1. a. Company that has a negative margin of safety necessarily operates at a loss. b. If the tax rate increases, then the break even point also increases.

True True

False False

True False

False True

2. BAUTISTA Company has fixed cost of P 100,000 and breakeven sales of P 800,000. What is its projected profit at P 1,200,000 sales?

50,000

100,000

120,000

Cannot be determined

3. Mith Company's direct labor costs for the month of January 2021 were as follows: Actual direct labor hours 20,000 Standard direct labor hours 21,000 Direct labor rate variance, unfavorable P 3,000 Total payroll P 126,000 What was Mith's direct labor efficiency variance?

P6,000 favorable

P6,450 favorable

P6,300 favorable

P6,150 favorable

None of the above