1.

ABC Company is concerned about its operating performance, as summarized below:

Revenues (P12.50 per unit) P300,000

Variable costs 180,000

Operating income/ (loss) (40,000)

How many additional units should have been sold in order for the company to break even in 2021?

Answer: 8,000

2. Toy Story Corporation manufactures and sells dolls. The following information relates to the operating
results for the last quarter:

Stuff toys sold                                                   19,375

Breakeven point in number of toys                 15,500

Breakeven point in pesos sales                       P65,875

Total fixed costs                                               P47,275

What was Toy Story's variable cost per doll?

Answer: 0.96

3. The controller of Joy Company has requested a quick estimate of the manufacturing supplies needed
for the Morton Plant for the month of July, when production is expected to be 470,000 units to meet the
ending inventory requirements and sales of 475,000 units. Joy Company's budget analyst has the
following actual data for the last three months.

Month                                                   Production in units                                          Manufacturing supplies

March                                                    450,000                                                            723,060

April                                                       540,000                                                            853,560

May                                                        480,000                                                             766,560

Using these data and the high-low method to develop a cost estimating equation, the estimate of the
needed manufacturing supplies for July would be:

Answer: 752,060
4. The following operating data are available from the records of Sheena Company for the month of
January 2021:

Sales (P 70 per unit)                     P 210,000

Direct materials                             59,200

Direct labor                                    48,000

Manufacturing overhead:

Fixed                                                36,080

Variable                                           24,000

Marketing and general expenses:

Fixed                                                11,000

Variable                                            5% of sales

Production in units - 3,280 units

Beginning inventory- none

The profit for the month under the variable costing method would be:

Answer: 32,420