Reference no: EM132587314
Question 1: Green Company sells its product for P11,000 per unit. Variable costs per unit are: manufacturing, P6,000; and selling and administrative, P125. Fixed costs are: P30,000 manufacturing overhead, and P40,000 selling and administrative. There was no beginning inventory at 1/1/20. Production was 20 units per year in 2020 - 2021. Sales was 20 units in 2020, 16 units in 2020, and 24 units in 2021.
Income under absorption costing for 2021 is
a. P41,000
b. P47,000.
c. P39,000
d. P33,000.
Question 2: Safety Seats Company recorded operating data for its shoe division for the year. The company's desired return is 5%.
Sales P500,000
Contribution margin 100,000
Total direct fixed costs 60,000
Average total operating assets 200,000
How much is ROI for the year if management is able to identify a way to improve the contribution margin by P20,000, assuming fixed costs are held constant?
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