managerical accounting

TASK PERFORMANCE Instructions: Read and analyze the situations given below. Answer the following questions on a separate sheet of paper. Show your computations. (13 items x 5 points) An airline company flies domestic routes between Manila and the various cities in the Philippines. The airline serves meals to all passengers as part of their package service. The cost of one (1) complete meal is provided below. Variable costs: Direct materials P6.00 Direct labor 4.00 Variable overhead 4.00 Fixed costs: Supervisory salaries 4.00 Depreciation of kitchen equipment 7.00 Total cost per meal P25.00 A catering service has offered to supply the meals for P20.00 each. Assume further that P1.00 of the fixed costs could be avoided. The fixed cost per unit was computed using the normal operations of 2,000 meals per month. 1. Determine the relevant/differential costs. 2. Should the company make or buy meals? Assume that a Hong Kong tourist agency approached the president of the airline about flying chartered tourist flights from Manila to Hong Kong. The tourist agency has offered the airline P180,000 per round-trip flight on a jumbo jet. Given the airline's usual occupancy rate and airfares, a round-trip jumbo jet generates revenue of P270,000. Sales Revenues: Passenger P270,000 Cargo 40,000 P310,000 Variable Costs 120,000 Fixed Costs 100,000 220,000 Net Income 90,000 If the offer is accepted, the company will not incur reservations and ticketing costs estimated to be P10,000. There is also an excess capacity to produce additional units of the special offer. 3. Determine the relevant/differential costs. 4. Should the offer be accepted