MANAGEMENT ADVISORY SERVICES
CPA Review School of the Philippines
COST-VOLUME-PROFIT ANALYSIS Breakeven Point #$ Scr%&'le( Scr%&'le( )r%in )r%in Co&p%n* Co&p%n* h%s fi+e( fi+e( costs of P,-.---$ P,-.---$ At % s%les vol!&e vol!&e of P/--.---. P/--.---. ret!rn ret!rn on s%les is 0-12 %t % P#--.--- vol!&e. ret!rn on s%les is 331$ 4h%t is the 're%k5even vol!&e6 A$ P03-.--C$ P33#.---7 )$ P3--.--D$ P8#-.--9$ )!sh Electron Electronics. ics. Inc$ Inc$ h%( the followin followin:: s%les res!lts res!lts for for 3--8; TV sets CD pl%*er Peso s%les co&ponent r%tio -$/-$/Contri'!tion &%r:in r%tio -$8-$8)!sh Electronics. Inc$ h%( fi+e( costs of P3.8--.---$ The 're%k5even s%les in pesos for )!sh Electronics. Inc$ %re; TV sets CD pl%*er A$ P0.<--.--P0.<--.--) P0.<--.--P0.<--.--C$ P0.#--.--P0.#--.--D$ P0.#/0.,0# P0.#/0.,0#
R%(ios -$8-$9-
R%(ios P/.9--.--P0.9--.--P3.---.--P3.-83.##/
=$ Gl%reless Gl%reless Co&p%n* Co&p%n* &%n!f%ct!r &%n!f%ct!res es %n( sells s!n:l%s s!n:l%sses$ ses$ Price %n( cost cost (%t% %re %s follows; follows; Sellin: price per p%ir of s!n:l%sses P3#$-V%ri%'le costs per p%ir of s!n:l%sses; R%w &%teri%ls P00$-Direct l%'or #$-M%n!f%ct!rin: overhe%( 3$#Sellin: e+penses 0$/Tot%l v%ri%'le costs per !nit P0,$
orec%ste( %nn!%l s%les vol!&e ?03-.--- p%irs@ P/.---.--Inco&e t%+ r%te 8-1 Gl%reless Co&p%n* esti&%tes th%t its (irect l%'or costs will incre%se incre%se < percent ne+t *e%r$ ow &%n* !nits will Gl%reless h%ve to sell ne+t *e%r to re%ch 're%keven6
Preweek !i""er
<$ M%(el Co&p%n* Co&p%n* &%n!f%ct!re &%n!f%ct!ress % sin:le electronic electronic pro(!ct pro(!ct c%lle( 4%l%sti 4%l%stik$ k$ 4%l%stik 4%l%stik sells sells for P,-per !nit$ In 3---. the followin: v%ri%'le costs were inc!rre( inc!rre( to pro(!ce e%ch 4%l%stik (evice$ Direct l%'or P 0%ctor* overhe%( 0 -# Sellin: costs =# Tot%l v%ri%'le costs P 9 -M%(el is s!'Bect to 8- percent inco&e nco&e t%+ r%te. %n( %nn!%l fi+e( costs %re P9.9--.---$ E+cept for %n oper%tin: loss inc!rre( in the *e%r of incorpor%tion. the fir& h%s 'een profit%'le over the l%st five *e%rs$ In 3--0. % si:nific%nt ch%n:e in M%(els pro(!ction technolo:* c%!se( % 0-1 incre%se in %nn!%l fi+e( costs %n( % 3-1 !nit cost incre%se in the (irect l%'or co&ponent %s % res!lt of hi:her skille( (irect l%'or$ owever. this ch%n:e per&itte( the repl%ce&ent of % costl* i&porte( co&ponent with % loc%l co&ponent$ co&ponent$ The effect effect w%s to re(!ce !nit &%teri%l &%teri%l costs costs '* 3#1$ There h%s 'een 'een no ch%n:e in the 4%l%stik sellin: price$ The %nn!%l s%les !nits re!ire( for M%(el to 're%keven %re; A$ )$ C$ D$ 3 --3 3 . -- 33.--08.--08.--3 --0 3 - . <8 33.8-= 33.8-= 3-.<8Profit Planning ,$ Si:n%l Co$ Co$ &%n!f%ct!res &%n!f%ct!res % sin:le sin:le pro(!ct$ pro(!ct$ >or 3---. the co&p%n* co&p%n* h%( s%les s%les of P,-.