SCM

1. Toyota's Laguna Division is currently purchasing a part from an outside supplier. The company's Quezon Division, which has excess capacity, makes and sells this part for external customers at a variable cost of P22 and a selling price of P34. If Quezon begins sales to Laguna, it (1) will use the general transfer-pricing rule and (2) will be able to reduce variable cost on internal transfers by P4. If sales to outsiders will not be affected, Quezon would establish a transfer price of:

P18.

P22.

P30.

P34.

None of the above

2. Poodle Company manufactures two products, Mini A and Maxi B. Poodle's overhead costs consist of setting up machines, P800,000; machining P1,800,000; and inspecting, P600,000. Information on the two products is:

Poodle Company manufactures two products, Mini A and Maxi B. Poodle's overhead cosls consist of setting up machines, P303303; machining P1,B0,000; and inspecting, PEDICI,000. Information on the two products is: Mini A Maxi B Direct labor hours 15,000 25,000 Machine setups I500 400 Machine hours 24,000 20,000 Inspections 300 2'00 Overhead applied to Mini A using activitybased costing is _