CPAR: MS8906_RELEVANT COSTING BATCH MAY 2021

MS8906 – RELEVANT COSTING

QUIZZER (DO-IT-YOURSELF DRILL)

THEORIES
1. The manner of determining whether favorable results of an alternative are sufficient to justify the cost
of taking that alternative
A. Cost behavior analysis C. Cost center analysis
B. Cost benefit analysis D. Cost control analysis
2. In the development of accounting data for decision-making, relevant costs are
A. Budgetary costs authorized for the administrative year.
B. Standard costs developed by time and motion experts.
C. Future costs which will differ under each alternative course of action.
D. Historical costs which are the best available basis for estimating future costs.
3. The relevance of a particular cost to a decision is determined by
A. Amount of the cost. C. Potential effect on the decision.
B. Number of decision variables. D. Riskiness of the decision.
4. The term relevant cost applies to all of the following decision situations except the
A. Replacement of equipment.
B. Determination of product price.
C. Acceptance of special product order.
D. Manufacture or purchase of a component part.
5. Management accountants are concerned with incremental unit costs. These costs are similar to the
following except
A. The cost to produce an additional unit. C. The manufacturing unit cost.
B. The economic marginal cost. D. The variable cost
6. A fixed cost is relevant if it is
A. a future cost. C. avoidable.
B. a product cost. D. sunk.
7. The distinction between avoidable and unavoidable costs is similar to the distinction between
A. discretionary costs and committed costs. C. variable costs and fixed costs.
B. step-variable costs and fixed costs. D. variable costs and mixed costs.
8. The type of cost vital to decision making but not recorded in the accounting records
A. Direct costs C. Out of pocket costs
B. Opportunity costs D. Sunk costs
9. What is the opportunity cost of making a component part in a factory given no alternative use of the
capacity?
A. Zero.
B. The total variable cost of the component.
C. The total manufacturing cost of the component.
D. The variable manufacturing cost of the component.
10. If a cost is irrelevant to a decision, the cost could not be
A. a future cost. C. a variable cost.
B. a sunk cost. D. an incremental cost.
11. All of the following are examples of imputed costs except
A. Decelerated depreciation.
B. The stated interest paid on a bank loan.
C. The use of the firm's internal cash funds to purchase assets.
D. Assets that are considered obsolete that maintain a net book value.

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CPAR: MS8906_RELEVANT COSTING BATCH MAY 2021
12. In analyzing whether to build another regional service office, the salary of the Chief Executive Officer
(CEO) at the corporate headquarters is
A. Relevant because salaries are always relevant.
B. Irrelevant since another imputed costs for the same will be considered.
C. Relevant because this will probably change if the regional service office is build.
D. Irrelevant because it is future cost that will not differ between the alternatives under
consideration.
13. Total unit costs are
A. Irrelevant in marginal analysis.
B. Relevant for cost-volume-profit analysis.
C. Needed for determining product contribution.
D. Independent of the cost system used to generate them.
14. Sunk costs
A. Are fixed costs.
B. Are relevant to decision making.
C. Are substitute for opportunity costs.
D. In and of themselves are not relevant to decision making.
15. The variable cost of a unit of product made yesterday is
A. A differential cost. C. An incremental cost.
B. A sunk cost. D. An opportunity cost.
16. Assume a company produces three products: A, B, and C. It can only sell up to 3,000 units of each
product. Production capacity is unlimited. The company should produce the product (or products) that
has (have) the highest
A. sales price per unit. C. contribution margin per unit.
B. gross margin per unit. D. contribution margin per hour of machine time.
17. There is a market for both product X and product Y. Which of the following costs and revenues would
be most relevant in deciding whether to sell product X or process it further to make product Y?
A. Total cost of making Y and the revenue from sale of Y.
B. Total cost of making X and the revenue from sale of X and Y.
C. Additional cost of making X, given the cost of making Y, and additional revenue from Y.
D. Additional cost of making Y, given the cost of making X, and additional revenue from Y.
18. When there is one scarce resource, the product that should be produced first is the product with
A. the highest demand
B. the highest contribution margin per unit
C. the highest sales price per unit of scarce resource
D. the highest contribution margin per unit of the scarce resource
19. Fixed costs are ignored in allocating scarce resources because
A. they are sunk.
B. fixed costs only apply to long-run decisions.
C. they are unaffected by the allocation of scarce resources.
D. there are no fixed costs associated with scarce resources.
20. Which of the following activities within an organization would be least likely to be outsourced?
A. accounting C. product design
B. data processing D. transportation
21. Among the costs relevant to a make-or-buy decision include variable manufacturing costs as well as
A. Avoidable fixed costs. C. Real estate taxes.
B. Plant depreciation. D. Unavoidable costs.
22. In a make or buy decision, the opportunity cost of capacity could
A. be considered to increase the price of units purchased from suppliers.
B. be considered to decrease the price of units purchased from suppliers.
C. be considered to decrease the cost of units manufactured by the company.
D. not be considered since opportunity costs are not part of the accounting records.
23. A purchasing agent has two potential firms to buy materials from for production. If both firms charge
the same price, the material cost is
A. a committed cost. C. an irrelevant cost
B. a sunk cost D. an opportunity cost
24. Which of the following costs are relevant to a make-or-buy decision?
A. annual depreciation of the equipment
B. original cost of the production equipment
C. the amount that would be received if the production equipment were sold
D. the cost of direct materials purchased last month and used to manufacture the component

