PROBLEM: Financial Perspective Gloria Corporation presents the following information for year 2020 & 2021 2020 P 45, 000 2021 P 38, 000 Sales Production Expenses Direct materials 12,000 9, 504 Direct labor 10, 000 8, 976 Factory overhead 5, 000 5, 000 P 18, 000 13,000 P 5, 000 P 14, 520 13, 000 P 1, 520 Gross Profit Operating Expenses Operating income 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
PROBLEM: Financial Perspective Gloria Corporation presents the following information for year 2020 & 2021 2020 P 45, 000 2021 P 38, 000 Sales Production Expenses Direct materials 12,000 9, 504 Direct labor 10, 000 8, 976 Factory overhead 5, 000 5, 000 P 18, 000 13,000 P 5, 000 P 14, 520 13, 000 P 1, 520 Gross Profit Operating Expenses Operating income 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Compute the Cost Effect- Price Recovery Component indicate if favorable/(unfavorable).
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
9, 504
8, 976
Direct materials
12,000
Direct labor
10, 000
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
Raw materials used ( kg)
1, 200
720
Direct labor hours
1, 000
816
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