable costsP495,000Contribution marginP405,000Fixed costsManufacturingP 90,000Selling112,500Administration45,000Total fixed costsP247,500Net income before income taxesP157,500Income taxes (40%)(63,000Net income after income taxesP 94,50086.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 stayat the same levels and amounts next year, the after-tax income that Davao can expectfor the incoming year isA. P135,000
B. P283,500C. P110,250D. P184,50088.Davao has a potential foreign customer that has offered to buy 1,500 tons at P450 perton. 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 somebusinesses from regular customers so as not to exceed capacity?
89.Without prejudice to your answers to previous questions, and assume that Davao plansto market its product in a new territory. Davao estimates that an advertising andpromotion program costing P61,500 annually would need to be undertaken for the nexttwo or three years. In addition, a P25 per ton sales commission over and above thecurrent commission to the sales force in the new territory would be required. How manytons would have to be sold in the new territory to maintain Davao's current after-taxincome of L'94,500?

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