+ 21. Lakas Engine Co. manufactures engines for the military equipment on acost-plus basis. The cost of a particuļar machine the companymanufactures is shown below:Direct MaterialsDirect LaborOverhead:P 400,000300,000Supervisor's salaryFringe benefit on direct laborDepreciationRent40,00030,00024,00022,000If the production of this engine were discontinued the production capacitywould be idle, and the supervisor will be laid-off should there be a nextcontract for this engine, the company should bid a minimum price ofb. P 700,000c. P 730,000d. P 770,000а. Р816,00022. Chow Inc. has its own cafeteria with the foilowing annual costs:P 400,000300,000440,000FoodLaborOverheadThe overhead is 40% fixed. At the fixed overhead, P 100,000 is the salaryof the cafeteria supervisor. The remainder of the fixed overhead has beenallocated from total company overhead. Assuming the cafeteriasupervisor will remain and that Chow will continue to pay said salary, themaximum cost Chow will be will to pay an outsider firm to service thecafeteria isb. P 1,040,000 c. P 700,000d. P 964,000a. P 1,140,00023. Jerry Company budgeted sales of 400,000 plastic guns at P40 per unitfor 2012. Variable manufacturing costs were budgeted at P16 per unit,and fixed manufacturing costs at P10 per unit. A special order offeringto buy 40,000 plastic guns for P23 each was received by Jerry in March2012. Jerry has, sufficient plant capacity to manufacture the additionalquantity; however, the production would have to be done on an overtimebasis at an estimated additional cost of P3 per plastic guns. Acceptanceof the special order would not affect Jerry's normal sales and no sellingexpenses would be incurred.19Scanned with CamScannerWhat would be the effect on operating profit if the special order wèreассepted?a. P 240,000 decreaseb.. P 160,000 increase24. Chow foods operate a cafeteria for its employees. The operations of thecafeteria require fixed costs of P 470,000 per month and variable costsof 40% of sales. Cafeteria sales are currently averaging P 1,200,000 permonth. The company has the opportunity to replace the cafeteria withvending machines. Gross customer spending at the vending machine isestimated to be 40% greater than the current sales because the machineis available all hours. By replacing the cafeteria with vending machines,the company would receive 16% of the gross customer spending andavoid all cafeteria costs. A decision to replace the cafeteria with vendingmachines will result in a monthly increase/(decrease) in operatingincome ofc. P 120,000 decreased. P 280,000 increaseа. Р 182,000b. P 258,800c. P (588,000) d. P 18,80020 .000 unito

Name: + 21. Lakas Engine Co. manufactures engines for the military equipmen
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Description: + 21. Lakas Engine Co. manufactures engines for the military equipment on acost-plus basis. The cost of a particuļar machine the companymanufactures is shown below:Direct MaterialsDirect LaborOverhead:P 400,000300,000Supervisor's salaryFringe benefi

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+21. Lakas Engine Co. manufactures engines for the military equipment on a cost-plus basis. The cost of a particuļar machine the company manufactures is shown below: Direct Materials Direct Labor Overhead: P 400,000 300,000 Supervisor's salary Fringe benefit on direct labor Depreciation Rent 40,000 30,000 24,000 22,000 If the production of this engine were discontinued the production capacity would be idle, and the supervisor will be laid-off should there be a next contract for this engine, the company should bid a minimum price of a. P 816,000 c. P 730,000 ith the foilowing appual costs: d. P 770,000 b. P 700,000

+21. Lakas Engine Co. manufactures engines for the military equipment on a cost-plus basis. The cost of a particuļar machine the company manufactures is shown below: Direct Materials Direct Labor Overhead: P 400,000 300,000 Supervisor's salary Fringe benefit on direct labor Depreciation Rent 40,000 30,000 24,000 22,000 If the production of this engine were discontinued the production capacity would be idle, and the supervisor will be laid-off should there be a next contract for this engine, the company should bid a minimum price of a. P 816,000 c. P 730,000 ith the foilowing appual costs: d. P 770,000 b. P 700,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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