Compute the Revenue Effect- Growth Component, indicate if favorable/(unfavorable). *The activity driver for conversion cost is the direct labor hours.Compute the Cost Effect- Price Recovery Component indicate if favorable/(unfavorable). *The activity driver for conversion cost is the direct labor hours. PROBLEM: Financial PerspectiveGloria Corporation presents the following information for year 2020 & 202120202021SalesP 45, 000P 38, 000Production ExpensesDirect materials12, 0009, 5048, 9765, 000P 14, 520Direct labor10, 000Factory overhead5, 000Gross ProfitP 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 is the amount generated by the company in the course of normal operation within the…

PROBLEM: Financial Perspective Gloria Corporation presents the following information for year 2020 & 2021 2021 P 38, 000 2020 P 45, 000 Sales Production Expenses Direct materials 12,000 9, 504 Direct labor 10,000 8, 976 Factory overhead 5, 000 5, 000 Gross Profit P 18, 000 P 14, 520 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 720 Raw materials used ( kg ) 1, 200 Direct labor hours 1, 000 816

PROBLEM: Financial Perspective Gloria Corporation presents the following information for year 2020 & 2021 2021 P 38, 000 2020 P 45, 000 Sales Production Expenses Direct materials 12,000 9, 504 Direct labor 10,000 8, 976 Factory overhead 5, 000 5, 000 Gross Profit P 18, 000 P 14, 520 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 720 Raw materials used ( kg ) 1, 200 Direct labor hours 1, 000 816

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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Variable costs are costs that: a) Vary inversely proportional with changes in activity b) Remain constant as activity changes c) Decrease on a per unit basis as activity increases d) Remain constant on a per unit basis as activity changes
Show how each of these costs will behave as the volume of activity decreases. Variable cost per unit Total variable cost Fixed cost per unit Total fixed cost A. Increase B. Decrease C. Remains the same
On a cost-volume-profit graph, the revenue line will be shown below the total expense line for any activity level above the break-even point. FALSE O TRUE
PLEASE USE THIS TIME TO ANSWER THIS. AYAW NA PAGHULAT UG DEADLINE, TOMORROW IS ANOTHER DAY. PLEASE DEFINE AND GIVE THE FORMULA OF THE FOLLOWING (IF THERE IS ANY): PLEASE ANSWER HERE DIRECTLY 1. absorption costing 2. activity bases (drivers) 3. break-even polnt 4. contributlon margin 5. contributlon margin ratlo 6. cost behavlor 7. cost-volume-profit analysls 8. cost-volume-profit chart
The break-even point is that level of activity where: Select one: O a. sales revenue eguals fixed cost. O b. variable cost equals fixed cost. Oc total contribution margin equals the sum of variable cost plus fixed cost. O d. sales revenue equals total variable.cost Oe. contribution margin equals fixed cost.
1. To compute the breakeven point using the contribution margin, we get the ratio of a. Total fixed expenses and Total contribution margin b. Total variable expenses and Total Contribution margin c. Total fixed expenses and Contribution margin per unit d. Total variable expenses and Contribution margin per unit 2. A mathematical expression that describes a breakeven point of a company is a. Sales Revenue = Variable expenses + Fixed expenses b. Sales Revenue = Variable expenses - Fixed expenses c. Sales Revenue < Variable expenses + Fixed expenses d. Sales Revenue > Variable expenses - Fixed expenses 3. The Cost-Volume-Profit equation is given by a. Sales Revenue = Profits + Contribution margin ratio + Fixed expenses b. Sales Revenue = Profits + Contribution margin + Fixed expenses c. Sales Revenue = Profits+ Variable expenses + Fixed expenses d. Sales Revenue = Profits -Variable expenses…
Explain the impact of an increase in the level of activity (or cost driver) on (a) total fixed cost and (b) fixed cost per unit of activity.
1. Activity based costing is likely a more advantageous costing methold versus traditonal costing, to facilliate which of the following type of analysis? a) analysis of service organization cost b) analysis of channel profitablity c) analysis of long term profitablity d) analysis for reduction selling price of all products? 2. A ___ is any factor that causes a change in the cost of an activity. a) activity based cost b) cost pool c) cost driver d) standard 3. Which of the following is no a basic cost category for indirect cost? a) inventory financing cost b) Volume related cost c) Product batch cost d) activity based cost
Within the relevant range, as volume of activity increases a. Total fixed costs remain the sameb. Fixed cost per unit decreasesc. Variable cost per unit remains the samed.Total variable costs increasese. all of the above
The equation for total costs (Y) is: Y = a+ bX In this equation, “a” represents: Net income Cost of goods sold Total fixed costs The level of activity (e.g., the number of units produced) Total variable costs Variable cost per unit of X Total revenue
What is happening to average costs when marginal cost is greater than average cost at a specific production level? A. Average cost is decreasing B. Average cost and marginal cost are equal C. Average cost is increasing D. Average cost is not changing A
Contribution margin is Oa. profit Ob. the excess of sales over variable costs Oc. Oc. another term for volume in the "cost-volume-profit" analysis Od. the same as sales revenue