1. In year 2020, E Corp has an operating leverage of 1.25, margin of safety of P 100,000 and Contribution margin ratio of 40%. If sales increased by 10% and fixed cost is P 10,000, what will be the net income in year 2021?

a. 48,000

b. 45,000

c. 44,000

d. None of the above

2. Phoebe Corporation uses a standard cost system. Direct labor information for product B for the month of September is as follows: Standard rate P6.10 per hour Actual rate paid P6.00 per hour Standard hours allowed for actual production 1,500 hours Labor efficiency variance P 600 unfavorable What is the actual hours worked?

a. 1,400

b. 1,402

c. 1,598

d. 1,600

e. None of the above