Reference no: EM132596622

Question 1: At the beginning of current year, Gem Company declared a 1 for 5 reverse share split, when the market value of share was P100. Prior to the split, the entity had 10,000 shares of P10 par value issued and outstanding. What is the par value of share after the share split?

Question 2: CPA Company is operating at below capacity. The plant manager is considering making component X now being purchased for 220 each, a price that is projected to increase in the near future. The plant has the equipment and labor force required to manufacture the component. The design engineer estimates that each component requires P100 of direct materials and P50 of direct labor. The plant overhead is 200% of direct labor peso cost, and 40% of the overhead is fixed cost. A decision to manufacture component X will result in a gain or (loss) for each component of?