Alexandra Co. provides two products, Velvet and Cotton. Velvet accounts for 60 percent of total sales.

The variable

costs as a percentage of selling prices are 60% for Velvet and 85% for Cotton. Total fixed costs are
P225,000.

If fixed costs will increase by 30 percent, what amount of peso sales would be necessary to generate an
operating

profit of P48,000?

A. P1,350,000 C. P1,135,000

B. P 486,425 D. P 910,000 Bobadilla

. Last month, Zamora Company had an income of P0.75 per unit with sales of 60,000 units. During the
current month

when the unit sales are expected to be only 45,000, there is a loss of P1.25 per unit. Both the variable
cost per unit

and total fixed costs remain constant.

The fixed costs amounted to

A. P 80,000 C. P360,000

B. P247,500 D. P210,000

. Which of the following procedures would an auditor least likely perform in planning a financial

statement audit?

a. Reading the current year's interim financial statements.

b. Selecting a sample of vendor's invoices for comparison to receiving reports.

c. Coordinating the assistance of entity personnel in data preparation.

d. Discussing matters that may affect the audit with firm personnel responsible for non-audit

services to the entity.

20. An extensive understanding of the client's business and industry and knowledge about the
company's operations are essential for doing an adequate audit. For a new client, most of this

information is obtained

a. From the Securities and Exchange Commission.

b. At the client's premises.

c. From the predecessor auditor.

d. From the permanent file.