7. 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 cach. Costs per unit are as follows: Direct materials P7.00 Direct labor 4.20 1.05 Variable factory overhead Fixed factory overhead Variable marketing expenses Fixed administrative expenses 2.10 0.35 1.40 P16.10 Total Assume that Yellow Company accepted a special order of 5,000 units at PI5.00 per unit, the decrease or increase in contribution margin shall amount to a. P5,500 decrease b. P12,000 decrease e. None of these; answer is c. P12,000 increase d. P13,750 increase 8. Refer to no. 7. The unit cost figure the company would use in costing inventory using direct costing is a. P12.25 b. P12.60 c. P14.70 d. P16.10 e. None of these; answer is 9. Refer to no. 7. Assuming that the regular sales price of the company is reduced to P19.00 resulting in a 10% increase in sales volume, the effect in the monthly contribution margin will be a. P20,400 decrease b. P20,400 increase c. P30,000 increase d. P33,000 increase e. None of these; answer is
7. 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 cach. Costs per unit are as follows: Direct materials P7.00 Direct labor 4.20 1.05 Variable factory overhead Fixed factory overhead Variable marketing expenses Fixed administrative expenses 2.10 0.35 1.40 P16.10 Total Assume that Yellow Company accepted a special order of 5,000 units at PI5.00 per unit, the decrease or increase in contribution margin shall amount to a. P5,500 decrease b. P12,000 decrease e. None of these; answer is c. P12,000 increase d. P13,750 increase 8. Refer to no. 7. The unit cost figure the company would use in costing inventory using direct costing is a. P12.25 b. P12.60 c. P14.70 d. P16.10 e. None of these; answer is 9. Refer to no. 7. Assuming that the regular sales price of the company is reduced to P19.00 resulting in a 10% increase in sales volume, the effect in the monthly contribution margin will be a. P20,400 decrease b. P20,400 increase c. P30,000 increase d. P33,000 increase e. None of these; answer is
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:7. 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 cach. Costs per unit are as follows:
Direct materials
P7.00
Direct labor
4.20
Variable factory overhead
Fixed factory overhead
Variable marketing expenses
Fixed administrative expenses
1.05
2.10
0.35
1.40
P16.10
Total
Assume that Yellow Company accepted a special order of 5,000 units at PI5.00 per unit, the decrease or
increase in contribution margin shall amount to
a. P5,500 decrease
b. P12,000 decrease
c. P12,000 increase
d. P13,750 increase
e. None of these; answer is
8. Refer to no. 7. The unit cost figure the company would use in costing inventory using direct costing
is
d. P16.10
e. None of these; answer is
а. Р12.25
ь. Р12.60
c. P14.70
9. Refer to no. 7. Assuming that the regular sales price of the company is reduced to P19.00 resulting in
a 10% increase in sales volume, the effect in the monthly contribution margin will be
a. P20,400 decrease
b. P20,400 increase
c. P30,000 increase
d. P33,000 increase
e. None of these; answer is
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