14. PQR Company expects to incur the following costs at the planned production level of 10,000 units: Direct materials Direct labor Variable overhead Fixed overhead The selling price is P50 per unit. The company currently operates at full capacity of 10,000 units. Capacity can be increased to 13,000 units by operating overtime. Variable costs increase by P14 per unit for overtime production. Fixed overhead costs remain unchanged when overtime operations occur. PQR Company has received a special order from a wholesaler who has offered to buy 2,000 units at P45 each. P100,000 120,000 60,000 30,000 What is the incremental cost associated with this special order? d. P42,000 a. P84,000 b. P31,000 c. P62,000

Q: What is the purpose of EDI?

A: Transparency in electronic data exchange: Expanding EDI enables suppliers to get access to a buyer's…

Q: Important Factors to Consider When Building a TCO Model Example of a TCO Model?

A: TCO model or Total Cost Ownership Model is an model used to estimate the cost of product or a…

Q: Define value chain.

A: Value Chain: Value Chain is the combination of activities including all the costs to do such…

Q: Explain Matching Principles?

A: Matching concept is an accounting principle which explains the need to match revenue with the…

Q: Explain NAREIT Index?

A: NAREIT Index Rate: It implies the compound dividend yield which is communicated as far as a yearly…

Q: Describe about the intuitive approach?

A: Supervisors regularly depend on models and intuition to make fast decisions. Intuitive decision…

Q: What is Monte Carlo simulation analysis?

A: Answer: Monte Carlo simulation is the methodology used to consider the financial, cost, and project…

Q: What would be the equasion for solving this

A: Formula for calculating yearly payment: Yearly payment=(Loan amount * Rate%)1-1(1+Rate%)n

Q: Explain red herring

A: Red herring It is an introductory prospectus recorded with the Securities and Exchange Commission…

Q: Define net realization value?

A: Net realizable value means the amount that could be received after deducted all incidental expenses…

Q: Explain the benefits of JIT.

A: Just-in-time manufacturing system: Just-in-time (JIT) manufacturing system is an approach to…

Q: What is the concept behind the EOQ model?

A: Economic Order Quantity (EOQ) Model: It is a method of inventory costing that aims to identify the…

Q: Define value drivers

A: Introduction: Value drivers are related to concept of free cash flow valuation model. This helps the…

Q: Explain put option

A: Introduction: This question is related to the concept of financial derivatives. Derivative…

Q: What is the full form of ERP? Explain ERP with examples?

A: ERP means Enterprise Resource Planning, it is a process management software used by organizations to…

Q: Can you explain DCF model?

A: Introduction Discounted cash flows: DCF is abbreviated as discounted cash flows. The concept of…

Q: how to learn CAPM model?

A: In order to increase the return and reduce the risk, investors generally adding some securities to…

Q: Define embedded options

A: Embedded options are considered to be very much beneficial for both individuals as investors &…

Q: Explain Replacement-Analysis Fundamentals?

A: Replacement-analysis fundamentalUnder this, the decision regarding the replacement of obsolete as…

Q: Define scenario analysis

A: Scenario means a situation or circumstance which is influenced by various factors. Various if and…

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance. 

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.