---. P,-.---. v%ri%'le v%ri%'le costs of P#-.---. %n( fi+e( costs of P/-.---$ Si:n%l e+pects its cost str!ct!re %n( s%les price per !nit to re&%in the s%&e in 3--0. however tot%l s%les %re e+pecte( to B!&p '* 3-1$ If the 3--0 proBections %re re%li"e(. net inco&e in 3--0 sho!l( e+cee( net inco&e in 3--- '* A $ 0-- 1 C$ 3-1 ) $ <-1 D$ #-1 0-$ Si+5T Si+5Two wo Conven Convenien ience ce Store Store c!rren c!rrentl* tl* opens onl* onl* Mon(%* Mon(%* thro!:h thro!:h S%t!r( S%t!r(%* %*$$ Si+5T Si+5Two wo is consi(erin: consi(erin: openin: on S!n(%*s$ The %nn!%l incre&ent%l incre&ent%l fi+e( costs of S!n(%* openin:s %re esti&%te( %t P/,.---$ Si+5Twos :ross &%r:in on s%les is 3# percent$ Si+5Two esti&%tes &%tes th%t 9percent of its S!n(%* s%les to c!sto&ers wo!l( 'e &%(e on other (%*s if the stores were not open on S!n(%*s$ The one5(%* vol!&e of S!n(%* s%les th%t wo!l( 'e necess%r* for Si+5Two Si+5Two to %tt%in
MANAGEMENT ADVISORY SERVICES )$ P#.---
CPA Review School of the Philippines D$ P8.#--
Preweek !i""er
00$ Gorill%. Co$ provi(es two pro(!cts. M %n( 4$ M %cco!nts for 9- percent of tot%l s%les. v%ri%'le cost %s % percent%:e of sellin: price %re 9-1 for M %n( <#1 for 4$ 4$ Tot%l Tot%l fi+e( costs %re P33#.---$ If fi+e( costs will incre%se '* /- percent. wh%t %&o!nt of peso s%les wo!l( 'e necess%r* to :ener%te %n oper%tin: profit of P8<.---6 A$ P0./#-.--C$ P0.0/#.--)$ P8<9.83# D$ P,0-.--03$ Mo!nt P%rk. Inc$ h%( the followin: econo&ic infor&%tion for the *e%r 3--3; S%les?#-.--- !nits P3-@ P0.---.--V%ri%'le &%n!f%ct!rin: costs 8--.-->i+e( costs 3#-.--Inco&e t%+ r%te 8- percent Mo!nt P%rk '!(:ets its 3--/ s%les %t 9-.--- !nits or P0.3--.---$ P0.3--.---$ The co&p%n* %nticip%tes %nticip%tes incre%se( co&petition2 hence. %n %((ition%l P=#.--- %(vertisin: costs is '!(:ete( in or(er to &%int%in its s%les t%r:et for 3--/$ 4h%t is the %&o!nt of peso s%les nee(e( for 3--/ in or(er to e!%l the %fter5t%+ inco&e in 3--36 A$ P0.03#.--C$ P0.0<=.#-)$ P0./3#.--D$ P0./<=.#-0/$ F%r" Co&p%n* pro(!ces % sin:le pro(!ct$ It sol( 3#.--- !nits l%st *e%r with th the followin: res!lts; S%les P93#.--V%ri%'le costs P / = # . -- >i+e( costs 0# - . --#3#.--Net inco&e 'efore t%+es P0--.--Inco&e t%+es 8-.--Net inco&e P 9-.--In %n %tte&pt to i&prove its pro(!ct in the co&in: *e%r. F%r" is consi(erin: repl%cin: % co&ponent p%rt in its pro(!ct th%t h%s % cost of P3$#- with % new %n( 'etter p%rt costin: P8$#- per !nit$ A new &%chine will %lso 'e nee(e( to incre%se pl%nt c%p%cit*$ c%p%cit*$ The &%chine wo!l( cost P0<.--- with % !sef!l life of 9 *e%rs %n( no s%lv%:e v%l!e$ The co&p%n* !ses str%i:ht5l str%i:ht5line ine (epreci%tion (epreci%tion on %ll pl%nt %ssets$ If F%r" wishes to &%int%in the s%&e contri'!tion &%r:in r%tio %fter i&ple&entin: the ch%n:es. wh%t sellin: price per !nit of pro(!ct &!st it ch%r:e ne+t *e%r to cover the incre%se( &%teri%l costs6 A $ P 3=$ -C$ P/3$#-
