Reference no: EM132703147
UTEX Company has presented to you the following production data. Sales price per yard is P100.00.
2018 2019 2020
Units sold (in yard) 24,000 24,500 26 000
Units produced (in yard) 25,000 24,500 27,000
Standard manufacturing cost per yard:
Variable Cost
Direct Materials P24.00
Direct Labor 16.00
Factory overhead 10.00
Fixed Factory Overhead 15.00
During 2019, the company did not report any capacity variance. Selling, general and administrative expenses vary at the rate of P2.00 per unit while the fixed portion is determined to be P60,000 per annum.
There was no work-in-process inventory on hand at January 1, 2018 - December 31, 2020. Finished goods inventories are maintained on a first-in-first out basis. Ignore income tax in the computation.
Problem 1: What is the net Income (loss) under variable costing in 2018?
a. P772,500
b. P724,500
c. P748,500
d. P724,000
Problem 2: If the company classifies direct materials as a throughput cost, what is the net income (loss) under throughput costing in 2020?
a. P820,500
b. P794,500
c. P748,500
d. P724,500
Problem 3: What is the amount of capacity or volume variance under variable costing in 2020?
a. P7,500- fav
b. P0
c. P7,500- unf.
d. P 500- fav
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