Strategic Cost Management

Problem 1

A. .
B. 3,4,8,9
C. 1,3,4,5,9
D. 1,3,4,5,8,9,
E. 2,6,7

Problem 2

A. Direct material used 150,000

Direct labor 80,000
Variable manufacturing overhead 30,000
Total Inventoriable Cost P260,000

B. Direct material used 150,000

Direct labor 80,000
Variable manufacturing overhead 30,000
Fixed manufacturing overhead 100,000
Total Inventoriable Cost P360,000

C. 1. Fixed manufacturing overhead (Variable costing) P100,000

Fixed selling and administrative cost P60,000

2. Fixed manufacturing overhead (absorption costing)

(100,000/ 20,000) x 18,000 units = P90,000
Fixed selling and administrative cost P60,000

D. Sales 625,000
Variable cost (18,000 x 13) + 51,000 (285,000)
Contribution margin P340,000

Problem 3

A. 1,080,000 / 60,000 = 18
60,000 x 90% = 54,000
60,000 – 54,000 = 6,000
6,000 x 18 = P108,000
 B. Sale (540,000 x 55) 2,970,000
Variable cost of goods sold 972,000
Variable selling and administrative cost 120,000 (1,092,000)
Contribution Margin P1,878,000

Sosa will disclose the contribution margin on variable-costing income statement.

C. None
D. Sales 2,970,000
Cost of goods sold (54,000 x 28) (1,512,000)
Gross Margin P1,458,000

Problem 6

A. Units sold 35,000

Ending Finished goods inventory 12,000
47,000 units
B. 141,000/47,000= P3
C. Sales Revenue 770,000
COGS (560,000)
Gross Margin P210,000

D. Fixed cost (35,000 x 3) 105,000

Variable Cost 455,000
Cost of Goods sold 560,000

455,000/35,000= P13