Compute the Revenue Effect- Growth Component, indicate iffavorable/(unfavorable). *The activity driver for conversion costis the direct labor hours.PROBLEM: Financial PerspectiveGloria Corporation presents the following information for year 2020 & 202120202021SalesP 45, 000P 38, 000Production ExpensesDirect materials9, 5048, 97612,000Direct labor10,000Factory overheadGross Profit5, 000P 14, 5205, 000P 18, 000Operating Expenses13,00013, 000Operating incomeP5, 000P1, 520During the year 2020, the corporation was able to sell 10, 000 units which is 25% above the sales in2021. The same capacity was used for factory overhead and operating expenses for years 2020 and2021. Other data are as follows:20202021Raw materials used ( kg)1, 200720Direct labor hours1, 000816

Revenue refers to the amount received by the company from selling goods and services to the…

Answered: Compute the Revenue Effect- Growth…

Compute the Revenue Effect- Growth Component, indicate if favorable/(unfavorable). *The activity driver for conversion cost is the direct labor hours.

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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Question

Compute the Revenue Effect- Growth Component, indicate if
favorable/(unfavorable). *The activity driver for conversion cost
is the direct labor hours.
PROBLEM: Financial Perspective
Gloria Corporation presents the following information for year 2020 & 2021
2020
2021
Sales
P 45, 000
P 38, 000
Production Expenses
Direct materials
9, 504
8, 976
12,000
Direct labor
10,000
Factory overhead
Gross Profit
5, 000
P 14, 520
5, 000
P 18, 000
Operating Expenses
13,000
13, 000
Operating income
P5, 000
P1, 520
During the year 2020, the corporation was able to sell 10, 000 units which is 25% above the sales in
2021. The same capacity was used for factory overhead and operating expenses for years 2020 and
2021. Other data are as follows:
2020
2021
Raw materials used ( kg)
1, 200
720
Direct labor hours
1, 000
816

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