Reference no: EM133037500

Problem - The Yellow Company has the capacity to manufacture 20,000 units per month. However, present plans call for monthly production and sales of 15,000 units at P21.00 each. Costs per unit are as follows:

Direct materials P7.00

Direct labor 4.20

Variable factory overhead 1.05

Fixed factory overhead 2.10

Variable marketing expenses 0.35

Fixed administrative expenses 1.40

Total P16.10

Required -

1. Assume that Yellow Company accepted the special order of 5,000 units at P14.50 per unit, The decrease or increase in contribution margin shall amount to?

2. The unit cost figure the company would use in costing inventory using ABSORPTION COSTING is?

3. Assuming that the regular sales price of the company is reduces to P19.00 resulting in a 10% increase in sales volume, the effect in the monthly contribution margin will?