ellow Company has the capacity to manufacture 20,000 units per month. However, present plans call for monthly production and sales of 15,000 units at P21.00 each. Costs per unit are as follows: Direct materials P7.00 Direct labor 4.20 Variable factory overhead Fixed factory overhead Variable marketing expenses Fixed administrative expenses 1.05 2.10 0.35 140 P16.10 Total Assume that Yellow Company accepted a special order of 5,000 units at P15.00 per unit, the decrease or increase in contribution margin shall amount to a. P5,500 decrease b. P12,000 decrease c. P12,000 increase d. P13,750 increase e. None of these; answer is _ 8. Refer to no. 7. The unit cost figure the company would use in costing inventory using direct costing is a PI2.25 b. P12.60 c. P14.70 d. P16.10 e. None of these; answer is

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter5: Process Costing
Section: Chapter Questions
Problem 1PA: The following product Costs are available for Haworth Company on the production of chairs: direct...
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7. The Yellow Company has the capacity to manufacture 20,000 units per month. However, present
plans call for monthly production and sales of 15,000 units at P21.00 each. Costs per unit are as follows:
Direct materials
P7.00
Direct labor
4.20
Variable factory overhead
Fixed factory overhead
Variable marketing expenses
Fixed administrative expenses
1.05
2.10
0.35
140
P16.10
Total
Assume that Yellow Company accepted a special order of 5,000 units at PI5.00 per unit, the decrease or
increase in contribution margin shall amount to
a. P5,500 decrease
b. P12,000 decrease
c. P12,000 increase
d. P13,750 increase
e. None of these; answer is
8. Refer to no. 7. The unit cost figure the company would use in costing inventory using direct costing
is
a P12.25
b. P12.60
c. P14.70
d. P16.10
e. None of these; answer is
Transcribed Image Text:7. The Yellow Company has the capacity to manufacture 20,000 units per month. However, present plans call for monthly production and sales of 15,000 units at P21.00 each. Costs per unit are as follows: Direct materials P7.00 Direct labor 4.20 Variable factory overhead Fixed factory overhead Variable marketing expenses Fixed administrative expenses 1.05 2.10 0.35 140 P16.10 Total Assume that Yellow Company accepted a special order of 5,000 units at PI5.00 per unit, the decrease or increase in contribution margin shall amount to a. P5,500 decrease b. P12,000 decrease c. P12,000 increase d. P13,750 increase e. None of these; answer is 8. Refer to no. 7. The unit cost figure the company would use in costing inventory using direct costing is a P12.25 b. P12.60 c. P14.70 d. P16.10 e. None of these; answer is
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