PUGNA CORP. is a company specializing in manufacturing and sellin customized and specialized neck pillows. The selling price of each pillow i P750 per unit. On its first month of operations, 3,500 units were produced where 2,500 units were sold. Actual fixed costs are the same as budgeted fixed costs. The company is using a denominator level of activity of 4,000 units. Information on its costs was as follows: Variable costs: Direct materials 500,000 600,000 300,000 200,000 90,000 Direct labor Manufacturing overhead Selling costs Administrative costs Fixed costs: Selling costs Administrative costs 50,000 250,000 400,000 Manufacturing overhead If the company is using variable costing, how much is cost of goods sold and volume variance, respectively? P1,000,000; 50,000 F b. c. P1,000,000; 50,000 UF d. None; None a. P1,000,000; None If the company is using absorption costing, how much is net income or (loss) for the first month of operations? P 85,000 (P10,000) C. P 35,000 a. d. (P15,000) b.
PUGNA CORP. is a company specializing in manufacturing and sellin customized and specialized neck pillows. The selling price of each pillow i P750 per unit. On its first month of operations, 3,500 units were produced where 2,500 units were sold. Actual fixed costs are the same as budgeted fixed costs. The company is using a denominator level of activity of 4,000 units. Information on its costs was as follows: Variable costs: Direct materials 500,000 600,000 300,000 200,000 90,000 Direct labor Manufacturing overhead Selling costs Administrative costs Fixed costs: Selling costs Administrative costs 50,000 250,000 400,000 Manufacturing overhead If the company is using variable costing, how much is cost of goods sold and volume variance, respectively? P1,000,000; 50,000 F b. c. P1,000,000; 50,000 UF d. None; None a. P1,000,000; None If the company is using absorption costing, how much is net income or (loss) for the first month of operations? P 85,000 (P10,000) C. P 35,000 a. d. (P15,000) b.
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 5EB: Baxter Company has a relevant range of production between 15,000 and 30,000 units. The following...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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