Reference no: EM132837983
Questions -
Q1. If the plugs are purchased and the facility rented, Krossiannes Company wishes to realize Php125,000 in savings annually. To achieve this goal, the minimum annual rent on facility must be
a. Php112,500
b. Php187,500
c. Php150,000
d. Php312,500
Q2. Mrs. Lumiart bought a brand new washing machine costing P12,000 if paid in cash. However, she can purchase it on installment basis to be paid within 5 years. If money is worth 8% compounded annually, what is her yearly amortization if all payments are to be made at the beginning of each year?
a. P2,782.85
b. P2,872.58
c. P2,400.00
d. P2,827.58
Q3. Deviant Company is a manufacturer of industrial components. One of its products was Product X, with a selling price of Php360 per unit with a cost per unit of Php250. The Company received a special, one-time, order for 2,400 units of Product X. Assuming that the Company is operating at full capacity and that the contribution margin of the output that would be displaced by the special order is Php24,000.
3- A. Assume that the Company is not operating at full capacity and there is no contribution margin that can be lost, determine the minimum price acceptable.
a. Php250
b. Php260
c. Php300
d. Php360
3-B. Assuming that the Company is operating at full capacity and that the contribution margin of the output that would be displaced by the special order is Php24,000. Determine the minimum price acceptable.
a. Php250
b. Php260
c. Php300
d. Php360
Q4. ABC Company manufactures plugs used in its manufacturing cycle at a cost of Php45 per unit that includes Php10 of fixed overhead. ABC needs 37,500 of these plugs annually, and XYZ Company has offered to sell these units to ABC at Php42 per unit. If ABC decided to purchase the plugs, Php75,000 of the annual fixed overhead will be eliminated, and the company may be able to rent the facility previously used manufacturing the plugs.
4-A. If Gutdamn Company purchases the plugs but does not rent the unused facility, the company would
a. Lose Php3.00 per unit
b. Save Php3.00 per unit
c. Lose Php5.00 per unit
d. Save Php5.00 per unit
4-B. If the plugs are purchased and the facility rented, ABC Company wishes to realize Php125,000 in savings annually. To achieve this goal, the minimum annual rent on facility must be
a. Php112,500
b. Php187,500
c. Php150,000
d. Php312,500
Q5. Company A manufactures bicycles. It can produce 1,000 units in a month for a fixed cost of Php100,000 and variable cost of Php500 per unit. Its current demand is 600 units which it sells at Php1,000 per unit. It is approached by Company B for an order of 200 units at Php700 per unit. Should the company accept the order?
a. Php 300,000
b. Php 200,000
c. Php 150,000
d. None