Chapter 10
Chapter 10
Chapter 10
P30
3
5
4
42
21
P63
P63
33
P30
[Problem 3]
Unit variable production costs
Unit shipping costs
Incremental fixed costs (P40,000/10,000)
Minimum price/breakeven price
P3.00
0.75
4.00
P7.75
[Problem 4]
Markup ratios on:
1.
Absorption Costs = P3 + P2+ P30 = 102.94%
P34
Unit Profit Margin = P6,000,000 x 15% = P30
30,000 units
2.
3.
4.
5.
[Problem 5]
1.
295%
2.
3.
P12
3
6
[Problem 6]
1. Technicians wages (P600,000/20,000 hrs) P30.00/hr
Other repair costs (P200,000/20,000 hrs)
10.00/hr
Ordering, handling, etc.
15.56/hr
Standard time and material loading charge P 55.56/hr
Ordering, handling,etc rate =
100
140
P40
- 20%
= P15.56
140%
- P40
Economy
P50,000
( 12,000)
( 5,000)
P33,000
66%
Standard
P80,000
( 16,000)
( 8,000)
P56,000
70%
Deluxe
P70,000
( 20,000)
( 7,000)
P43,000
61.43%
P17,200
44,800
(6,600)
55,400
5,500
(22,200)
P38,900
[Problem 8]
Recommended sales price = ?
Change in USP
(25%)
(10%)
10%
25%
(750,000)
(285,000)
225,000
525,000
Change in quantity
( Qty x P 15)
450,000
300,000
(300,000)
(450,000)
(90,000)
(50,000)
(150,000)
(250,000)
(390,000) P
(35,000)
(225,000)
(175,000)
The recommended unit sales price in 2003 is still P 15. All of the possible
changes in prices and volume result to reduction in operating income.
[Problem 9]
1.a. Difference in profit (P 18,000 P 15,000)
b. Direct materials
Direct labor
Minimum sales price
P 3,000
P 5,000
8,000
P 13,000
(11.25) P
(13.50) P
15.00 P
16.50 P
18.75
30,000
20,000
20,000
30,000
(337,500)
(270,000)
270,000
337,500
(90,000)
(50,000)
50,000
250,000
P (247,500)
P(220,000)
0 P270,000
P87,500
Increase (decrease)
In unit sales
Increase (decrease)
in sales
Increase (decrease)
In advertising and
promo expenditures
Increase (decrease)
In profit
USP =
USP =
=
=
=
1 (10% x 2.4/4.8)
[Problem 10]
1. a. Unit sales price using return-on-capital employed pricing:
Total cost = 12,000 units x P 14
= P 168,000
Ret. on sales = P 480,000/4,800,000 = 10%
CA/Sales ratio = P 2.4M/P4.8M
= 50%
USP =
=
=
=
= P 24,000 F
= 40,000 F P 64,000 F
= 32,000 F
= 48,000 F
80,000 F P144,000 F
=
=
36,000 UF
40,000 UF 76,000UF
=
=
24,000 UF
36,000 UF 60,000UF 136,000UF
P 8,000 F
P (4,000) UF
24,000 F
P 20,000 F
[Problem 12]
1. Handy Home Products Company
Gross Profit Variation Analysis
For the year ended December 31, 2003
Sales price variances:
Hand drill [(P 59 P 60) x 86,000 units]
Table saw [(P 115 P 120) x 74,000 units]
P (86,000) UF
(370,000) UF P (456,000) UF
0
148,000 UF
148,000 UF
=
=
=
=
( 28.45) F
1,115.20 UF
( 440.40) F
475.20 UF
1,121.55 UF
=
=
=
=
823.88 UF
(1310.64) F
68.00 UF
480.00 UF
( 61.24)UF
=
=
=
=
507.00 UF
(1,118.00) F
68.00 UF
364.84 UF
(178.20) F
P 220.01 UF
[Problem 14]
1. Sales this year at USP last year
(P 5 million x 120%)
Less: Sales last year
Sales quantity variance
P 2,989.44
2,717.15
2,717.15
2,750.00
P 272.29 F
(32.85) UF
P 239.44 F
P6,000,000
5,000,000
P1,000,000 F
2.
3.
[Problem 15]
1. Cost this year
Less: Cost this year at UC last year
(P 6,600,000 110%)
Cost price variance
2.
P 4,500,000
6,000,000
P1,500,000) UF
P6,600,000
6,000,000
P 600,000 F
3.
[Problem 16]
1. Sales this year
Less: STY at USP last year (P8,000,000 x 105%)
Sales price variance
SPV rate = P3,600,00 F = 4.29% F
8,400,000
9.09% increase
P12,000,000
8,400,000
P 3,600,000 F
P8,400,000
8,000,000
P 400,000 F
P8,000,000
4.
P6,300,000
6,000,000
P 300,000 UF
6,300,000
P1,700,000 UF