MA REV 1 Finals Dec 2017

1 pts
Which of the following is the least accurate method for splitting a semi-variable
expense?
High and low point method
scatter graph
least squares method
variable costing
1 pts
The company provided you with the following flexible budget of factory overhead at
three different capacity levels:
Capacity Factory Overhead

60% P98,000
70% P106,000
85% P118,000
What will be the flexible budget of factory overhead at 95% capacity?

P112,000
P126,000
P116,000
P122,000
1 pts
The following information is found in the scatter chart constructed by accountant of
Pasiklab Company: Independent variable, P1,000,000; Slope of the line, 0.55; Y-axis
intercept, P7,500. Based on the above date, what is the estimated cost?
P250,000
P257,500
P1,000,000
P557,500
1 pts
The following cost data for different hours of operations are made available to you by
the company for your analysis:
Number of months 4
Sum of hours 1,400
Sum of costs 10,000
Sum of hours x costs 3,600,000
Sum of hours squared 510,000
How much is the fixed cost per year?
P318.00
P350.00
P750.00
P420.00
1 pts
As volume decreases,
Total fixed costs remain constant and per-unit fixed costs decrease
Total fixed costs remain constant and per-unit fixed costs remain constant
Total fixed costs remain constant and per-unit fixed costs increase
Total fixed costs increase and per-unit fixed costs increase
1 pts
Total production costs of prior periods for a company are listed below. Assume that the
same cost behavior patterns can be extended linearly over the range of 3,000 to 35,000
units and that the cost driver for each product is the number of units produced.
Production per
month (units) 3,000 9,000 16,000 35,000
Product x P23,700 P52,680 P86,490 P178,260
Product y P47,280 P141,840 P252,160 P551,600
What is the average cost per unit at a production level of 6,000 units for product X?
P5.98
P7.90
P6.36
P4.83
1 pts
The corporation sells set of encyclopedias. It sold 4,000 sets last year at P250 a set. If
the variable cost per set was P125, and the fixed costs for the company were P100,000,
What is the company’s degree of operating leverage (DOL)?
3.0
1.75
1.5
1.25
1 pts
The company is planning to produce two products, A and B. The company is planning to
sell 100,000 units of A at P4 a unit and 200,000 units of B at P3 per unit. Variable cost
is 70% of sales for A and 80% of sales for B. In order to realize a total profit of
P160,000, what must the total fixed cost be?
600,000
80,000
90,000
240,000
1 pts
Machine X has fixed costs of P225,000 and a variable cost of P20. Machine Y has fixed
costs of P300,000 and a variable costs of P14. What is the indifference point, in units?
15,000
11,250
12,500
cannot be determined.
1 pts
The percentage change in earnings before interests and taxes associated with the
percentage change in sales volume in the degree of _________.
breakeven leverage
operating leverage
financial leverage
combined leverage.
1 pts
Given the following data:
200G 200F
Sales P231,525 P225,000
Cost of sales 123,725 125,000
Gross profit 107,800 100,000
You have learned that volume decreased by 2% in 200G.

What was the sales volume variance?
P4,500 U
P4,500 F
P2,000 U
P2,000 F
1 pts
Given the following data:
200G 200F
Sales P231,525 P225,000
Cost of sales 123,725 125,000
Gross profit 107,800 100,000
You have learned that volume decreased by 2% in 200G.

What was the combined sales price and cost price variance?
P4,000 F
P9,800 F
P10,000 F
P11,025 F
1 pts
The accountant of Easy Traders provided you with the following comparative
information regarding the 2 products being sold by the company:
200C 200D
Product A Product B Product A Product B
Quantity sold 2,000 8,000 2,400 7,850
Selling price 18.00 15.00 16.00 16.00
Cost price 12.00 10.00 11.50 10.50
The sales volume variance is ______________.

P1,250 F
P1,300 F
P1,350 U
P1,400 F
1 pts
The accountant of Easy Traders provided you with the following comparative
information regarding the 2 products being sold by the company:
200C 200D
Product A Product B Product A Product B
Quantity sold 2,000 8,000 2,400 7,850
Selling price 18.00 15.00 16.00 16.00
Cost price 12.00 10.00 11.50 10.50
The sales mix variance is __________.

P450 F
P250 U
P350 U
P350 F
1 pts
The company had the following results in June:
Actual Planned
Sales P68,900 P70,000
Variable cost 38,500 40,000
Contribution margin 30,400 30,000
Planned sales were 10,000 units, actual sales were 9,700 units. The sales price
variance is ________.
P1,000 F
P400 F
P900 U
P1,100 U
1 pts
The primary difference between absorption costing and variable costing is in the
treatment of fixed overhead. How is fixed overhead treated under each method?
Absorption costing, inventoriable cost; Variable costing, inventoriable cost
Absorption costing, inventoriable cost; Variable costing, period cost
Absorption costing, Period cost; Variable costing, period cost
Absorption costing, period cost; Variable costing, inventoriable cost.
1 pts
The following information of Kupit Manufacturing Company for the month of July:
Prime costs P70,000
Coversion costs 104,000
Direct labor 48,000
Fixed overhead 30,000
Variable operating costs 9,600
Fixed operating costs 15,000
Financing costs 1,500
Production (units) 5,000
Sales units 4,000
What are the production costs per unit under the full costing method?
P25.20
P27.20
P31.50
P22.50
1 pts
The following information of Kupit Manufacturing Company for the month of July:
Prime costs P70,000
Coversion costs 104,000
Direct labor 48,000
Fixed overhead 30,000
Variable operating costs 9,600
Fixed operating costs 15,000
Financing costs 1,500
Production (units) 5,000
Sales units 4,000
What are the production costs per unit under the direct costing method?
P19.20
P22.10
P21.20
P26.50
1 pts
The following information was provided by the company:
Prime costs P45,000 ( 5,000 units
produced)
Variable factory overhead 15,000
Fixed factory overhead 40,000
Variable expenses 30,000 (4,000 units
sold)
Fixed expenses 20,000
What is the cost of the ending inventory under absorption costing?

