422 PART 2- FOUNDATIONS OF MANAGEMENT ACCOUNTING Chapter 7 -Absorption and Variable Costing 423

30. •A AbsorptionVariable
• The difference. is due to.lhe fixed ..overhead cost that was
Materials Costing Costing. inventoried' under absorption costing (150 units',x P5.50; the
 -
L a b o r 03.50 ' P3.50 : fixed.
 overhead costper unit). • ,
Variable factory overhead • 2.50 2.50 • •
1.00 " 1.00  • •
Fixed factory overhead The difference ie equal 'to 'the change: in income under both
 P rod uct ' co st p er 1.30
methods (P3000 —sP2,175 P825);•which is accounted for by
u ni t x Units in the ending P8.30 P7.00
multiplying the change in inventory. (.150 . units) by the fixed
inventory *(Production —
Sales) overhead cost per.unit. • •. •
.• (150,000 — 135,000) 16,220 • 15,000
•

 •

P.3,150;000
•

- Sales (2
 • •

35. •

Cost of ending:inventory. • P124.500 p105.000

. .
1000 units x P150) •
.
Less
 cost of goods sold: ' • • ••
31. B Variable ma nufacturing cost per unit P 20 •
Standard cost of goods sold
Fixed, manufacturing cost per unit
21000x P70) e1,470,000.
(P.150,000 ÷ 5,000) • • 30
Product cost per unit 7 absotptiOn costing P '50 • •  Add unfavorable fixed FO!-I•
v a •r • i a n c e ' •.10.000
aimock •
 •; • P1870,000
x Ending inventory —,units (5,500 — 5,250) • 250 units
-

Gross income:. '•. •• • • .• • •• 870,000 ,

.Less selling and administrative expenses : • p 800 000
Cost of ending inventory '. P12.500
• income " •• •
 .
32. D 'Ending inventory Units (100,000 —80,000) 20,000 units *,•.Standard product cost per unit:
 .x Product cost per•Unit L- variable costing P 6 0 P60
Variable manufacturing cost
Cost of ending inventory variable costing • P1 200 000 Fixed manufacturing ccidt • :
015,000 (P240,000 ÷ 24,040 units,•normai'depaCity) 101
3 3 . A Sales . Total • P7Q
Less variable costs':
Manufacturing' .
P6,300 ** Fixed FOE-I Variance
(600-boxes X P10.50) . .
Selling and administrative Achial fixed FOH (assumed to be equal to
(600 x P1180) 1,00 7,380
the budgeted fixed FOH
Contribution margin P. 7.620 per quarter) . P240.000 •
Less fixed costs: •
Less standard fixed.F01-1: Acttial
Manufacturing overhead • P4,125 production (Units) • 23,000
x Standard fixed . •
Selling and —
(P2,400 administrate
01;080) • P10 230 000
1,320 .5.445 FOH per unit
Income — variable Costing U
P 2,175 Fixed factory overhead variance
. •.
341A • 
Absorption
• Variable .•
. „ 
Labor...(P
Ending inventory 7 units .
(750 600) .
1 5 0 •
x Product cost per unit •
:j5 •
Cost of ending inventory
0 16 " P10.50 .
Difference (P2,400 — P1,575) •