MANAGEMENT ADVISORY SERVICES
CPA Review School of the Philippines
Point of Inifferen!e 08$ R%vine R%vine Ski Co&p%n* recentl* recentl* e+p%n(e( its &%n!f%ct!ri &%n!f%ct!rin: n: c%p%cit* to %llow it to pro(!ce !p to 0#.--- p%irs of cross5co!ntr* skis of either the &o!nt%ineerin: &o(el or the to!rin: &o(el$ The s%les (ep%rt&ent %ss!res &%n%:e&ent th%t it c%n sell 'etween ,.--- %n( 0/.--- p%irs ?!nits@ of either pro(!ct this *e%r$ )ec%!se the &o(els %re ver* si&il%r. si&il%r. R%vine Ski will pro(!ce onl* one of the two &o(els$ The infor&%tion 'elow w%s co&pile( '* the %cco!ntin: (ep%rt&ent$ Mo!nt%ineerin: To!rin: Sellin: price per !nit P<<-$-P<--$-V%ri%'le costs per !nit P#3<$-P#3<$->i+e( costs will tot%l P/.9,9.--- if the &o!nt%ineerin: &o!nt%ineerin: &o(el is pro(!ce( pro(!ce( '!t will 'e onl* P/.09<.--- if the to!rin: &o(el is pro(!ce($ R%vine Ski is s!'Bect to % 8-1 inco&e t%+ r%te$ The tot%l s%les reven!e %t which R%vine Ski Co&p%n* wo!l( &%ke the s%&e profit or loss re:%r(less of the ski &o(el it (eci(e( to pro(!ce is A$ P<.<--.--C$ P,.38-.--)$ P8.338.--D$ P9.<98.--0#$ V%lle* le* of >ire Corpor%tion Corpor%tion h%s one (ep%rt&ent (ep%rt&ent th%t pro(!ces three repl%ce&en repl%ce&entt p%rts for the co&p%n*$ owever. onl* one p%rt c%n c%n 'e pro(!ce( in %n* &onth 'ec%!se of the %(B!st&ents th%t &!st 'e &%(e to the e!ip&ent$ The (ep%rt&ent c%n pro(!ce !p to 0#.--- !nits of %n* one of the three p%rts in e%ch &onth$ The co&p%n* e+presses e+presses the &onthl* %fter t%+ costvol!&eprof costvol!&eprofitit rel%tionships onships for e%ch p%rt !sin: %n e!%tion e!%tion ðo($ The for&%t of the e!%tions %n( the e!%tion for e%ch repl%ce&ent p%rt %re :iven 'elow; ?ATR@ H ??SP VC@ + ?J@ >C@ ATR K %fter5t%+ r%te VC K v%ri%'le cost >C K fi+e( costs SP K sellin: price J K !nits P%rt P%rt E!%tions A F8# $9 ??P8$-- P0$3#@ ?J@ P//.8--@ )T9# $9 ??P8$-# P3$##@ ?J@ P0#.---@ GM0= $9 ??P8$0- 5 P3$--@ ?J@ 5 P33./9#@ The pro(!ction %n( !nit s%les vol!&e level %t which V%lle* will 'e in(ifferent %s to whether P%rt )T93 or GM0= is pro(!ce( is
Preweek !i""er
MANAGEMENT ADVISORY SERVICES
CPA Review School of the Philippines
09$ )M Motors. Inc$ e&plo*s 8- s%les personnel to &%rket its line of l!+!r* %!to&o'iles$ The %ver%:e c%r sells for P0.3--.--P0.3--.--- %n( % 91 co&&issi co&&ission on is p%i( to the s%lesperson$ s%lesperson$ )M Motors is consi(erin: % ch%n:e to % co&&ission %rr%n:e&ent th%t wo!l( p%* e%ch s%lesperson % s%l%r* of P38.--- per &onth pl!s % co&&ission of 31 of the s%les &%(e '* th%t s%lesperson$ The %&o!nt of tot%l c%r s%les %t which )M Motors wo!l( 'e in(ifferent %s to which pl%n to select is A$ P33.#--.--C$ P38.---.--)$ P/-.---.--D$ P03.---.