Assuming that this special offer will not affect the regular market for the product, should the company accept the special offer? No, since it will mean a loss of P1.16 million Yes, since it will contribute P1.8 million margin Yes, since it will contribute P2.8 million margin
Assuming that this special offer will not affect the regular market for the product, should the company accept the special offer? No, since it will mean a loss of P1.16 million Yes, since it will contribute P1.8 million margin Yes, since it will contribute P2.8 million margin
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Roger Corp.
![Roger Corp., which has experienced excess production capacity, received a special
offer for its product B at P78 per unit for 100,000 units. It has been using the variable
costing method and has been pricing its product at P96 per unit based on a mark-up of
60% as follows:
Direct materials
P30
Direct labor
P20
Variable overhead
P6
Variable selling & administrative
P4
Total variable expenses
P60
60% mark-up
P36
Selling price
P96
Assuming that this special offer will not affect the regular market for the product,
should the company accept the special offer?
No, since it will mean a loss of P1.16 million
Yes, since it will contribute P1.8 million margin
Yes, since it will contribute P2.8 million margin
O No, since it will mean a loss of P1.8 million](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Facb9658b-7b91-43ea-9f1d-832c92b61562%2Fdb3f9416-83c7-48ae-9e6c-c0179cf43d08%2Frecyuo_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Roger Corp., which has experienced excess production capacity, received a special
offer for its product B at P78 per unit for 100,000 units. It has been using the variable
costing method and has been pricing its product at P96 per unit based on a mark-up of
60% as follows:
Direct materials
P30
Direct labor
P20
Variable overhead
P6
Variable selling & administrative
P4
Total variable expenses
P60
60% mark-up
P36
Selling price
P96
Assuming that this special offer will not affect the regular market for the product,
should the company accept the special offer?
No, since it will mean a loss of P1.16 million
Yes, since it will contribute P1.8 million margin
Yes, since it will contribute P2.8 million margin
O No, since it will mean a loss of P1.8 million
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