10-52 pls explain and solve 52. A Company manufactures a product that is sold for P37.95. It uses absorption costsystem. Plant capacity is 750,000 units annually, but normal volume is 500,00 units. Costs at normal are given below.Unit CostP 9.804.5012.00Total CostP 4,900,0002,250,0006,000,000Direct materialsDirect laborManufacturing overheadSelling and administrative:VariableFixedTotal cost2.504.20P33.001,250,0002.100,000P16.500.000Fixed manufacturing overhead is budgeted at P4,500,000.A customer has offered topurchase 100,000 units at P25,000 each to be packaged in large cartons, not the normalindividual containers. It will pick up the units in its own trucks. Thus variable selling andadministrative expenses will decrease by 60%. The company should compare the totalrevenue to be derived from this order with the total relevant costs of:a. P1,830,000b. P1,880,000P2,930,000d. P3,150,000C.(cia)

Here question related with the calculation of total relevant cost which are incurred in the special…

4.20 P33.00 1,250,000 2.100,000 P16.500.000 Fixed Total cost Fixed manufacturing overhead is budgeted at P4,500,000.A customer has offered to purchase 100,000 units at P25,000 each to be packaged in large cartons, not the normal individual containers. It will pick up the units in its own trucks. Thus variable selling and administrative expenses will decrease by 60%. The company should compare the total revenue to be derived from this order with the total relevant costs of: a. P1,830,000 b. P1,880,000 P2,930,000 d. P3,150,000 C. (cia)

4.20 P33.00 1,250,000 2.100,000 P16.500.000 Fixed Total cost Fixed manufacturing overhead is budgeted at P4,500,000.A customer has offered to purchase 100,000 units at P25,000 each to be packaged in large cartons, not the normal individual containers. It will pick up the units in its own trucks. Thus variable selling and administrative expenses will decrease by 60%. The company should compare the total revenue to be derived from this order with the total relevant costs of: a. P1,830,000 b. P1,880,000 P2,930,000 d. P3,150,000 C. (cia)

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 2CMA

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