(No. 6 is at the end of Test II) 7. The Yellow Company has the capacity to manufacture 20,000 units per month. However, present plans call for monthly production and sales of 15,000 units at P21.00...

Extracted text: (No. 6 is at the end of Test II) 7. The Yellow Company has the capacity to manufacture 20,000 units per month. However, present plans call for monthly production and sales of 15,000 units at P21.00 each. Costs per unit are as follows: Direct materials P7.00 Direct labor 4.20 Variable factory overhead Fixed factory overhead Variable marketing expenses Fixed administrative expenses 1.05 2.10 0.35 1.40 P16.10 Total Assume that Yellow Company accepted a special order of 5,000 units at P15.00 per unit, the decrease or increase in contribution margin shall amount to a. P5,500 decrease b. P12,000 decrease c. P12,000 increase d. P13,750 increase e. None of these; answer is 8. Refer to no. 7. The unit cost figure the company would use in costing inventory using direct costing is a. P12.25 b. P12.60 c. P14.70 d. P16.10 e. None of these; answer is 9. Refer to no. 7. Assuming that the regular sales price of the company is reduced to P19.00 resulting in a 10% increase in sales volume, the effect in the monthly contribution margin will be a. P20,400 decrease b. P20,400 increase c. P30,000 increase d. P33,000 increase e. None of these; answer is 10. Tam Co. is negotiating for the purchase of equipment that would cost P100,000 with the expectation that P20,000 per year could be saved in after-tax cash costs if the equipment were acquired. The equipment's estimated useful life is 10 years, with no residual value and would be depreciated by the straight-line method. Tam's predetermined minimum desired rate of return is 12%. Net present value is a. P5,760 b. P6,440 с. Р12,200 d. P13,000 e. None of these; answer is 11. Refer to no. 10. Payback period is a. 4.0 years b. 4.4 years c. 4.5 years d. 5.0 years e. None of these; answer is 12. Refer to no. 10. Accrual accounting rate of return based on initial investment is d. 10% a. 30% b, 20% c. 12% e. None of these; answer is 13. Refer to no. 10. In estimating the internal rate of return, the factors in the table of present values of an annuity should be taken from the columns closest to с. 5.00 a. 0.65 b. 1.30 d. 5.65 e. None of these; answer is