What would be the total contribution to profit to the company as a whole for 10,000 units transferred to Division B and later sold to outside customers at P21 per unit.A. P20,000B. P40,000C. (P20,000)D. P80,000 Division A has an expected annual production of 50,000 units and fixed manufacturingcosts of P300,000. The full absorption cost per unit based on the expected annualproduction is shown below:.Variable costFixed costsFull absorption costP69.P12Division A has idle capacity and Division B is considering buying 10,000 units fromDivsion A to be processed further and to sell at P21 per unit. Division B would incuradditional processing costs and selling costs of P6 and P5 per unit, respectively.

Total variable cost per unit = Variable cost per unit in Department A + Additional processing costs…

What would be the total contribution to profit to the company as a whole for 10,000 units transferred to Division B and later sold to outside customers at P21 per unit. A. P20,000 B. P40,000 C. (P20,000) D. P80,000

What would be the total contribution to profit to the company as a whole for 10,000 units transferred to Division B and later sold to outside customers at P21 per unit. A. P20,000 B. P40,000 C. (P20,000) D. P80,000

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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Question

What would be the total contribution to profit to the company as a whole for 10,000 units transferred to Division B and later sold to outside customers at P21 per unit.

A. P20,000

B. P40,000

C. (P20,000)

D. P80,000

Division A has an expected annual production of 50,000 units and fixed manufacturing
costs of P300,000. The full absorption cost per unit based on the expected annual
production is shown below:.
Variable cost
Fixed costs
Full absorption cost
P6
9.
P12
Division A has idle capacity and Division B is considering buying 10,000 units from
Divsion A to be processed further and to sell at P21 per unit. Division B would incur
additional processing costs and selling costs of P6 and P5 per unit, respectively.

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