Solve the following problems. Problem No. 1 Step Company produces toys and other items for use in beach and resort areas. A small, inflatable toy has come onto the market that the company is anxious to produce and sell. Enough capacity exists in the Company's plant to produce 15,000 units ofthe toy each month. Variable costs to manufacture and sell one unit would be P1250, and fixed costs associated with the toy would total P350000 per month. The Compa ny's Marketing Department predicts that demand for the new toy will exceed the 16,000 units that the company is able to produce. Additional manufacturing space can be rented from another company at a fixed cost of P103000 per month. Variable costs in the rented facility would total P14 per unit, due to somewhat less efficient operations than in the main plant. The new toy will sell P30 per unit. Compute for the following: a. Breakeyen units for the new toy b. The number of units the company need to sell in order to earn a before tax profit of P150,000 c. If the sales manager receives a bonus of P100 for each unit sold in excess of the brea keyen point, how many units must be sold for each month to earn a return of 25% on the monthly investment in fixed costs? d. Assuming that Step Company will just rent a manufacturing space for a month in order to produce special order for 8.000 toys. What is the acceptable minimum selling price to Step Company for the special sale? Problem No. 2 Darf Company applies overhead on the basis of direct labor hours. Two direct labor hours are required for each product unit. Planned production for the period was set at 9,000 units. Manufacturing overhead is budgeted at P135000 for the period. of which 20% ofthis cost is fixed. The 17,2000 hours worked during the period resulted in production of 8,500 units. Variable manufacturing overhead cost incurred was P108500 and fixed manufacturing overhead cost was P28,000. Darf Company uses a four variance method for analyzing manufacturing overhead. Compute for the following: a. The variable overhead spending variance for the period b. The variable overhead efficiency variance (quantity) variance for the period c. The fixed overhead budget {Spending} variance for the period Problem No. 3 Lake Merchandiser asks your services to develop cash and other budget information for the first quarter of 2007. In December 31, the store had the following balance: Cash P 55,000 Accounts receivable 4,370,000 Inventories 3,094,000 Accounts payable 1,330,550 The following information are relevant to 2007 operations: Sales: a. Each month's sales are billed on the last day of the month. b. Customers are allowed a 3 percent discount if payment is made within 10 days after the billing date. Receivables are booked gross. C. Sixty percent of the billings are collected within the discount period, twenty-five percent are collected by the end of the month, nine percent are collected by the end of the second month, and six percent are considered entirely uncollectible. Purchases: 1. Fifty four percent of all purchases and selling, general and administrative expenses are paid in the month purchased and the remainder in the following month. 2. Each month's units of ending inventory is equal to one hundred thirty percent of the next month's units of sales. 3. The cost of each unit of inventory is P200. 4. Selling, general, and administrative expenses, of which, P20,000 is depreciation, are equal to fifteen percent of the current month's sales. Actual and projected sales are as follows: UNITS PESOS November 11,800 P3,540,000 December 12,100 3,630,000 January 11,900 3,570,000 February 11,400 3,420,000 March 12,000 3,600,000 April 12,200 3,660,000 Compute for the following: a. The respective amounts of budgeted purchases for the months of January and February b. The budgeted cash disbursements for the month of February C. The amount of cash collected from sales during the month of January d. The number of units to be purchased during the month of March