Reference no: EM133145249
Questions -
Q1. A company has the following cost structure: Direct labor per unit P 6 Direct materials per unit P 2 Fixed manufacturing overhead P 15,000 Variable manufacturing overhead per unit P 3 Variable selling and administrative expense per unit P 2 Fixed selling and administrative expense P 25,000 How many units must be sold at P 25 each to yield a contribution margin of P 75,000?
3,000 units
4,412 units
5,357 units
6,250 units
Q2. An entity has fixed costs of P200,000 and variable costs per unit of P6. It plans on selling 40,000 units in the coming year. If the entity pays income taxes on its income at a rate of 40%, what sales price must the firm use to obtain an after-tax profit of P24,000 on the 40,000 units?
Ph 11.36
Ph 11.60
Ph 12.00
Ph 12.50
Q3. A retail company determines its selling price by marking up variable costs 60%. In addition, the company uses frequent selling price markdowns to stimulate sales. If the markdowns average 10%, what is the company's contribution margin ratio?
27.5%
30.6%
37.5%
41.7%
Q4. Acacia Corporation would like to market a new product at a selling price of Ph 15 per unit. Fixed costs for this product are Ph 1,000,000 for less than 500,000 units of output and P1,500,000 for 500,000 or more units of output. The contribution margin percentage is 20%. How many units of this product must be sold to earn a target operating income of Ph 1 million?
825,530
785,320
754,900
833,334
Q5. Robco manufactures and sells FM radios. Information on last year's operations (sales and production of Model A1) follows: Sales price per unit P 30 Costs per unit: Direct material 7 Direct labor 4 Overhead (50% variable) 6 Selling costs (40% variable) 10 Production in units 10,000 Sales in units 9,500. The Model B2 radio is currently in production and it renders the Model A1 radio obsolete. Assume that the remaining Model A1 radios can be sold through normal channels or to a foreign buyer for P6 per unit. If sold through regular channels, the minimum acceptable price will be?
Ph 4
Ph 10
Ph 24
Ph 33
Q6. Capital Company has decided to discontinue a product produced on a machine purchased 4 years ago at a cost of P70,000. The machine has a current book value of P30,000. Due to technologically improved machinery now available in the marketplace the existing machine has no current salvage value. The company is reviewing the various aspects involved in the production of a new product. The engineering staff advised that the existing machine can be used to produce the new product. Other costs involved in the production of the new product will be materials of P20,000 and labor priced at P5,000. Ignoring income taxes, the costs relevant to the decision to produce or not to produce the new product would be?
Ph 25,000
Ph 55,000
Ph 30,000
Ph 95,000
Q7. Questions 7and8 are based on the following information: Regine Company manufactures plugs used in its manufacturing cycle at a cost of Ph 36 per unit that includes Ph 8 of fixed overhead. Regine needs 30,000 of these plugs annually and Orlan Company has offered to sell these units to Regine at Ph 33 per unit. If Regine decides to purchase the plugs, Ph 60,000 of the annual fixed overhead applied will be eliminated, and the company may be able to rent the facility previously used for manufacturing the plugs. If Regine Company purchases the plugs but does not rent the unused facility, the company would?
save Ph 3.00 per unit
lose Ph 6.00 per unit
save Ph 2.00 per unit
lose Ph 3.00 per unit
Q8. If the plugs are purchased and the facility rented, Regine Company wishes to realize Ph 100,000 in savings annually. To achieve this goal, the minimum annual rent on the facility must be
Ph 10,000
Ph 40,000
Ph 70,000
Ph 190,000
Q9. ABC Company receives a one-time specila order for 5,000 units of Clean. Acceptance of this order will not affect the regular sales of 80,000 units. Variable selling costs for each of these 5,000 units will be Ph 1.00. How much is the differential cost to ABC Company of accepting this special order?
Ph 39,000
Ph 34,000
Ph 30,250
Ph 29,000