MAS SOLUTIONS TO PROBLEMS SOLUTIONS 2018.docx

# 25 2400 unfavorable if the difference in quantity is

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Difference in quantity = 3,000 ÷ P1.25 = 2,400 unfavorable If the difference in quantity is unfavorable, the actual quantity is greater than the standard quantity: Standard quantity (14,400 x 4) 57,600 Add unfavorable difference in quantity 2,400 Actual quantity used 60,000 units Price Variance = (AP – SP) x AQ = ([P126,000 ÷ 84,000] – P1.25) x 60,000 Operating leverage factor = Contribution margin Profit before tax = P358,875 x 58% P358,875 x 10% = P208,147.50 = 5.8 B P35,887.50

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MANAGEMENT ADVISORY SERVICES Page 4 = P15,000 unfavorable A 21. Actual price (P10,080 ÷ 4,200) P2.40 Standard price 2.50 Difference in prices - favorable P 0.10 X actual quantity purchased 4,200 Price variance – favorable P 420 D 22. Actual time – hours 4,100 Less standard time (1,000 x 4) 4,000 Difference in time – unfavorable 100 X standard rate per hour P 12 Efficiency variance – unfavorable P1,200 C 23 to 27 Actual variable overhead P4,100 Actual time x std. var. rate (2,100 x P2) 4,200 Spending variance – favorable P 100 Actual time x std. var. rate (2,100 x P2) P4,200 Std. variable overhead [(19,000 x 0.1) x P2] 3,800 Efficiency variance – unfavorable P 400 Actual fixed overhead P22,000 Less budgeted fixed overhead 20,000 Fixed spending variance – unfavorable P 2,000 Budgeted fixed overhead P20,000 Less standard fixed overhead [1,900 x (P20,000/<20,000 x 0.1>)] 19,000 Volume variance – unfavorable P 1,000 23. Controllable variance (P100 F + P400 U + P2,000 U) = 2,300 U C 24. Spending variance (P100 F + P2,000 U) = P1,900 U B 25. Efficiency variance P400 U A 26. Noncontrollable variance P1,000 U D 27. Fixed overhead efficiency variance Zero D 28. [4,100 – (1,000 x 4)] x P12 = P1,200 B 29. Input quantity – Spoilage = Output amount X – .2X = 2 yds. 0.8X = 2 yds. X = 2.5 yds. Standard direct material cost per unit of finished product = 2.5 yds. × P3 = P7.50 D 30. Change in inventory (100k – 80k) 20,000 x fixed overhead cost per unit (P180k ÷ 100) 1.80 Difference in income P36,000 C 31. 1,000 x 20 = 20,000 B
MANAGEMENT ADVISORY SERVICES Page 5 32. Product X Product Y CM per unit P 50 P 64 ÷ hours per unit 5 8 CM per hour P 10 P 8 80% of capacity must be applied to Product X, the product with the higher CM per hour. Product X (25,000 x 80%) ÷ 5 = 4,000 units x P50P 200,000 Product Y (25,000 x 20%) ÷ 8 = 625 units x P64 40,000 Total contribution margin P240,000 B 33. Loss P15,000 Desired profit 10,000 Required increase in profit P25,000 ÷ number of units 5,000 Profit per unit P 5.00 Add production costs: Materials (P6.00 – P1.50) P 4.50 Labor 10.00 Variable overhead 3.00 Variable selling exp (P2 – P1) 1.00 18.50 Sales price per unit P23.50 A 34. Avoidable sales P1,000,000 Avoidable costs: Var. CGS (P800,000 x 75%) P600,000 Fixed CGS (P800,000 – P600,000) x 60%120,000 Selling expenses 100,000 Admin. exps. (P250,000 x 10%) 25,000 845,000 Decrease in income P155,000 C 35.The special order is for 500 boxes of 24 bottles each or a total of 12,000 bottles. Materials costs will be: Chem 1: Total required – 12,000 bottles x 4 ml48,000 ml Available Chem 5 that can be substituted for Chem 1, 20,000 ml, salvage value… * P 6,000 Balance of Chem 1 required (48,000 ml – 20,000 ml) x P0.54 15,120 Chem 2: 12,000 bottles x 3 ml x P0.36 12,960 Chem 3 12,000 bottles x 2 ml x P0.20 4,800 Chem 4 12,000 bottles x 5 ml x (P0.40 – P0.10)* 18,000 Total materials cost P56,880 D * The relevant cost of existing stocks is equal to their salvage value that will not be realized if the stocks are used in the Clever order.

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