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CPAR: MS8906_RELEVANT COSTING BATCH MAY 2021
25. Which of the following is NOT relevant in a make-or-buy decision about a part the entity uses in some
of its products?
A. The reliability of the outside supplier.
B. The number of units of the part needed each period.
C. The outside supplier’s per-unit variable cost to make the part.
D. The alternative uses of owned equipment used to make the part.
26. When only differential manufacturing costs are taken into account for special-order pricing, an
essential assumption is that
A. Manufacturing fixed and variable costs are linear.
B. Acceptance of the order will not affect regular sales.
C. Selling and administrative fixed and variable costs are linear.
D. Acceptance of the order will not cause unit selling and administrative variable costs to increase.
27. If a firm is at full capacity, the minimum special order price must cover
A. variable costs associated with the special order
B. variable and incremental fixed costs associated with the special order
C. variable and fixed manufacturing costs associated with the special order
D. variable costs and incremental fixed costs associated with the special order plus foregone
contribution margin on regular units not produced
E. both B and D.
28. Idle capacity in the interim (normally temporary) will generate short-term benefit in accepting sales
at price that
A. Increase total fixed costs.
B. Positively motivate employees.
C. Result in less than normal contribution margin.
D. Reduce the overall operating income to sales ratio.
29. Pinoy Company temporarily has excess production capacity, the idle plant facilities can be used to
manufacture a low-margin item. The low-margin item should be produced if it can be sold for more
than its
A. Fixed costs.
B. Variable costs.
C. Variable costs plus opportunity cost of idle facilities.
D. Indirect costs plus any opportunity cost of idle facilities.
30. An opportunity cost commonly associated with a special order is
A. The variable costs of the order.
B. The contribution margin on lost sales.
C. Additional fixed costs related to the increased output.
D. Any of the above.
PROBLEMS
Use the following information in answering the next item(s):
BLUE EYES CORP. produces a single product. The cost of producing and selling a single unit of this
product at the company's normal activity level of 80,000 units per month is as follows:
Direct materials P37.50
Direct labor P6.00
Variable manufacturing overhead P1.00
Fixed manufacturing overhead P11.50
Variable selling & administrative expense P1.80
Fixed selling & administrative expense P8.00
The normal selling price of the product is P71.10 per unit.
An order has been received from an overseas customer for 1,000 units to be delivered this month at a
special discounted price. This order would have no effect on the company's normal sales and would
not change the total amount of the company's fixed costs. The variable selling and administrative
expense would be P1.50 less per unit on this order than on normal sales.
Direct labor is a variable cost in this company.
1. Suppose there is ample idle capacity to produce the units required by the overseas customer and the
special discounted price on the special order is P63.70 per unit. By how much would this special order
increase (decrease) the company's net operating income for the month?
A. P7,400 C. P18,900
B. (P5,900) D. (P2,100)
2. Suppose the company is already operating at capacity when the special order is received from the
overseas customer. What would be the opportunity cost of each unit delivered to the overseas
customer?
A. P24.80 C. P7.40
B. P6.80 D. P5.30

