Elegant, Inc., has P125,000 of inventory that suffered minor smoke damage from a fire in the warehouse. The company can sell the goods "as is" for P45,000; alternatively, the goods can be cleaned and shipped to the firm's outlet center at a cost of P23,000.There the goods could be sold for P80,000.What alternative is more desirable and what is the relevant cost for that alternative?

a. Clean and ship to outlet center, P148,000

b. Clean and ship to outlet center, P103,000

c. Sell "as is," P125,000

d. Clean and ship to outlet center, P23,000

The following information pertains to the Duffy Company's three products:

Unit sales per month

A 500

B 800

C 500

Selling price per unit

A P3.00

B P3.75

C P3.00

Variable price per unit

A 1.20

B 3.00

C 3.30

Unit contribution margin

A P1.80

B P0.75

C P(0.30)

Contribution margin ratio

A 60%

B 25%

C (10)%

Assume that product C is discontinued and the extra space is devoted to the production of A. Product A production is increased to 800 units per month, but A's selling price on all units of A is reduced to P2.80. Assuming everything else remains the same as the original data, monthly profits will

A. increase by P390

B. increase by P530

C. decrease by P380

D. decrease by P540

E. increase by P680