Mas Second PB 03-11
Mas Second PB 03-11
3. Management accounting
a. is governed by GAAP
b. draws from disciplines other than accounting
c. is geared primarily to the past rather than the future
d. is designed for external reporting
12. Between the beginning and the end of the year, the inventory
level
a. increased by 4,500 units
b. decreased by 4,500 units
c. increased by 3,000 units
d. decreased by 3,000 units
14. The number of units in the ending inventory must have been?
a. 22,000 b. 10,000 c. 6,000 d. 4,000
15. How many units did the company produce during the year?
a. 8,200 b. 8,800 c. 11,200 d. 11,800
16. What is the expected total utility cost if the company works
13,000 machine hours?
a. P4,225 b. P5,200 c. P4,000 d. P3,250
Larson Co. used the high-low method to derive the cost formula for
electrical power cost. According to the cost formula, the variable cost
per unit of activity is P3 per machine hour. Total electrical power cost
at the high level of activity was P7,600 and at the low level of
activity was P7,300. The high level of activity used was 1,200 machine
hours.
Sales for a retail shop were P250,000. Net income totaled P30,000
and cost of goods sold was P110,000. Total contribution margin was
P100,000.
The cost of goods sold in the Marin Co.’s retail shop totaled
P325,000. Fixed selling and administrative expenses totaled P115,000 and
variable selling and administrative expenses were P210,000. Contribution
margin totaled P590,000.
22. Tirso would expect to incur total factory overhead costs of:
a. P50,000 b. P60,000 c. P62,500 d. P72,500
Shipping cost at Junk Co. is a mixed cost with variable and fixed
components. Past records indicate total shipping cost was P18,000 for
16,000 pounds shipped and P22,500 for 22,000 pounds shipped. The company
expects to ship 18,000 pounds next month,
Scotty Company has two divisions, A and B. The following data were
presented for the previous month:
Division A Division B
Sales P50,000 P75,000
Variable cost ratio 70% 60%
Segment margin P 7,000 P 7,500
The Tip Division of Dudley Company reported the following data last
year:
Return on investment 20%
Minimum ROR 12%
Residual income P50,000
29. How much is the average operating assets last year?
a. P625,000 b. P250,000 c. P416,677 d. 333,333
30. How much was the division’s net operating income last year?
a. P250,000 b. P125,000 c. P100,000 d. P75,000
E’s expected sales for June are P150,000. How much cash will E Co.
35. Volkers Hospitals has provided you with the following budget
information for April:
Cash collections P876,000
April cash balance 23,000
Cash disbursements 978,600
39. The Home Co. is planning its operations form the month of
March. The following estimates for the month were submitted:
Cash payment for merchandise in March P180,000
Inventory, March 1 60,000
Inventory, March 31 20,000
Trade accounts payable, March 1 100,000
Trade accounts payable, March 31 120,000
If the gross profit rate is 40% of sales, how much is the budgeted
sales for March?
a. P300,000 b. P400,000 c. P540,000 d. P600,000
40. Bridge Co. has budgeted sales for 100,000 units of its
product for the year. Expected unit cost based on past experience
should be P60 for direct materials, P40 for direct labor, and P30
for factory overhead. Assume that there is no work-in-process
inventory. The company begins the year with 40,000 finished units
on hand and budgeted the ending finished goods inventory at only
10,000 units. What is the budgeted production cost for the year?
a. P700,000 b. P1,900,000 c. P9,100,000 d.
P16,900,000
41. Midas Co. had a cost of goods sold budget for the quarter of
P210,000.
Additional data are as follows:
Finished goods, beginning P38,000
Finished goods, ending 41,000
Factory overhead budget 63,000
Direct labor cost budget 58,000
No work in process inventories
43. The actual direct labor hours were 4,000. The standard
variable overhead rate is P2.50 per hour. The actual variable
overhead was P10,400. The spending variance:
a. was P800 unfavorable c. was P800 favorable
b. was P400 unfavorable d. was P500 unfavorable
44. The following information in presented to you by Jane
Company:
Standard quantity Standard price
or hours or rate
Direct labor 3 hours P 5.00
Variable overhead 3 hours P 6.00
During the month, 6,800 hours of labor were used to produce 2,200
units of product. The actual variable overhead costs were P39,984.