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3. Suppose there is not enough idle capacity to produce all of the units for the overseas customer and
accepting the special order would require cutting back on production of 400 units for regular
customers. The minimum acceptable price per unit for the special order is closest to:
A. P56.00 C. P71.10
B. P65.80 D. P54.72
4. Listed below are a company’s monthly unit costs to manufacture and market a particular product.
Unit Costs Variable Cost Fixed Costs
Direct materials P2.00
Direct labor 2.40
Indirect Manufacturing 1.60 P1.00
Marketing 2.50 1.50
The company must decide to continue making the product or buy it from an outside supplier. The
supplier has offered to make the product at the same level of quality that the company can make it.
Fixed marketing costs would be unaffected, but variable marketing costs would be reduced by 30% if
the company were to accept the proposal. What is the maximum amount per unit that the company
can pay the supplier without decreasing its operating income?
A. P5.25 C. P7.75
B. P6.75 D. P8.50
5. FERAL IMP CORP. is a multi-product company that currently manufactures 30,000 units of Part QS42
each month for use in production. The facilities now being used to produce Part QS42 have fixed
monthly cost of P150,000 and a capacity to produce 84,000 units per month. If FERAL IMP were to
buy Part QS42 from an outside supplier, the facilities would be idle, but its fixed costs would continue
at 40% of their present amount. The variable production costs of Part QS42 are P11 per unit.
If FERAL IMP is able to obtain Part QS42 from an outside supplier at a unit purchase price of P12.875,
the monthly usage at which it will be indifferent between purchasing and making Part QS42 is
A. 30,000 units. C. 48,000 units
B. 32,000 units. D. 80,000 units
6. FAITH BIRD CORP. has some material that originally cost P74,600. The material has a scrap value of
P57,400 as is, but if reworked at a cost of P1,500, it could be sold for P54,400. What would be the
incremental effect on the company's overall profit of reworking and selling the material rather than
selling it as is as scrap?
A. -P79,100 C. -P4,500
B. -P21,700 D. P52,900
7. FLYING FISH CORP. can sell all the units it can produce of either Plain or Fancy but not both. Plain has
a unit contribution margin of P96 and takes two machine hours to make and Fancy has a unit
contribution margin of P120 and takes three machine hours to make. There are 2,400 machine hours
available to manufacture a product. What should FLYING FISH do?
A. Make Fancy which creates P24 more profit per unit than Plain does.
B. Make Plain which creates P8 more profit per machine hour than Fancy does.
C. Make Plain because more units can be made and sold than Fancy.
D. The same total profits exist regardless of which product is made.
8. FROSTOSAURUS CHEMICAL CORP. manufactures three chemicals (TX14, NJ35, and KS63) from a joint
process. The three chemicals are in industrial grade form at the split-off point. They can either be sold
at that point or processed further into premium grade. Costs related to each batch of this chemical
process is as follows:
TX14 NJ35 KS63
Sales value at split-off point P16,000 P12,000 P5,000
Allocated joint costs P6,000 P6,000 P6,000
Sales value after further processing P20,000 P18,000 P9,000
Cost of further processing P5,000 P3,000 P2,000
For which product(s) above would it be more profitable for FROSTOSAURUS to sell at the split-off
point rather than process further?
A. TX14 only C. TX14 and KS63 only
B. KS63 only D. NJ35 and KS63 only
Use the following information to answer the next item(s):
GATEKEEPER COMPANY makes two products, X and Y, in a joint process. At the split-off point, 60,000
units of product X and 70,000 units of product Y are available each month. Monthly joint production
costs total P200,000. Product X can be sold at the split-off point for P3.20 per unit. Product Y can be
either sold at the split-off point for P2.60 per unit or it can be processed further and sold for P5.80
per unit. If product Y is processed further, additional processing costs of P2.30 per unit will be
incurred.

