Assume the following data for the month of May for Diwata Company which produces a necessity...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Assume the following data for the month of May for Diwata Company which produces a necessity product which sells at P18 per unit. Normal capacity is 5,000 units per month Variable Costs/unit Fixed Costs/annum Prime Costs Fixed overhead Variable overhead Fixed expenses Variable Expenses P5.00 P312,000 3.20 48,000 1.80 In the coming month, only 2,000 units are expected to be sold. If the company will close the business next month, fixed overhead for the period will be reduced to 10,000 but the fixed expenses will be the same. Additional costs of P1,000 will be incurred when operations resume. 6. Should the company continue or shutdown its operation for next month? Why? 7. What is the shutdown point (units) for one month? KC Company operating at 80% capacity is selling 25,000 units of its product at a price of P36 per unit. The following are the costs per unit at normal capacity: Prime Costs Manufacturing overhead (including fixed of P5) Variable Selling Expenses Administrative expense (all fixed) A special order for 8,000 units is received at a price of P22. No Selling expenses will be incurred for this special order. P15.80 9.00 2.20 1.25 5. Should the company accept the special order? Why? Assume the following data for the month of May for Diwata Company which produces a necessity product which sells at P18 per unit. Normal capacity is 5,000 units per month Variable Costs/unit Fixed Costs/annum Prime Costs Fixed overhead Variable overhead Fixed expenses Variable Expenses P5.00 P312,000 3.20 48,000 1.80 In the coming month, only 2,000 units are expected to be sold. If the company will close the business next month, fixed overhead for the period will be reduced to 10,000 but the fixed expenses will be the same. Additional costs of P1,000 will be incurred when operations resume. 6. Should the company continue or shutdown its operation for next month? Why? 7. What is the shutdown point (units) for one month? KC Company operating at 80% capacity is selling 25,000 units of its product at a price of P36 per unit. The following are the costs per unit at normal capacity: Prime Costs Manufacturing overhead (including fixed of P5) Variable Selling Expenses Administrative expense (all fixed) A special order for 8,000 units is received at a price of P22. No Selling expenses will be incurred for this special order. P15.80 9.00 2.20 1.25 5. Should the company accept the special order? Why?
Expert Answer:
Answer rating: 100% (QA)
1 Diwata Company Decision To determine whether Diwata Company should continue or shutdown its operation for the next month we need to compare the costs incurred in both scenarios a Continue Operation ... View the full answer
Related Book For
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Posted Date:
Students also viewed these accounting questions
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Cuddly Co., a domestic corporation, manufactures and sells stuffed animals. The Companys manufacturing locations are primarily in the southeast. Its home office is located in Camelot, South Carolina....
-
The Savannah Shirt Company makes two types of T-shirts: basic and custom. Basic shirts are plain shirts without any screen printing on them. Custom shirts are created using the basic shirts and then...
-
Returning to the data set canadaemplmntdata from Problem 17.4, get a line chart of Accommodation jobs by subsetting by VECTOR = v81682. Problem 17.4 The file canadaemplmntdata contains quarterly...
-
Below are the returns of Nulook Cosmetics and "the market" over a three-year period: Nulook finances internally using only retained earnings, and it uses the Capital Asset Pricing Model with a...
-
Simplify each exponential expression in Exercises 2364. 24xy 32xy ,-9
-
What type of information does a mutual fund quotation provide to help you evaluate a fund?
-
Rojas Corporations comparative balance sheets are presented below. Additional information: 1. Net income was $22,630. Dividends declared and paid were $19,500. 2. All other changes in noncurrent...
-
A separate paid-in capital account is used to record each of the following except the issuance of 1 stated value stock. 2 treasury stock above cost. 3 no-par stock. 4 par value stock.
-
Janice Morgan, age 24, is single and has no dependents. She is a freelance writer. In January 2021, Janice opened her own office located at 2751 Waldham Road, Pleasant Hill, NM 88135. She called her...
-
Using the following data a multiple regression model should be designed. All the required factors should be computed, analyzed, and interpreted: Coefficient of Determination Standard Error of...
-
Affirmative action programs include collection and analysis of data on the race and sex of all applicants for employment, and a nondiscrimination statement in personnel policy and procedure manuals...
-
Arbitration procedures begin when a union files a demand for arbitration either with the employer or with the arbitration agency named in the contract. The arbitrators decision is binding on both...
-
(a) Errors should be detected by auditors more easily than frauds. Discuss. (b) Discuss the reasons why you believe the audit profession is unwilling to take greater responsibility for the detection...
-
An injunction is an order by a court that instructs that a certain act be performed or not performed.
-
Labor rights include the right to organize and bargain collectively, solicit and distribute union information, picket, and strike.
-
Data: So = 108; X=120; 1+r=1.1. The two possibilities for ST are 130 and 90. Required: a. The range of S is 40 while that of P is 30 across the two states. What is the hedge ratio of the put? b. Form...
-
Given find the value of k. es 1 e kx dx = 1 4'
-
Victorian Windows is a small company that builds specialty wooden windows for local builders. For years the company assigned overhead costs to products based on direct labor-hours (DLHs). However,...
-
Weierman Department Store is located in the downtown area of a medium-sized city in the American Midwest. While the store had been profitable for many years, it is facing increasing competition from...
-
Topper Sports, Inc., produces high-quality sports equipment. The companys Racket Division manufactures three tennis racketsthe Standard, the Deluxe, and the Prothat are widely used in amateur play....
-
What roles are played by the CICA, the CGAAC, and the SMAC for their members?
-
The following questions deal with audits by public accounting firms. Select the best response for each question. a. Which of the following best describes why an independent auditor is asked to...
-
Explain what is meant by determining the degree of correspondence between information and established criteria. What are the information and established criteria for the audit of Jones Ltd.'s tax...
Study smarter with the SolutionInn App