Compute the Revenue Effect- Growth Component, indicate if favorable/(unfavorable).
Compute the Revenue Effect- Growth Component, indicate if favorable/(unfavorable).
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).
![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
12, 000
9, 504
8, 976
5, 000
P 14, 520
Direct labor
10, 000
Factory overhead
5, 000
Gross Profit
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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4782d87e-c1bb-4cb5-80a0-ecba64a82f82%2F99462cc2-908c-468e-90e8-75cd8a741caa%2F9jc29t_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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
12, 000
9, 504
8, 976
5, 000
P 14, 520
Direct labor
10, 000
Factory overhead
5, 000
Gross Profit
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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