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

See similar textbooks

Related questions

Q: Following GAAP, the income statement issued to in OA. be prepared in the contribution margin forma…

A: The three most important financial statements are enumerated as below:Income Statement Balance…

Q: Which of the following ratios indicates the percentage of each sales dollar that is available to…

A: The objective of the question is to identify the correct ratio that indicates the percentage of each…

Q: Which of the following statements is TRUE? O A. Variable costs per unit decrease as production…

A: Total Variable cost are the cost which changes with change in production volume . Fixed cost do not…

Q: When Total Contribution magrin equals total fixed costs, this indicates operating income True…

A: If the contribution margin is equal to the total fixed cost that means it a situation of the…

Q: Which of the following statements is correct: A. total fixed cost remain constant while variable…

A: Fixed Costs: Total Fixed cost remains constant at all the level of activities. Fixed cost per unit…

Q: when total contribution margin equals total fixed cost this indicates operating income true false

A: First we understand contribution margin Contribution margin means Variable cost deduct from Sales…

Q: Which of the following describes the behavior of the fixed cost per unit?

A: Fixed cost is the cost which is doesnt change gets effects with the change in production which means…

Q: What is characteristic of variable costs within the relevant range? A. Decrease in total as as…

A: Variable costs within the relevant range has following characteristics :- Total variable cost…

Q: To better determine profit goals, activity-based cost (ABC) accounting, which tries to identify the…

A: ABC Is used in assigning both costs and overhead

Q: Explain the effect of a decrease in the level of activity (cost driver) on: (i) total fixed cost…

A: Lets understand the basics. Fixed cost are cost which do not change with level of output. In other…

Q: Harof activity increases, total variable costs a. decrease. b. remain the same. c. Increases in…

A: Variable costs: Variable costs means costs which changes with the level of output. Variable cost per…

Q: Variable costs per unit are affected by an increase or decrease in activity. True or False True…

A: Variable Cost is that type of cost which is associated with the number of units produced or volume…

Q: Costs that change in total but not proportionately with changes in the activity level are mixed…

A: The costs incurred during the production process can be classified as fixed, variable and mixed…

Q: When output volume increases, do fixed costs per unit increase, decrease, or stay the same within…

A: Fixed Costs: These are the costs that remain constant in total dollar amount irrespective to the…

Q: Which of the following is correct concerning reactions to INCREASES in activity? Variable Cost Per…

A: Expenses that change in direct proportion to the volume of output or activity in a business are…

Q: . Which of the following is the best definition of a variable cost? A. A variable cost is one which…

A: Variable costs are the costs that vary on the basis of the level of output. They are determined per…

Q: A cost increases or decreases in intervals as activity changes. a. historical cost b. step cost…

A: Introduction: Fixed costs: The costs which are fixed in nature , it won't varies according to the…

Q: iable costs change in direct proportion to a change in the activity level. True or False?

A: There are two types of one is fixed cost and other is variable cost and both are part of the total…

Q: A scatter graph is used to test the assumption that the relationship between cost and activity level…

A: There is a systematic relationship between costs and activity level. In accounting we see that the…

Q: When using the high-low method to estimate costs, the formula “Change in Cost divided by Change in…

A: The objective of the question is to identify what cost component is estimated using the formula…

Q: When the level of activity decreases, variable costs will:A - increase per unit.B - increase in…

A: Step 1:When the level of activity decreases, variable costs will change as follows: A - Increase per…

Q: Show how each of these costs will behave as the volume of activity decreases.…

A: The volume of activity directly impacts the variable cost because the variable cost changes directly…

Question

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 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

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

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
Variable costing income will be greater than absorption costing income when: a. Sales is greater than production. b. contribution pricing is applied c. Production is less than or equal to sales. d. Production is greater than sales
Fixed costs are costs that: A) Change in total with changes in the level of activity B) Remain constant per unit with changes in the level of activity C) Remain constant in total regardless of changes in the level of activity D) Vary inversely with changes in the level of activity
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
In the fixed cost per unit does the it increase as activity decreases and will decrease as activity increases?
7. Which of the following is the best definition of a variable cost? A. A variable cost is one which is directly traceable to an activity of the business for which the cost will be used. B. A variable cost is one which is associated with goods or services purchased, or produced, for sale to customers. C. A variable cost is one which changes with changes in the level of activity, over a defined period of time. D. A variable cost is one which is spread over a number of activities of the business for which costs are to be determined.