--0=$ L%p%tero. Inc$ oper%tes % ch%in ch%in of shoe stores %ro!n( the co!ntr*$ co!ntr*$ The stores c%rr* &%n* st*les of shoes th%t %re %ll sol( %t the s%&e price$ To enco!r%:e enco!r%:e s%les personnel to 'e %::ressive in their s%les efforts. the co&p%n* p%*s % s!'st%nti%l s%les co&&ission on e%ch p%ir of shoes sol($ S%les personnel %lso receive % s&%ll '%sic s%l%r*$ The followin: cost %n( reven!e (%t% rel%te to Store , %n( %re t*pic%l of the co&p%n*s &%n* s%les o!tlets; Sellin: price P <-V%ri%'le e+penses; Invoice costs P /9 S%les co&&ission 08P#->i+e( e+penses per *e%r; Re R en t P0.9--.-- A (vertisin: /.---.-- S% S%l%ries 0.8--.-- Tot%l To P9.---.--The co&p%n* is consi(erin: eli&in%tin: s%les co&&issions entirel* in its stores %n( incre%sin: fi+e( s%l%ries '* P3.083.--- %nn!%ll*$ If this ch%n:e is &%(e. wh%t will 'e the n!&'er of p%irs of shoes to 'e sol( '* Store , to 'e in(ifferent to co&&ission '%sis6 A$ 3#./-C$ 0<.#-# )$ 0#./-D$ 30.--Sen"itivit# Anal#"i" 0<$ If fi+e( costs incre%se while le v%ri%'le cost per !nit re&%ins const%nt. the contri'!tion &%r:in &%r:in will 'e A$ lo lower C$ !n !nch%n:e( )$ hi:her D$ !npre(ict%'le
Preweek !i""er
0,$ >ir& D %n( >ir& S %re co&petitors tors within the s%&e in(!str*$ in(!str*$ >ir& D pro(!ces pro(!ces its pro(!ct !sin: !sin: l%r:e %&o!nts %&o!nts of (irect (irect l%'or$ >ir& S h%s repl%ce( (irect l%'or with invest&ent invest&ent in &%chiner*$ ner*$ ProBecte( ProBecte( s%les for 'oth fir&s %re fifteen percent less th%n in the prior *e%r$ 4hich 4hich st%te&ent re:%r(in: proBecte( profits is tr!e6 A$ >ir& D will will lose &ore &ore profit profit th%n th%n >ir& S$ )$ >ir& S will lose &ore &ore profit profit th%n th%n >ir& >ir& D$ C$ >ir& D %n( %n( >ir& S will lose lose the s%&e s%&e %&o!nt of of profit$ profit$ D$ Neither Neither >ir& D nor >ir& >ir& S will lose lose profit$ profit$ 3-$ F%st &onth. L%&or% L%&or% Co&p%n* h%( %n inco&e of P-$=# per !nit with s%les of 9-.--- !nits$ D!rin: the c!rrent &onth when the !nit s%les %re e+pecte( to 'e onl* 8#.---. there is % loss of P0$3# per !nit$ )oth the v%ri%'le v%ri%'le cost per !nit %n( tot%l fi+e( costs costs re&%in re&%in const%nt$ const%nt$ The fi+e( costs costs %&o!nte( to A$ P< P <-. --C$ P3 P 38=.#-)$ P/9-.--D$ P30-.--30$ The Fi'er%l M%rketin: M%rketin: Co$. Co$. is e+pectin: %n incre%se of fi+e( costs '* P=<.=#- !pon &ovin: &ovin: their pl%ce of '!siness to the (owntown %re%$ Fikewise it is %nticip%tin: p%tin: th%t the sellin: price per !nit %n( the v%ri%'le e+penses will not ch%n:e$ At present. the s%les vol!&e necess%r* to 're%keven is P=#-.--- '!t with the e+pecte( incre%se in fi+e( costs. the s%les vol!&e necess%r* to 're%keven wo!l( :o !p to P,=#.---$ )%se( on these proBections. wh%t were the tot%l fi+e( costs 'efore the incre%se of P=<.=#-6 A$ P/80.3#C$ P0i+e( costs 0-#.--Net inco&e P /#.--M%n%:e&ent M%n%:e&ent is !nh%pp* with the res!lts ts %n( pl%ns to &%ke so&e ch%n:es for ne+t *e%r$ *e%r$ If &%n%:e&ent i&ple&ents % new &%rketin: pro:r%&. fi+e( costs %re e+pecte( to incre%se '* P0,.3-- %n( v%ri%'le costs to incre%se '* P0 per !nit$ Jnit s%les %re e+pecte( to incre%se '* 0#
