Makina Company manufactures engines on a cost-plus basis. The cost of a particular machine follows: Direct materials, P400,000; Direct Labor, P300,000; Supervisor's salary, P40,000; Fringe benefits on direct labor, P30,000; Depreciation, P24,000; Rent, P22,000. If the production of the 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: O P816,000 O P700,000 O P730,000 O P770,000

Makina Company manufactures engines on a cost-plus basis. The cost of a particular machine follows: Direct materials, P400,000; Direct Labor, P300,000; Supervisor's salary, P40,000; Fringe benefits on direct labor, P30,000; Depreciation, P24,000; Rent, P22,000. If the production of the 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: O P816,000 O P700,000 O P730,000 O P770,000

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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