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    MAS Handout 1

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    Eliag Yah
    Galant Co. can produce 3 products (A, B, C) with different selling prices, variable costs, and hours required per unit. The best combination to maximize peso sales is products A and C, with a net profit of P30,000. Variant Co. currently manufactures Part H but Flexi Co. has offered to supply it for P220 per unit, which would save P95,000 in costs and eliminate 75% of the fixed overhead for Part H, making accepting the offer more desirable with a net cost savings of P95,000.

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    MAS Handout 1

    Uploaded by

    Eliag Yah
    34 views1 page
    Galant Co. can produce 3 products (A, B, C) with different selling prices, variable costs, and hours required per unit. The best combination to maximize peso sales is products A and C, with a net profit of P30,000. Variant Co. currently manufactures Part H but Flexi Co. has offered to supply it for P220 per unit, which would save P95,000 in costs and eliminate 75% of the fixed overhead for Part H, making accepting the offer more desirable with a net cost savings of P95,000.

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    MAS Notes Cost Quality

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    Galant Co. can produce 3 products (A, B, C) with different selling prices, variable costs, and hours required per unit. The best combination to maximize peso sales is products A and C, with a net profit of P30,000. Variant Co. currently manufactures Part H but Flexi Co. has offered to supply it for P220 per unit, which would save P95,000 in costs and eliminate 75% of the fixed overhead for Part H, making accepting the offer more desirable with a net cost savings of P95,000.

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    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
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    Download as doc, pdf, or txt
    34 views1 page

    MAS Handout 1

    Uploaded by

    Eliag Yah
    Galant Co. can produce 3 products (A, B, C) with different selling prices, variable costs, and hours required per unit. The best combination to maximize peso sales is products A and C, with a net profit of P30,000. Variant Co. currently manufactures Part H but Flexi Co. has offered to supply it for P220 per unit, which would save P95,000 in costs and eliminate 75% of the fixed overhead for Part H, making accepting the offer more desirable with a net cost savings of P95,000.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as doc, pdf, or txt
    of 1

    Galant Co. has available production capacity of 18,000 hours.

    The facility can be used to produce 3


    products in any combination. Total fixed cost is P18,000. The other pertinent date are as follows:

    A B C

    Selling Price 25 30 35

    Variable Cost 15 14 27

    Hours req. per unit 5 4 2

    Market limit in peso sales none 90,000 87500

    1. What is the best possible combination of products in peso sales?

    2. What is the net profit associated with the best combimation of products?

    Variant Co. manufactures Part H in the fishing operations. The cost per unit of 1,000 units of Part H are:

    Prime cost P75

    Factory Overhead 35 of which 15% is fixed

    Flexi Co. has offered to sell variant 1,000 units of Part H for P220 per unit. If Variant accepts the offer,
    the released facilities could be used to save P95,000 in relevant costs. In addition, 75% of fixed overhead
    applied to Part H would be totally eliminated.

    3. Whaf alternarive is more desirable and what is the corresponding net cost savings?

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