1. Company X produces product X. The company incurred the following costs in manufacturing and selling the product for the year 2013: Variable manufacturing cost of P 120,000 Fixed manufacturing cost of P 80,000 Selling expense of P 3.00 per unit Administrative expense of P 100,000 Selling price per unit of P 10.00 Units produced is 80,000 units Ending inventory under absorption costing is P 12,500 Ending inventory under variable costing is P 7,500 There is no beginning inventories Net income under variable costing is P 232,500 Compute the gross profit under absorption costing?

a. 562,500

b. 456,500

c. 232,500

d. None of the above

e. 482,500

2. British Columbia Corp manufactures several lines of skiing equipment. Its Canada plant makes a single model, the GENOCIDE-25 ski. The following data are available for 2013: Sales is 37,000 units at P 70 per unit; production is 39,000 units; Standard manufacturing variable cost is P 15 per unit; standard fixed overhead cost is P 25 per unit. The selling and administrative expenses are as follows: Fixed cost totaled P 600,000 and variable cost per unit is P 8.00. British Columbia use normal activity and budgeted fixed cost of P 2,000,000. Fifty percent of the budgeted fixed cost pertains to manufacturing cost and this is used to set its standard manufacturing fixed cost per unit. There were no beginning inventories.

Based on the given data, compute the net income using the standard variable costing.

a. 139,000

b. 126,000

c. 142,000

d. 148,000

e. None of the above