Reference no: EM133142941

Questions -

Q1. Judith Corporation has its own cafeteria with the following annual costs: Food - Ph 100,000; Labor-Ph 75,000; Overhead - Ph 110,000. The overhead is 40% fixed. Of the fixed overhead, Ph 25,000 is the salary of the cafeteria supervisor. The remainder of the fixed overhead has been allocated from total company overhead. Assuming the cafeteria supervisor will remain and that Judith will continue to pay his/her salary, the maximum cost Judith will be willing to pay an outsider firm to service the cafeteria is

a. Ph 285,000

b. Ph 175,000

c. Ph 219,000

d. Ph 241,000

Q2. Blue Company has considerable excess manufacturing capacity. A special order's cost sheet includes the following applied manufacturing overhead costs: Fixed costs - Ph 21,000; Variable cost - Ph 33,000. The fixed costs include a normal Ph 3,700 allocation for in-house design costs, although no in-house design will be done. Instead the job will require the use of external designers costing Ph 7,750. What is the total amount to be included in the calculation to determine the minimum acceptable price for the job?

a. Ph 36,700

b. Ph 40,750

c. Ph 54,000

d. Ph 58,050

Q3. BCD Company has 7,000 obsolete toys carried in inventory at a manufacturing cost of Ph6 per unit. If the toys are reworked for Ph 2 per unit, it could be sold for Ph 3 per unit. If the toys are scrapped, it could be sold for Ph 1.85 per unit. Which alternative is more desirable(rework or scrap) and what is the total peso amount of the advantage of that alternative?

a. scrap, Ph 5,950

b. rework, Ph 36,050

c. scrap, Ph 47,950

d. rework, Ph 8,050

Q4. Friar Co. signed a government construction contract providing for a formula price of actual cost plus 10%. In addition, Friar was to receive one-half of any savings resulting from the formula's price being less than the target of Ph 2.2 million. Friar's actual costs incurred were PH 1,920,000. How much should Friar receive from the contract?

a. Ph 2,060,000

b. Ph 2,112,000

c. Ph 2,156,000

d. Ph 2,200,000

Q5. Nova Company has 2,000 obsolete light fixtures that are carried in inventory at a manufacturing cost of Ph 30,000. If the fixtures are reworked for Ph 10,000 if could be sold for Ph 18,000. Alternately, the light fixtures could be sold for Ph 3,000 to a jobber located in a distant city. In a decision model analyzing these alternatives, the opportunity cost would be

a. Ph 3,000

b. Ph 10,000

c. Ph 13,000

d. Ph 30,000