Professional Documents
Culture Documents
Answer: 5,280
Answer: 5,280
Charlie Corporation's records for the year 200B show the following data:
Variable - 9,450
Fixed - 4,725
Operating expenses
Variable - 1,470
Fixed - 2,100
There was no finished goods inventory at the beginning of the period. Neither was there any work-in-
process inventory at the beginning and end of the year.
Charlie Corporation's operating figures during the year under absorption costing were:
Answer: 5,280
2.The owners of Kelsey's Daily Mart have been looking for ways to improve sales at the store. One of the
proposals is to have a weekly raffle with a total prize of P10,000 per week. For every P50 worth of goods
purchased, the customer shall receive a numbered ticket for the raffle. The variable cost to print and
distribute the tickets has been estimated at five pesos (P5.00). Promotions and other fixed costs in
connection with the raffle, likewise, have been estimated at P15,000 per week. The current weekly
operating results of Kelsey are given below:
Sales - P1,000,000
Question: What is the sales revenue required to break-even with the raffle?
Answer: 725,000
3. Garcia Corporation has the following budget estimate for the year 2020:
Sales - P2,800,000
Answer: 1,820,000
4. The following is a summarized income statement of Carr Company's profit center No. 20 for March of
2019:
Period expenses:
What amount is most likely subject to the control of the profit of center's manager for the period?
Answer:70,000
5. The Sampaguita Steam Laundry bought a laundry truck that can be used for 5 years. The cost of the
truck is P225,000 with a salvage value of P35,000. Since the truck is not working efficiently,
management has thought of selling the truck immediately and buy a delivery wagon which will serve the
company’s purposes more properly. The estimated net returns of the truck for 5 years is P150,000. If
the truck is sold, management can only recover P175,000. (In all calculations, use the straight line
method of depreciation)
If the firm decides to keep the truck, the net gain (loss) over the 5-year period is: (If the your answer is a
loss, please put (-) before the numerical figure)
Answer: -40,000
6. Efren Corporation uses Part BIX in the assembly of a major product line. The cost to produce one BIX
is presented below:
Overhead - 48,000
Materials handling which is not included in manufacturing overhead represents the direct variable costs
of the receiving department that are applied to direct materials and purchased component on the basis
of their cost. The company's annual overhead budget is one-third variable and two-third fixed. Ten units
of BIX are expected to be required for one month. Zim Company offers to supply BIX at a unit prcie of
P60,000.
If product BIX is purchased from Zim, the released facilities would be used to product product CZX and
generate a profit of P208,000.
The net opportunity cost of the better alternative, make or buy is:
Answer: 16,000
7. The folk Company is planning to purchase a new machine, which it will depreciate on a straight-line
basis over a ten-year period with no salvage value and a full year's depreciation in the year of
acquisition. The new machine is expected to produce cash flow from operations, net of income taxes, of
P66,000 a year in each of the next ten years. The accounting (book value) rate of return on the initial
investment is expected to be at 12%. How much will the new machine cost?
Answer:300,000
8. Boy Casual Wear has P75,000 in a bank as of December 31, 2017. If the company plans on depositing
P4,000 in the account at the end of each of the next three years (2018, 2019 and 2020) and all amounts
in the account balance earn 8% per year, what will the account balance be at December 31, 2020?
Ignore the effect of income taxes.
1 1.08 1.00
2 1.17 2.08
3 1.26 3.25
4 1.36 4.51
Answer: 107,500