Production in units 25,000 Material costs P150,000 Direct labor costs 2,500 hours at P38.50 per hour Factory overhead P5 per swimsuit plus P50,000 per month Selling expense P2 per swimsuit plus P70,000 a month

Production in units 25,000 Material costs P150,000 Direct labor costs 2,500 hours at P38.50 per hour Factory overhead P5 per swimsuit plus P50,000 per month Selling expense P2 per swimsuit plus P70,000 a month

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 11E

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Concept explainers

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

Question

Production in units 25,000
Material costs P150,000
Direct labor costs 2,500 hours at P38.50 per
hour
Factory overhead P5 per swimsuit plus P50,000
per month
Selling expense P2 per swimsuit plus P70,000 a
month
Sold swimsuits in units 20,000
Gross profit rate 25%
The net profit before tax is:

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