MANAGEMENT ADVISORY SERVICES A$ Decre%se of P30.3-)$ Incre%se of P0.<--
CPA Review School of the Philippines C$ Incre%se of P0/.<-D$ Incre%se of P08.<--
3/$ C%n(*&%n C%n(*&%n Co&p%n* is % wholes%le wholes%le (istri'!tor (istri'!tor of c%n(*$ c%n(*$ The co&p%n* co&p%n* services :rocer* :rocer*.. convenience. %n( (r!: stores in Metro M%nil%$ S&%ll '!t ste%(* :rowth in s%les h%s 'een %chieve( '* the co&p%n* over the p%st few *e%rs while c%n(* prices h%ve 'een incre%sin:$ The co&p%n* is for&!l%tin: its pl%ns for the co&in: fisc%l *e%r$ Presente( 'elow %re the (%t% !se( to proBect the c!rrent *e%rs %fter5t%+ net inco&e of P00-.8--$ M%n!f%ct!rers of c%n(* h%ve %nno!nce( th%t the* will incre%se prices of their pro(!cts %n %ver%:e of 0#1 in the co&in: *e%r (!e to incre%ses in r%w &%teri%l ?s!:%r. coco%. pe%n!ts. etc$@ %n( l%'or costs$ C%n(*&%n Co&p%n* e+pects th%t %ll other costs will re&%in %t the s%&e r%tes or levels %s the c!rrent *e%r$ C%n(*&%n is s!'Bect to 8- percent t%+ r%te$ Aver%:e sellin: price P8$-- per 'o+ Aver%:e v%ri%'le costs Cost of c%n(* P3$-- per 'o+ Sellin: e+penses -$8- per 'o+ Tot%l P3$8- per 'o+ Ann!%l fi+e( costs Se Sellin: P 09 , . - - A(&inistr%tive 3<-. --Tot%l P 88- . --E+pecte( %n %nn!%l s% s%les vo vol!&e ?/ ?/,-.--- 'o 'o+es@ P0.#9-.--If net inco&e %fter t%+es is to re&%in the s%&e %fter the cost of c%n(* incre%ses '!t no incre%se in the s%les price is &%(e. how &%n* 'o+es of c%n(* &!st C%n(*&%n sell6 A$ 8< 8 <- . --C$ 3=.9-)$ 88 -- . --D$ 3,./-Margin of Safet# 38$ Cl%re&ont Cl%re&ont Co&p%n* Co&p%n* h%( is % &%n!f%ct!rer &%n!f%ct!rer of its onl* one pro(!ct line$ line$ It h%( s%les of P8--.--P8--.--for 3--3 with % contri'!tion &%r:in r%tio of 3- percent$ Its &%r:in of s%fet* r%tio w%s 0- percent$ 4h%t %re the co&p%n*s fi+e( costs6 A$ P= P =3.--C$ P3 P3<<.--)$ P< P <-.--D$ P/ P/3-.--3#$ Fe&er* Corpor%tion h%( s%les of P03-.--- for the &onth of M%*$ M%*$ It h%s % &%r:in &%r:in of s%fet* r%tio r%tio of 3# percent. %n( %fter5t%+ ret!rn on s%les of 9 percent$ The co&p%n* %ss!&es its s%les const%nt
)$ P, P ,-. ---
Preweek !i""er D$ P/ P /9-.---
MANAGEMENT ADVISORY SERVICES
CPA Review School of the Philippines
