A.

M Department Store has 5 departments- MI, M2, M3, M4, and M5. Department M5 is being evaluated using the data below for the store. All Others Dept, M5 Total Sales P4,500,000 P500,000 P5,000,000 Cost of Sales 2,200,000 300,000 2,500,000 Gross Profit P2,300,000 P200,000 P2,500,000 Rent and services P800,000 P200,000 P1,000,000 Direct salaries 450,000 50,000 500,000 Advertising allocation 450,000 50,000 500,000 Total expenses P1,700,000 P300,000 P2,000,000 Net income P600,000 P(100,000) P500,000 Rent and services is a corporate committed fixed expense and is allocated evenly to the five departments. Advertising will not change regardless of the decision, and is allocated using sales revenue. M Department Store is evaluating Department M5's future. REQUIRED: 1. Comment on the following statements about Department M5: a. It is earning P100,000 in variable CM for M Department Store. b. It is earning P150,000 in direct CM for M Department Store. c. It is a P100,000 drain on the profitability of M Department Store. d. The company's overall profitability without Department M5 would be P600,000.The manager of Q Corporation is recommending the closure of Branch B in order to eliminate its net loss of P33,750. The income statement shows: Home Branch Branch Office A B Sales P800,000 P300,000 P500,000 Cost of sales P400,000 P120,000 P250,000 Operating expenses directly related to sales 80,000 30,000 80,000 Operating expenses indirectly related to sales 90,000 20,000 110,000 General & administrative expenses allocated 150,000 56,250 93,750 Total costs & expenses P720,000 P226,250 P533,750 Operating income P80,000 P73,750 P(33,750) If Branch B is closed, one personnel (with salary of P30,000) have to be transferred to the home office. Branch B has furniture costing P120,000 and with an estimated useful life of 5 years has to be transferred also to the home office. REQUIRED: 1. Do you agree with the manager? Explain.Number the following procedures based on the sequence followed in the departmentalization of factory overhead. In case the procedure is not a part of the departmentalization process, write NA (not applicable).A. Debit factory overhead charges to Factory Overhead Control. B. Conduct a factory survey at the beginning of the period. C. Record actual factory overhead D. Record actual direct departmental expenses in "standing orders". E. Distribute service department expenses. F. Compute for applied factory overhead. G. Distribute actual indirect departmental expenses. H. Estimate direct departmental expenses. I. Estimate indirect departmental expenses. J. Compute for departmental overhead rates. K. Credit Applied Factory Overhead for completed jobs L. Compute for departmental overhead variances. M. Distribute indirect departmental expenses. N. Distribute actual service department expenses. O. Conduct a factory survey at the end of the period. P. Analyze departinental overhead variances