Question6

VV Corp. began its operations on January 1, 2020. It produces a single product that sells for P13.50 per unit. The Company uses an actual (historical) cost system. During the year, 150,000 units were produced and 135,000 units were sold. There was no work-in-process inventory at December 31, 2020.

Manufacturing costs and selling and administrative expenses for 2020 were as follows:

Fixed Costs Variable Costs

Raw Materials - P3.50 per unit produced

Direct Labor - P 2.50 per unit produced

Factory Overhead P195,000 P1.00 per unit produced

Selling and Administrative P 140,000 P1.20 per unit sold

What amount would VV's operating income be using variable costing method?

Select one:

• P702,000
• P715,500
• P380,500
• P400,000

Question7

What would VV's operating income be for 2020 under the absorption costing?

Select one:

• P702,000
• P715,000
• P380,500
• P400,000

Question8

The cost of ending inventory under the two costing methods were:

Select one:

• Absorption Costing P124,500

Variable Costing P105,000

• Absorption Costing 105,000

Variable Costing P124,500

• Absorption Costing 142,500

Variable Costing P123,000

• Absorption Costing 123,000

Variable Costing P142,500