$egree of O%erating Leverage 39$ A ver* hi:h oper%tin: lever%:e in(ic%tes n(ic%tes th%t % fir& fir& A$ h%s h%s hi:h hi:h fi+ fi+e( e( cos costs ts )$ h%s h%s % hi:h : h net net inc inco& o&ee C$ h%s hi:h hi:h v%ri% v%ri%'le 'le cost costss D$ is oper%tin oper%tin:: close close to its ts 're%keven 're%keven point 3=$ The Di(%n: Di(%n: Co&p%n* h%s h%s %n oper%tin: lever%: lever%:ee of 3$ S%les for 3--0 3--0 %re P3.---.--P3.---.--- with % contri'!tion &%r:in of P0.---.---$ S%les %re e+pecte( to 'e P/.---.--- in 3--3$ Net inco&e for 3--3 c%n 'e e+pecte( to incre%se '* wh%t %&o!nt over 3--06 A$ P3#-.--C$ P#--.--)$ 3-- percent D$ 8- percent Sit&ational !estions 3< thr! /8 %re '%se( on the followin: infor&%tion; C%l%&'% ospit%l oper%tes % :ener%l hospit%l '!t rents sp%ce %n( 'e(s to sep%r%te entities for speci%li"e( tre%t&ent s!ch %s pe(i%trics. &%ternit*. &%ternit*. ps*chi%tric. etc$ C%l%&'% ch%r:es e%ch sep%r%te entit* for co&&on services to its p%tients like &e%ls %n( l%!n(r* %n( fo r %ll %(&inistr%tive services s!ch %s 'illin:s. collections. etc$ All !ncollecti'le %cco!nts %re ch%r:e( (irectl* to the entit*$ Sp%ce %n( 'e( rent%ls %re fi+e( for the *e%r$ >or the entire *e%r en(e( !ne /-. the Pe(i%trics Dep%rt&ent %t C%l%&'% ospit%l ch%r:e( e%ch p%tient %n %ver%:e of P9# per (%*. h%( % c%p%cit* of 9- 'e(s. oper%te( 38 ho!rs per (%* for /9# (%*s. %n( h%( reven!e of P0.0/<.<--$ E+penses ch%r:e( '* the hospit%l to the Pe(i%trics Dep%rt&ent for the *e%r en(e( !ne /- were; )%sis of Alloc%tion P%tient D% D%*s )e( C% C%p%cit* Diet%r* P 83.,#3 %nitori%l P 03.<-F%!n(r* 3<.--F%'. other th%n (irect ch%r:es to p%tients 8=.<-Ph%r&%c* //.<-Rep%irs %n( &%inten%nce #.3-=.08Gener%l %(&inistr%tive services 0/0.=9Rent 3=#./3-
Preweek !i""er
Other
0<.-8< $ P393.<-P8#/.--The onl* personnel (irectl* e&plo*e( '* the Pe(i%trics Dep%rt&ent %re s!pervisin: n!rses. n!rses. %n( %i(es$ The hospit%l h%s &ini&!& ni&!& personnel re!ire&ents '%se( on tot%l %nn!%l p%tient (%*s$ ospit%l re!ire&ents 'e:innin: %t the &ini&!&. e+pecte( level of oper%tion follow; Ann!%l P%tient D%* D%*s Ai(es N!rses S!pervisin: N!rses 0-.--- 08.--30 00 8 08.--0 0=.--33 03 8 0=.--0 3/.=3# 33 0/ 8 3/.=39 3#.##3# 08 # 3#.##0 3=./=# 39 08 # 3=./=9 3,.3-3, 09 9 The st%ffin: levels %'ove represent f!ll5ti&e e!iv%lents. %n( it sho!l( 'e %ss!&e( th%t the Pe(i%trics Dep%rt&ent %lw%*s e&plo*s onl* the &ini&!& n!&'er of re!ire( f!ll5ti&e e!iv%lent personnel$ Ann!%l s%l%ries for e%ch cl%ss of e&plo*ee follow; follow; s!pervisin: n!rses. P0<.---2 n!rses. P0/.---2 %n( %i(es. P#.---$ S%l%r* e+pense for the *e%r en(e( !ne /- for s!pervisin: s!pervisin: n!rses. n!rses. %n( %i(es w%s P=3.---. P09,.---. %n( P00-.---. respectivel*$ The Pe(i%trics Dep%rt&ent oper%te( %t 0--1 c%p%cit* (!rin: 000 000 (%*s of the p%st *e%r$ It is esti&%te( th%t (!rin: ,- of these c%p%cit* (%*s. the (e&%n( %ver%:e 0= p%tients &ore th%n c%p%cit* %n( even went %s hi:h %s 3- p% tients &ore on so&e (%*s$ The hospit%l h% s %n %((ition%l 3- 'e(s %v%il%'le for rent for the co&in: fisc%l *e%r$ 3<$ The v%ri%'le v%ri%'le e+pense e+pense per p%tient p%tient (%* is A $ P 0#$ -< ) $ P 03$ #-
