The following information were obtained from the records of HILO Company: Production in units 8, 000 Manufacturing costs: Direct Materials P5 per unit Direct labor 3 per unit Variable overhead 1 per unit

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The following information were obtained from the records of HILO Company:
Production in units 8, 000
Manufacturing costs:
Direct Materials P5 per unit
Direct labor 3 per unit
Variable overhead 1 per unit
Fixed overhead total 100, 000
Sales price 40 per unit
The operating profit under absorption costing is P30, 000 and the unit sales is 5,000.
Questions:
a. What is the amount profit/(loss) under absorption costing?
(profit/loss)
b. What is the total period expense recognized by the company if it used variable costing
system?
c. What is the total period costs under absorption costing ?
Transcribed Image Text:The following information were obtained from the records of HILO Company: Production in units 8, 000 Manufacturing costs: Direct Materials P5 per unit Direct labor 3 per unit Variable overhead 1 per unit Fixed overhead total 100, 000 Sales price 40 per unit The operating profit under absorption costing is P30, 000 and the unit sales is 5,000. Questions: a. What is the amount profit/(loss) under absorption costing? (profit/loss) b. What is the total period expense recognized by the company if it used variable costing system? c. What is the total period costs under absorption costing ?
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