Reference no: EM132587307

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 variable costing for 2020 is

a. P16,000

b. P 8,000.

c. P14,000

d. P22,000.

Question 2: Gottberg Mugs is planning to sell 2,000 mugs and produce 2,200 mugs during April. Each mug requires 2 pounds of resin and one-half hour of direct labor. Resin costs P1 per pound and employees of the company are paid P12.50 per hour. Manufacturing overhead is applied at a rate of 120% of direct labor costs. Gottberg has 2,000 pounds of resin in beginning inventory and wants to have 2,400 pounds in ending inventory. How much is the total amount of budgeted direct labor for April?

a. P25,000

b. P13,750

c. P27,500

d. P12,500