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Financial Analysis and Cost Management

The document contains financial information and calculations for multiple problems and exercises. Problem 8 includes expense breakdowns by category and location. Problem 9 compares keeping a plant open versus closing it, showing fixed and variable costs and the impact on net operating income. Problem 3 provides data on contribution margin per unit and per hour for three product lines.

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Titania Erza
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7 views6 pages

Financial Analysis and Cost Management

The document contains financial information and calculations for multiple problems and exercises. Problem 8 includes expense breakdowns by category and location. Problem 9 compares keeping a plant open versus closing it, showing fixed and variable costs and the impact on net operating income. Problem 3 provides data on contribution margin per unit and per hour for three product lines.

Uploaded by

Titania Erza
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd

PROBLEM 8

1
Direct Advertising
General Advertising
Sales Salaries
Delivery Salaries
Store Rent
Deptn Fixtures
Deptn Delivery Equip
Total

2
Store Management Salaries
General Office Salaries
Utilities
Insurance - fixtures and Inv
Employment Taxes
General Office Expenses
Total

3
Total Company Gross Margin
Ortigas GM
Total Selling Expeses Less Avoidable
Total Admin Expenses Less Avoidable
Net Operating Income

4
Total Company GM
Makati - GM Increase
Ortigas GM
New GM
Total Selling Expeses Less Avoidable
Total Admin Expenses Less Avoidable
Net Operating Income

PROBLEM 9
1&2

Sales (11,000 gallons x P35 per gallon x 2)


Variable Expense (11,000 gallons x P21 per gallon x 2)
Contribution Margin
Fixed costs:
Fixed manufacturing overhead cost (P230,000 x 2); (P170,000 x 2)
Fixed selling cost (P310,000 x 2); (P310,000 x 90% x 2)
Total Fixed Cost (Avoidable)
Net Operating Loss before start-up costs
Start-up Costs
Net Operating Income (Loss)

3
Total Fixed Cost (Avoidable)
Start-up Costs
Net avoidable osts
Contribution Margin (P35-21)
Sales (in gallons)

PROBLEM 3
1

Selling price per unit


Variable cost per unit
Contribution margin / unit
Divided by no. of hours required for each unit
Contribution per hour

Total Hours Avail


Martket Limit

EXERCISE 12
EXERCISE 13

PROBLEM 6
PROBLEM 10
Total Ortigas Avoidable
118,500.00 36,000.00 36,000.00
20,000.00 4,800.00 0.00
157,000.00 45,000.00 45,000.00
30,000.00 10,000.00 7,000.00
215,000.00 65,000.00 65,000.00
46,950.00 8,800.00 0.00
27,000.00 9,000.00 0.00
614,450.00 178,600.00 153,000.00

Total Ortigas Avoidable


78,000.00 33,000.00 15,000.00
50,000.00 12,000.00 8,000.00
89,800.00 27,200.00 27,200.00
25,500.00 9,000.00 6,000.00
36,000.00 10,200.00 3,600.00
25,000.00 6,000.00
304,300.00 97,400.00 59,800.00

1,050,000.00
(228,000.00)
(461,450.00)
(244,500.00)
116,050.00

1,050,000.00
86,000.00
(228,000.00)
908,000.00
(461,450.00)
(244,500.00)
202,050.00

Difference - Net Operating Income


Keep Plant Open Close the Plant
Increase (Decrease)
770,000.00 0.00 (770,000.00)
(462,000.00) 0.00 462,000.00
308,000.00 0.00 (308,000.00)

(460,000.00) (340,000.00) 120,000.00


(620,000.00) (558,000.00) 62,000.00
(1,080,000.00) (898,000.00) 182,000.00
(772,000.00) (898,000.00) (126,000.00)
0.00 (14,000.00) (14,000.00)
(772,000.00) (912,000.00) (140,000.00)

182,000.00
(14,000.00)
168,000.00
14.00
12,000.00

PRODUCT LINE
A B C
30.00 25.00 10.00
25.00 10.00 5.00
5.00 15.00 5.00
5.00 10.00 4.00
1.00 1.50 1.25

96,000.00 96,000.00 96,000.00


0.00 0.00 8,000.00

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