afferential Cost Analysis Direct material Direct labor Variable overhead P450,000/150,000 units) Fixed overhead Per Unit P2.00 acable marketing costs keting and administrative cost Fixed marketin (P210,000/150,000 unit 2.00 1.50 3.00 1.05 Total e firm's operating income before income taxes if the firm produ 1.40 19.95 Required: Compute the 000 units in 2017. 110,000 unit For 2018, the fir the firm produced and sold s as it sold in 2017. However, in a to a state government. There are no contract. 7 cost plus P0.22 the contract, wh c Assume that e firm expects to sell the same number of units as it sold in 2017. aper, the firm noticed an invitation to lid on selling X to a state Forde newspaper, the firm noticed same number of ho marketing costs associated with the order if the company is aw mpany wishes to prepare a bid for 40,000 units at le order if the company is awarded the P0.25 per unit. How much should it bi a for 40,000 units at its full manufacturing ct, what would be its effect on operatie ud it bid? If the company is successful at getting that the company is awarded the contract on lanuary 2 2018, and in addition order from a foreign vendor for 40,000 units at the regular price of 10 shipment will require the firm to incur its normal market it contract contains a 10-day escape clause (i.e., the firm can reje o days without any penalty). If the firm accepts the government contract, o 116 times the straight time rate will be paid on the 40.000 units. In addition, ad will increase by '60,000 and variable overhead will behave in its normal pattern pany has the capacity to produce both orders. Decide the following: 1. Should the firm accept the foreign offer? Show the effect on operating income receives an order foreign shipment will re 2018, and in addition it also at the regular price of P15 per unit. government co within 10 days 1.e, the firm can reject the contract pts the government contract, overtime pay at 1% ti overhead will The company has 2 accepting the order. Assuming the foreign order is accepted, should the firm accept the governmen order? Show the effect on operating income of accepting the government order 8.19 Esther Goldman is an attorney employed by a large law firm at P95,000 per year. She is ring whether to become a sole practitioner, which would probably generate annually in operating revenues and P220,000 in operating expenses. considering whether P325,000 in operating Required: 1. Present two tabulations of the annual income effects of these alternatives. The second tabulation should include the opportunity cost of Goldman's compensation as an employee. 2. Suppose Goldman prefers less risk and chooses to stay as an employee. Show a tabulation of the income effects of rejecting the opportunity of independent practice. 8.20 Three years ago the Broadway Dairy Queen bought a frozen yogurt machine for P8,000 A salesman has just suggested to the Broadway manager that she replace the machine with a new, P10,000 machine. The manager has gathered the following data: su iskunt u vuy utc comporti aru ue lular UNITICI 8.18 The Jones Company normally produces 150,000 units of X per year. Due to an economic downturn, the company has some idle capacity. Product X sells for P15 per unit, The firm's production, marketing, and administration costs at its normal capacity are