1.Khuha Hito, Inc., expects to sell 6,000 ceramic vases for P40 each. Direct materials costs are P4, direct manufacturing labor is P20, and manufacturing overhead is P6 per vase. The following inventory levels apply to 2011:

Beginning inventory Ending inventory

Direct materials 1,000 units 1,000 units

Work-in-process inventory 0 units 0 units

Finished goods inventory 400 units 500 units

1.1 On the 2012 budgeted income statement, what amount will be reported for sales?

A) P244,000

B) P236,000

C) P280,000

D) P240,000

1.2 How many ceramic vases need to be produced in 2012?

A) 5,900 vases

B) 6,100 vases

C) 7,000 vases

D) 6,000 vases

1.3 On the 2012 budgeted income statement, what amount will be reported for cost of goods sold?

A) P183,000

B) P210,000

C) P180,000

D) P177,000

1.4 What are the 2012 budgeted costs for direct materials, direct manufacturing labor, and manufacturing overhead, respectively?

A) P24,400; P122,000; P36,600

B) P24,000; P120,000; P36,000

C) P4,000; P20,000; P6,000

D) P4,000; P0; P9,000

2.Answer the following questions using the information below:

Shathiaga Company provides the following data for next year:

Month Budgeted Sales

January P120,000

February 108,000

March 132,000

April 144,000

The gross profit rate is 40% of sales. Inventory at the end of December is P21,600 and target ending inventory levels are 30% of next month's sales, stated at cost.

2.1 Purchases budgeted for January total:

A) P130,800

B) P72,000

C) P69,840

D) P74,160

2.2 Purchases budgeted for February total:

A) P69,120

B) P60,480

C) P115,200

D) P64,800