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CPAR: MS8906_RELEVANT COSTING BATCH MAY 2021
9. If product Y is processed further, rather than being sold at the split-off point, the impact on monthly
operating income should be:
A. P137,000 decrease C. P63,000 increase
B. P245,000 increase D. P244,000 increase
10. What would the unit selling price of product Y need to be at the split-off point in order for
GATEKEEPER to be economically indifferent between selling Y at split-off or processing Y further
before sale?
A. P3.80 C. P3.20
B. P3.50 D. P2.90
11. GAIA CORP. produces a part that has the following costs per unit:
Direct material P9
Direct labor 4
Variable overhead 2
Fixed overhead 6
Total P21
FIERCE KNIGHT INC. can provide the part to GAIA for P23 per unit. GAIA CORP. has determined that
50 percent of its fixed overhead would continue if it purchased the part. However, if GAIA no longer
produces the part, it can rent that portion of the plant facilities for P70,000 per year. GAIA currently
produces 12,000 parts per year. Which alternative is preferable and by what margin?
A. Make-P24,000 C. Buy-P10,000
B. Make-P60,000 D. Buy-P46,000
Use the following information to answer the next item(s):
GEMINI ELF CORP. sells a product for P21 per unit, and the standard cost card for the product shows
the following costs:
Direct material P2
Direct labor 3
Overhead (70% fixed) 10
Total P15
12. GEMINI ELF received a special order for 1,200 units of the product. The only additional cost to
GEMINI ELF would be foreign import taxes of P2 per unit. If GEMINI ELF is able to sell all of the
current production domestically, what would be the minimum sales price that GEMINI ELF would
consider for this special order?
A. P10.00 C. P21.00
B. P15.00 D. P23.00
13. Assume that GEMINI ELF has sufficient idle capacity to produce the 1,200 units. If GEMINI ELF wants
to increase its operating profit by P6,000, what would it charge as a per-unit selling price?
A. P15.00 C. P21.00
B. P17.00 D. P23.00
14. HARPIE LADY CORP. has 3 divisions: A, B, and C. Division A's income statement shows the following
for the year ended December 31:
Sales P1,500,000
Cost of Goods Sold 1,125,000
Gross Profit 375,000
Selling Expenses P125,000
Administrative Expenses 350,000 475,000
Net Loss (P100,000)
Cost of goods sold is 80 percent variable and 20 percent fixed. Of the fixed costs, 50 percent are
avoidable if the division is closed. All of the selling expenses relate to the division and would be
eliminated if Division A were eliminated. Of the administrative expenses, 85 percent are applied from
corporate costs. If Division A were eliminated, HARPY’s income would
A. increase by P100,000. C. decrease by P310,000.
B. decrease by P197,500. D. decrease by P422,500.
15. JUDGE MAN INC. is a manufacturer operating at 95% of capacity. JUDGE MAN has been offered a new
order at P7.25 per unit requiring 15% of capacity. No other use of the 5% current idle capacity can be
found. However, if the order were accepted, the subcontracting for the required 10% additional
capacity would cost P7.50 per unit. The variable cost of production for JUDGE MAN on a per-unit basis
follows:
Materials P3.50
Labor 1.50
Variable overhead 1.50
P6.50
In applying the contribution margin approach to evaluating whether to accept the new order,
assuming subcontracting, what is the average variable cost per unit?
A. P6.83 C. P7.17
B. P7.00 D. P7.25

