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Rose Corp

The document presents a case study for Rose Corporation detailing its sales volume, costs, and profit at various levels. It includes 7 requirements calculating the break-even point, units and sales needed to achieve different profit targets, and the sales price required to meet earnings goals based on expected sales volume and desired returns. The calculations show the relationships between units, sales, costs, profits, and prices under different scenarios.

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Timberly Mangayayam
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© © All Rights Reserved
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97 views6 pages

Rose Corp

The document presents a case study for Rose Corporation detailing its sales volume, costs, and profit at various levels. It includes 7 requirements calculating the break-even point, units and sales needed to achieve different profit targets, and the sales price required to meet earnings goals based on expected sales volume and desired returns. The calculations show the relationships between units, sales, costs, profits, and prices under different scenarios.

Uploaded by

Timberly Mangayayam
Copyright
© © All Rights Reserved
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
Download as xlsx, pdf, or txt
Download as xlsx, pdf, or txt
You are on page 1/ 6

STRAIGHT PROBLEM NO.

ROSE CORPORATION

Sales Volume - 20,000 UNITS

UNITS PESOS RATIO


Sale 15 300,000 100%
Variable Cost 9 180,000 60%
Contribution Margin 6 120,000 40%
Fixed Expense 45,000
Income Before Tax 75,000
Tax Expense ( 30%) 22,500
Income After Tax 52,500

REQUIREMENT A:
WHAT IS THE BREAKEVEN POINT IN UNITS?

BEP UNITS 7,500 UNITS


( 45,000 / 6)
BEP SALES 112,500
( 45,000 / 40%)
OR ( 7,500 * 15) 112,500

REQUIREMENT B:
IF THE COMPANY WANTS A 90,000 BEFORE- TAX PROFIT, HOW MANY UNITS MUST IT SELL?

NEW SALES VOLUME = 22,500

UNITS PESOS RATIO Sales Per Unit


Sale 14 315,000 100% V.C Per Unit
Variable Cost 8 180,000 57% CM. PER unit
Contribution Margin 6 135,000 43%
Fixed Expense 45,000
Income Before Tax 90,000
Tax Expense ( 30%)
Income After Tax

REQUIRED UNITS TO SELL 22,500 UNITS REQUIRED SALES AMOUNT


( 135,000 / 6) ( 135,000 / 43%)

REQUIREMENT C:
IF THE COMPANY WANTS A 84,000 BEFORE-TAX PROFIT, HOW MANY UNITS MUST IT SELL?
SALES VOLUME - 21,500 UNITS

UNITS PESOS RATIO


Sale ### 309,000 100%
Variable Cost ### 180,000 58%
Contribution Margin 6.00 129,000 42%
Fixed Expense 45,000
Income Before Tax 84,000
Tax Expense ( 30%)
Income After Tax

REQUIRED UNITS TO SELL 21,500 UNITS REQUIRED SALES AMOUNT 309,000


( 129,000 / 6) ( 129,000 / 42%)

REQUIREMENT D:
IF THE COMPANY WANTS A 30% BEFORE-TAX RETURN ON SALES, WHAT LEVEL OF SALES, IN PESOS DOES IT NEED?
SALES VOLUME - 12,000
UNITS PESOS RATIO
Sale 15 450,000 100%
Variable Cost 9 270,000 60%
Contribution Margin 6 180,000 40%
Fixed Expense 45,000 10%
Income Before Tax 175,000 30%
Tax Expense ( 30%)
Income After Tax 52,500

REQUIRED SALES AMOUNT 450,000


( 180,000 / 40%)

REQUIREMENT E:
IF THE COMPANY WANTS AN AFTER-TAX RETURN ON SALES OF 15.40%, HOW MANY UNITS MUST IT SELL?
SALES VOLUME - 16,667

UNITS PESOS RATIO


Sale 15.00 250,000 100%
Variable Cost 9.00 150,000 60%
Contribution Margin 6.00 100,000 40%
Fixed Expense 45,000 18%
Income Before Tax 75,000 22% ( .1540/.70)
Tax Expense ( 30%)
Income After Tax

REQUIRED UNITS TO SELL 16,667 REQUIRED SALES AMOUNT 250,000


( 100,000 / 6) ( 100,000 / 40%)

REQUIREMENT F:
IF THE COMPANY WANTS AN AFTER-TAX PROFIT OF 56,000 ON ITS EXPECTED SALES VOLUME OF 20,000 UNITS WHAT PRICE
SALES VOLUME - 20,000

UNITS PESO RATIO SALE PRICE PER UNIT


Sales 15.25 305,000 100% ( 305,000 / 20,000)
Variable Cost 9.00 180,000 59%
C.M 6.25 125,000 41%
Fixed Cost 45,000
Profit Before Tax 80,000 ( 56,000 / 70%)
TAX RATE ( 30%)
Profit After Tax 56,000

REQUIREMENT G:
IF THE COMPANY WANTS A AFTER-TAX RETURN ON SALES OF 26.6% ON ITS EXPECTED SALES VOLUME OF 50,000 UNITS, WH
SALES VOLUME - 50,000 UNITS
UNITS PESO RATIO SALE PRICE PER UNIT
Sales 45.00 2,250,000 100% ( 2,250,000 / 50,000)
Variable Cost 36.00 180,000 60%
C.M 9.00 2,070,000 40%
Fixed Cost 45,000 2%
Profit Before Tax 38% ( .2660 / 70%)
Tax Rate (30%)
Profit After Tax
Sales Per Unit ( 315/22.5) 14
V.C Per Unit ( 180 / 22.5) 8
CM. PER unit 6

315,000
OS DOES IT NEED?
20,000 UNITS WHAT PRICE MUST IT CHARGE?

SALE PRICE PER UNIT 15.25


( 305,000 / 20,000)

LUME OF 50,000 UNITS, WHAT PRICE MUST IT CHARGE?

SALE PRICE PER UNIT 45.00


( 2,250,000 / 50,000)

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