Problem 9. Curry Company produces and sells two distinct products, B2 and B4. Available data for the year ending December 31, 2016, follow: B2 B4 Sales volume Selling price per unit Direct materials 20,000 P180 40,000 P160 65 40 Direct labor 40 40 Variable factory overhead Fixed factory overhead Full cost per unit Gross profit per unit 16 16 25 146 25 121 P34 P39 Other information pertaining to operations during the year ending December 31, 2016, follow: I. II. Variable selling costs were 5% of sales. Fixed selling and administrative costs were P207,330 (with a capacity to handle volumes up to twice those of 2016) The present plant facilities provide a capacity of 60,000 units, this can be increased to a capacity of 100,000 units at an additional cost of P80,000. IV. The company is taxed at a rate of 40%. III. Expected changes for the year ending December 31, 2017, include the following: I. The selling price of B4 is expected to increase by 10%, but no other changes are expected in costs or selling prices for either product. The sales mix for 2017 is expected to be in the ratio of 2 units of B2 to 3 units of B4. II. Calculate the number of units of each product the company must sell to earn an after-tax net income of P135,000 for the year ending December 31, 2016.
Problem 9. Curry Company produces and sells two distinct products, B2 and B4. Available data for the year ending December 31, 2016, follow: B2 B4 Sales volume Selling price per unit Direct materials 20,000 P180 40,000 P160 65 40 Direct labor 40 40 Variable factory overhead Fixed factory overhead Full cost per unit Gross profit per unit 16 16 25 146 25 121 P34 P39 Other information pertaining to operations during the year ending December 31, 2016, follow: I. II. Variable selling costs were 5% of sales. Fixed selling and administrative costs were P207,330 (with a capacity to handle volumes up to twice those of 2016) The present plant facilities provide a capacity of 60,000 units, this can be increased to a capacity of 100,000 units at an additional cost of P80,000. IV. The company is taxed at a rate of 40%. III. Expected changes for the year ending December 31, 2017, include the following: I. The selling price of B4 is expected to increase by 10%, but no other changes are expected in costs or selling prices for either product. The sales mix for 2017 is expected to be in the ratio of 2 units of B2 to 3 units of B4. II. Calculate the number of units of each product the company must sell to earn an after-tax net income of P135,000 for the year ending December 31, 2016.
Chapter5: Process Costing
Section: Chapter Questions
Problem 2PB: The following product costs are available for Kellee Company on the production of eyeglass frames:...
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Question
Calculate the number of units of each product the company must sell to earn an after-tax net income of
P135,000 for the year ending December 31, 2016.
Transcribed Image Text:Problem 9. Curry Company produces and sells two distinct products, B2 and B4. Available data for the year
ending December 31, 2016, follow:
B2
B4
Sales volume
20,000
40,000
P160
Selling price per unit
Direct materials
P180
65
40
Direct labor
40
40
Variable factory overhead
Fixed factory overhead
Full cost per unit
Gross profit per unit
16
16
25
25
146
121
Р34
P39
Other information pertaining to operations during the year ending December 31, 2016, follow:
I.
Variable selling costs were 5% of sales.
Fixed selling and administrative costs were P207,330 (with a capacity to handle volumes up to
twice those of 2016)
The present plant facilities provide a capacity of 60,000 units, this can be increased to a capacity
of 100,000 units at an additional cost of P80,000.
The company is taxed at a rate of 40%.
II.
II
IV.
Expected changes for the year ending December 31, 2017, include the following:
I.
The selling price of B4 is expected to increase by 10%, but no other changes are expected in
costs or selling prices for either product.
The sales mix for 2017 is expected to be in the ratio of 2 units of B2 to 3 units of B4.
II.
Calculate the number of units of each product the company must sell to earn an after-tax net income of
P135,000 for the year ending December 31, 2016.
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