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16. A company produces and sells three products:
PRODUCTS
C J P
Sales P200,000 P150,000 P125,000
Separable (product) fixed costs 60,000 35,000 40,000
Allocated fixed costs 35,000 40,000 25,000
Variable costs 95,000 75,000 50,000
The company lost its lease and must move to a smaller facility. As a result, total allocated fixed costs
will be reduced by 40%. However, one of its products must be discontinued in order for the company
to fit in the new facility. Because the company's objective is to maximize profits, what is its expected
net profit after the appropriate product has been discontinued?
A. P10,000 C. P20,000
B. P15,000 D. P25,000
17. KOZAKY INC. currently operates two divisions which had operating results last year as follows:
West Troy
Division Division
Sales P600,000 P300,000
Variable costs 310,000 200,000
Contribution margin 290,000 100,000
Traceable fixed costs 110,000 70,000
Allocated common corporate costs 90,000 45,000
Net operating income (loss) P 90,000 (P 15,000)
Since the Troy Division also sustained an operating loss in the prior year, KOZAKY's president is
considering the elimination of this division. Troy Division's traceable fixed costs could be avoided if the
division were eliminated. The total common corporate costs would be unaffected by the decision. If
the Troy Division had been eliminated at the beginning of last year, KOZAKY’s operating income for
last year would have been:
A. P15,000 higher C. P45,000 lower
B. P30,000 lower D. P60,000 higher
18. Product U23N has been considered a drag on profits at LUSTER DRAGON CORP. for some time and
management is considering discontinuing the product altogether. Data from the company's accounting
system appear below:
Sales P730,000
Variable expenses P350,000
Fixed manufacturing expenses P234,000
Fixed selling and administrative expenses P161,000
In the company's accounting system all fixed expenses of the company are fully allocated to products.
Further investigation has revealed that P144,000 of the fixed manufacturing expenses and P93,000 of
the fixed selling and administrative expenses are avoidable if product U23N is discontinued. What
would be the effect on the company's overall net operating income if product U23N were dropped?
A. Overall net operating income would increase by P15,000.
B. Overall net operating income would increase by P143,000.
C. Overall net operating income would decrease by P143,000.
D. Overall net operating income would decrease by P15,000.
19. The MAGICAL GHOST CORP. produces three products. “Tic,” “Tac.”, and “Toc.” The owner desires to
reduce production load to only one product line due to prolonged absence of the production manager.
Depreciation expense amounts to P600,000 annually. Other fixed operating expenses amount to
P660,000 per year. The sales and variable cost data of the three products are (000’s omitted)
Tic Tac Toc
Sales P6,600 P5,300 P10,800
Variable costs 3,900 1,700 8,900
Which product must be retained and what is the opportunity cost of selecting such product line?
A. Retain product “Tac”; opportunity cost is P3.14 million.
B. Retain product “Tac”; opportunity cost is P4.6 million.
C. Retain product “Tic”; opportunity cost is P4.04 million.
D. Retain product “Toc”; opportunity cost is P4.84 million.
20. MEDA BAT CO. makes three products that use compound W, the current constrained resource. Data
concerning those products appear below:
VP YI WX
Selling price per unit P248.04 P230.66 P505.44
Variable cost per unit P190.71 P172.14 P388.80
Centiliters of compound W 3.90 3.80 8.10
Rank the products in order of their current profitability from most profitable to least profitable. In
other words, rank the products in the order in which they should be emphasized.
A. WX, VP, YI C. WX, YI, VP
B. YI, VP, WX D. VP, WX, YI

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21. METAL FISH INC. has only 30,000 hours of machine time each month to manufacture its two
products. Product X has a contribution margin of P60, and Product Y has a contribution margin of P72.
Product X requires 6 hours of machine time, and Product Y requires 10 hours of machine time. If
METAL FISH wants to dedicate 85 percent of its machine time to the product that will provide the
most income, the company will have a total contribution margin of
A. P216,000 C. P287,400
B. P228,600. D. P300,000

22. METEOR DRAGON CORP. purchased a machine 5 years ago for P527,000 when it launched product
M08Y. Unfortunately, this machine has broken down and cannot be repaired. The machine could be
replaced by a new model 310 machine costing P545,000 or by a new model 240 machine costing
P450,000. Management has decided to buy the model 240 machine. It has less capacity than the
model 310 machine, but its capacity is sufficient to continue making product M08Y. Management also
considered, but rejected, the alternative of dropping product M08Y and not replacing the old machine.
If that were done, the P450,000 invested in the new machine could instead have been invested in a
project that would have returned a total of P532,000. In making the decision to invest in the model
240 machine, the opportunity cost was:
A. P545,000 C. P532,000
B. P450,000 D. P527,000
23. MYSTIC CLOWN INC. produces 1,000 units of a part per year which are used in the assembly of one
of its products. The unit cost of producing these parts is:
Variable manufacturing cost P15
Fixed manufacturing cost 12
Total manufacturing cost P27
The part can be purchased from an outside supplier at P20 per unit. If the part is purchased from the
outside supplier, two thirds of the total fixed costs incurred in producing the part can be eliminated.
The annual increase or decrease on the company's operating incomes as a result of buying the part
from the outside supplier would be:
A. P3,000 increase C. P7,000 increase
B. P1,000 decrease D. P5,000 decrease
24. OCUBEAM INC., a manufacturer of computer peripherals, has excess capacity. The company's Utah
plant has the following per-unit cost structure for item no. 89:
Variable manufacturing P40
Fixed manufacturing 15
Variable selling 8
Fixed selling 11
Traceable fixed administrative 4
Allocated administrative 2
The traceable fixed administrative cost was incurred at the Utah plant; in contrast, the allocated
administrative cost represents a "fair share" of OCUBEAM's corporate overhead. Utah has been
presented with a special order of 5,000 units of item no. 89 on which no selling cost will be incurred.
The proper relevant cost in deciding whether to accept this special order would be:
A. P40. D. P80.
B. P59. E. some other amount.
C. P61.
25. OPTICLOPS INC. manufactures A and B from a joint process (cost = P80,000). Five thousand pounds
of A can be sold at split-off for P20 per pound or processed further at an additional cost of P20,000
and then sold for P25. Ten thousand pounds of B can be sold at split-off for P15 per pound or
processed further at an additional cost of P20,000 and later sold for P16. If OPTICLOPS decides to
process B beyond the split-off point, operating income will:
A. increase by P10,000. D. decrease by P20,000.
B. increase by P20,000. E. decrease by P58,000.
C. decrease by P10,000.
26. PALE BEAST CORP. manufactures coolers of 10,000 units that contain a freezable ice bag. For an
annual volume of 10,000 units, fixed manufacturing costs of P500,000 are incurred. Variable costs
per unit amount are direct materials – P80; direct labor – P15, and variable factory overhead – P20
PARROT DRAGON INC. offered to supply the assembled ice bag for P40 with a minimum order of
5,000 units. If Picnic accepts the offer, it will be able to reduce variable labor and overhead by 50%.
The direct materials for the freezable bag will cost Picnic P20 if it will produce it. Considering PARROT
DRAGON offer, PALE BEAST should
A. Buy the freezable bag due to P50,000 advantage.
B. Buy the freezable ice bag due to P150,000 advantage.
C. Produce the freezable ice bag due to P25,000 advantage.
D. Produce the freezable ice bag due to P50,000 advantage.