45. The following average times were recorded for one unit of
product:
Process time 3.00 days
Inspection time 0.50 days
Move time 0.25 days
Queue time 0.25 days
Wait time from start to completion of product 6.0 days
46. The standard hours for direct labor are 3 hours. The
standard rate per hour is P5.00. During the month, 7,000 hours of
labor were used at P4.80 per hour to produce 2,200 units of
product. An entry to record usage of direct labor will include
(but not be limited to):
52. The BLACK CORP.'S plant manager does not know what to do
with 15,000 units of defective product on stock which costs the
company P40,000 to produce. There are two proposals submitted for
this consideration:
1. Sell the product as a scrap for P2.50 per unit, or. . .
2. Rework the units at a cost of P35,000 and sell the product
for P7.50 per unit
The net advantage or disadvantage to the company if proposal No. 2,
(rework the units) is followed is:
a. P32,500 advantage
b. P70,000 disadvantage
c. P35,000 disadvantage
d P37,500 advantage
53. KXM Bottling Corporation makes and sell two soft drinks,
COLA and ORANGE.
The comparative data for the two shows:
Cola Orange
Selling price, per bottle P9.50 P9.80
Variable cost 6.5 7.20
Production capacity per 250 bottles 300 bottles
hour
There are 500 available production hours per month. Based on the
above information.
a. ORANGE and COLA’s unit contribution margin is the same hence it
is equally profitable to produce either.
b. It is more profitable to produce ORANGE.
c. COLA’s contribution margin is higher than that of ORANGE hence
more profitable to produce.
d. It is more profitable to produce COLA.
56. Sagaysay Co. makes and sales brushes and combs. It can sell
all of either product it can make. The following data are
pertinent to each respective product:
Brushes Combs
Units of output/machine hour 8 20
Selling price per unit P12.00 P4.00
Direct materials 1.00 1.20
Direct labor 2.00 0.10
Variable overhead 0.50 0.05
Total fixed overhead is P380,000.
57. Arm Co. has 15,000 units in inventory that had a production
cost of P3 per unit. These units cannot be sold through normal
channels due to significant technology change. These units could
be reworked at a total cost of P23,000 and sold for P28,000.
Another alternative is to sell the units to a junk dealer for
P8,500. The relevant cost for Arm to consider in making its
decision is
a. P45,000 of original product costs
b. P23,000 for reworking the units
c. P68,000 for reworking the units
d. P28,000 for selling the units to the junk dealer
P37,600 of the costs and expenses above are fixed of which P21,600
is unavoidable regardless of whether the product will be dropped or not
Mulder Co. has offered to sell Scully 5,000 units of Part 20 for
P19 a unit. Scully has determined that it could use the facilities
presently used to manufacture Part 20 to manufacture Product X and
generate an operating profit of P4,000. Scully has also determined that
two thirds of the fixed overhead applied will continue even if Part 20
is purchased from Mulder. To determine whether to accept Mulder’s offer,
the net relevant manufacturing costs to Scully are:
a. P70,000 b. P80,000 c. P90,000 d. P95,000
60. Kai Co. produces 1,000 units of Part X per month. The total
manufacturing costs of the part are as follows:
Direct materials P10,000
Direct labor 5,000
Variable overhead 5,000
Fixed overhead 30,000
63. DEF Company is a retailer for video disks. The projected net
income for the current year is P200,000 based on sales volume of
200,000 video disks. DEF has been selling the disk for P16 each.
The variable cost consist of P10 unit purchase price of the disks
and handling cost of P2 per disk. DEF’s annual fixed costs are
P600,000. Management is planning for the coming year and it
expects that the unit purchase price of the video disks will
increase 30 percent. (Ignore income taxes)
What is the company’s break-even point for the current year in number of
video disks?
a. 152,000 c. 155,000
b. 150,000 d. 140,000