Mia Fe E.

Uy
Activity 2

Relevant Costing
Let’s Check 1. C
2. B
Activity 1 3. A
4. C
5. B
1. True 6. B
2. False 7. D
3. True SOLUTION:
4. True Sales value of reworked material:
5. True P58,100
6. True Less: Cost to rework material:
7. False 6,600
8. False Net Sales Value:
9. True P51,500
10. False Current Scrap Value:
11. False 45,600
12. True Net Disadvantage:
13. True P5,900
14. True
15. True 8. B
9. A
10. B
11. D
12. A
13. D
14. C
15. C
Let’s Analyze
1.

Relevant cost per unit:

Direct Materials
Direct Labor
Variable Manufacturing Overhead
Fixed Manufacturing Overhead (14.20
- 9.30)
Relevant Manufacturing Cost

2.

Net advantage (disadvantage):

Manufacturing Cost Savings (P47.80 x 50,000)
Additional Contribution Margin
Cost of Purchasing the Part ($50.10 x 20,000)
Net Advantage (Disadvantage)

3.
xxxx

4.
Direct materials P26
Direct labor 3
Variable manufacturing overhead 1
Minimum price per unit P30

5.
6.

Selling Price P150

Direct Materials 26
Direct Labor 3
Variable manufacturing overhead 1
Variable selling expense 232
Contribution margin per unit P118