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Use the following information to answer the next item(s):
PHANTASM INC. has just completed a hydro-electric plant at a cost of P21,000,000. The plant will
provide the company's power needs for the next 20 years. PHANTASM will use only 60% of the power
output annually. At this level of capacity, PHATASM's annual operating costs will amount to
P1,800,000, of which 80% are fixed.
SPIRAL CORP. currently purchases its power from DRAGON CO. at an annual cost of P1,200,000.
PHANTASM could supply this power, thus increasing output of the plant to 90% of capacity. This would
reduce the estimated life of the plant to 14 years.
27. If PHANTASM decides to supply power to SPIRAL, it wants to be compensated for the decrease in the
life of the plant and the appropriate variable costs. PHANTASM has decided that the charge for the
decreased life should be based on the original cost of the plant calculated on a straight-line basis. The
minimum annual amount that PHANTASM would charge SPIRAL would be
A. P450,000. C. P800,000
B. P630,000. D. P990,000.
28. The maximum amount SPIRAL would be willing to pay PHANTASM annually for the power is
A. P600,000. C. P1,050,000.
B. P1,000,000 D. P1,200,000.
29. Tagaytay Open-Air Flea Market is along the highway leading to Taal Vista Lodge. PROTON has a stall
which specializes in hand-crafted fruit baskets that sell for P60 each. Daily fixed costs are P15,000
and variable costs are P30 per basket. An average of 750 baskets are sold each day. PROTON has a
capacity of 800 baskets per day. By closing time, yesterday, a bus load of teachers who attended a
seminar at the Development Academy of the Philippines stopped by PROTON’s stall. Collectively, they
offered PROTON P1,500 for 40 baskets. PROTON should have
A. Rejected the offer since he could have lost P500.
B. Rejected the offer since he could have lost P900.
C. Accepted the offer since he could have P300 contribution margin.
D. Accepted the offer since he could have P700 contribution margin.
30. The QUEEN BIRD INC. is considering dropping its Doombug toy due to continuing losses. Revenue and
cost data on the toy for the past year follow:
Sales of 15,000 units P150,000
Variable expenses 120,000
Contribution margin 30,000
Fixed expenses 40,000
Net operating loss (P 10,000)
If the toy were discontinued, then QUEEN BIRD could avoid P8,000 per year in fixed costs. Also, if the
Doombug toy is dropped, the production and sale of other QUEEN BIRD toys would increase so as to
generate a P16,000 increase in the contribution margin received from these other toys. At what
selling price per Doombug should QUEEN BIRD be indifferent (on economic grounds) between
dropping the Doombug or continuing its production and sale? (All other conditions remain the same,
including annual sales of 15,000 units of the Doombug toy.)
A. P8.33 C. P9.60
B. P9.25 D. P10.70
- END OF HANDOUTS -

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