C$ P0#$-D$ P#-$--
3,$ The contri'!tion contri'!tion &%r:in &%r:in per p%tient p%tient (%* is A $ P 8,$ ,3 ) $ P #3$ #-
C$ P#-$-D$ P#3$--
/-$ ow &%n* p%tient (%*s %re necess%r* necess%r* to cover fi+e( fi+e( costs for 'e( c%p%cit* c%p%cit* %n( for s!pervisor* s!pervisor* n!rses6 A$ ,.#-C$ 03.#-)$ 00.#-D$ 0-.#--
MANAGEMENT ADVISORY SERVICES )$ 0#.3--
CPA Review School of the Philippines D$ 08.33-
/3$ If the Pe(i%trics Dep%rt&ent rente( %n %((ition%l on%l 3- 'e(s %n( %ll other f%ctors re&%in re&%in the s%&e %s in the p%st *e%r. wh%t wo!l( 'e the incre%se in reven!e6 A$ P, P ,,.8#C$ P0 P0-#.8#)$ P< P <=.=#D$ P< P<,.=#//$ Contin!in: to consi(er the 3- %((ition%l rente( 'e(s. the incre%se in tot%l v%ri%'le cost %pplie( per p%tient (%* is A$ P3 P 33.,/# C$ P3 P33.,9# )$ P3 P 33.,#D$ P3 P3/.,/# /8$ 4h%t is the incre%se( fi+e( cost %pplie( for 'e( c%p%cit*. c%p%cit*. :iven the incre%se( n!&'er of 'e(s6 A$ P0#0.--C$ P08=.--)$ P0=/.,#D$ P0#3.--!estions /# thr! /= %re '%se( on the followin: infor&%tion$ Ms$ C%sserole st%rte( % pi""% rest%!r%nt in 0,,<$ >or this p!rpose % '!il(in: w%s rente( for P8-- per &onth$ Two wo&en were hire( to work f!ll ti&e %t the rest%!r%nt %n( si+ colle:e st!(ents were hire( to work /- ho!rs per week (eliverin: pi""%$ This level of e&plo*&ent h%s 'een consistent$ An o!tsi(e %cco!nt%nt w%s hire( for t%+ %n( 'ookkeepin: p!rposes. for which Ms$ C%sserole p%*s P/-- per &onth$ The necess%r* necess%r* rest%!r%nt rest%!r%nt e!ip&ent e!ip&ent %n( (eliver* ver* c%rs were were p!rch%se( p!rch%se( with c%sh$ Ms$ C%sserole C%sserole h%s notice( th%t e+penses for !tilities !tilities %n( s!pplies h%ve 'een r%ther const%nt$ const%nt$ Ms$ C%sserole C%sserole incre%se( incre%se( her '!siness 'etween 'etween 0,,< %n( 3--0$ Profits Profits h%ve &ore th%n (o!'le( since 0,,<$ Ms$ C%sserole (oes not !n(erst%n( wh* profits h%ve incre%se( f%ster th%n vol!&e$ A proBecte( inco&e st%te&ent for the *e%r en(e( Dece&'er /0. 3--3. prep%re( '* the %cco!nt%nt. is shown 'elow;
S % l es Cost of foo( sol( 4%:es frin:e 'enefits; Rest%!r%nt help Deliver* help Re n t Acco!ntin: services Depreci%tion; Deliver* e!ip&ent Rest%!r%nt e!ip&ent Jtilities S!pplies Net inco&e 'efore t%+es Inco&e t%+es ?8-1@ Net inco&e Note; The %ver%:e pi""% sells for P3$#-$
Preweek !i""er P,#.--P 3 < . #- <.0#0=./-8.<-/.9-#.--/.--3./3# 0.3--
/#$ 4h%t is the t%+ shiel( shiel( on the nonc%sh nonc%sh fi+e( costs6 costs6 A$ P/.3-C$ P/.8-)$ P08. ,# ,#D$ P#.8- D$ /9$ 4h%t is the 're%keven point in n!&'er of pi""%s th%t &!st 'e sol(6 sol(6 A$ 3#.,3, C$ 0<.0#)$ 3/.#9, D$ 83.008 /=$ 4h%t is the c%sh flow 're%keven point in n!&'er of pi""%s pi""%s th%t &!st 'e sol(6 A$ 0,.#3, C$ 03.,,)$ 30.3<8 D$ 0-.==/
=/.<=# P30.03# <.8#P03.9=#