P20,000
P30,000
P18,000
P12,000
1 pts
The following information was provided by the company:
Prime costs P45,000 ( 5,000 units
produced)
Variable factory overhead 15,000
Fixed factory overhead 40,000
Variable expenses 30,000 (4,000 units
sold)
What is the cost of the ending inventory using direct costing?

P18,000
P20,000
P30,000
P12,000
1 pts
Nikki Corporation’s variable and fixed production costs are P8 and P5,
respectively. During the month 12,000 units were produced and 10,000 units were
sold. There was no beginning inventory.
What would happen to ending inventory if the variable costing were used instead of
absorption costing?
P16,000 increase
P16,000 decrease
P10,000 increase
P10,000 decrease
1 pts
Noynoy Company incurred the following costs:
Sales P600,000
Variable production costs 450,000 (15,000 units)
Fixed production costs 60,000
Variable expenses 96,000 (12,000 units)
How much was the manufacturing margin?

P240,000
P192,000
P180,000
P144,000
1 pts
Noynoy Company incurred the following costs:
Sales P600,000
Variable production costs 450,000 (15,000 units)
Fixed production costs 60,000
Variable expenses 96,000 (12,000 units)
How much was the manufacturing profit?

P180,000
P144,000
P39,000
P192,000
1 pts
"Management by Exception" in relation to standard costing means ______.
Only large favorable variances need to be investigated.
Only large variances need to be investigated.
Only large adverse variances need to be investigated.
Only small variances need to be investigated.
1 pts
Shown below are the budgets for two capacity levels:
Normal Capacity Maximum Capacity
Percent of capacity 62.5% 100%
Production (units) 5,000 8,000
Direct labor hours 6,250 10,000
Variable overhead P18,750 P30,000
Fixed overhead P20,000 P20,000
The company operated at 70% capacity using 6,380 hours at a total overhead cost of
P41,250.
The controllable variance and volume variance are _____________.
Controllable, P250 favorable; Volume, P2,400 favorable
Controllable, P250 unfavorable; Volume, P2,400 favorable
Controllable, P250 unfavorable; P2,400 unfavorable
Controllable, P2,400 favorable; Volume, P250 unfavorable
1 pts
Mabuhay Company is using a standard cost system. Shown below are the direct labor
costs for the month of June:
Actual (1,200 hours @ P30)
Standard (1,000 hours @ P20)
Unfavorable labor cost variance
Which of the following analysis is correct?

Labor efficiency variance (200 x 30) P 6,000
Labor rate variance (10 x 1,000) 10,000
------------
Unfavorable labor cost variance P16,000
=======
Labor efficiency variance (200 x 20) P 4,000
Labor rate variance (10 x 1,200) 12,000
------------
=======
Labor efficiency variance (10x1,000) P10,000
Labor rate variance (200 x 30) 6,000
-----------
=======
Labor efficiency variance (10 x 1,200) P12,000
Labor rate variance (200 x 20) 4,000
------------
======
1 pts
The standard mix of product “Sarap” is as follows:
Material A- 20 lbs. @P3 = P 60
B- 30 lbs. @P4 = P 120
C- 50 lbs. @P5 = P 250
100 lbs. P 430
20 lbs. Normal loss
80 lbs. P 430
During May, 7, 150 lbs. of product “Sarap” were produced with the following costs:
Material A- 1,810 lbs. P 5,520.50
B- 2,650 lbs. 10,547.00
C- 4,530 lbs 22,695.30
8,990 lbs 38,762.80
What was the materials mix variance?

P23 U
P56 F
P36 U
P20 U
1 pts
The standard mix of product “Sarap” is as follows:
Material A- 20 lbs. @P3 = P 60
B- 30 lbs. @P4 = P 120
C- 50 lbs. @P5 = P 250
100 lbs. P 430
20 lbs. Normal loss
80 lbs. P 430
During May, 7, 150 lbs. of product “Sarap” were produced with the following costs:
Material A- 1,810 lbs. P 5,520.50
B- 2,650 lbs. 10,547.00
C- 4,530 lbs 22,695.30
8,990 lbs 38,762.80
What was the materials yield variance?

P225.57 F
P225.75 U
P275.52 U
P227.52 U
1 pts
Provided the following budget for overhead:
80% 100% 120%
Production (in units) 80,000 100,000 120,000
Direct Labor Cost 20,000 25,000 30,000
Budgeted factory overhead
Fixed P 60,000 P 60,000 P 60,000
Variable 32,000 40,000 48,000
P 92,000 P 100,000 P 108,000
Because of the economic slowdown brought about by the global crisis, the company
expects to operate below normal capacity only for the month of May.
Actual results for May showed the following:
Actual factory overhead incurred:
Fixed P 55,000
Variable 25,000
Total P 80,000
Actual units produced 70,000
Actual direct labor hours used 18,000
What is the total overhead cost variance for the month of May?
5,000 F
5,000 U
10,000 F
10,000 U
1 pts
80% 100% 120%
Fixed P 60,000 P 60,000 P 60,000
Variable 32,000 40,000 48,000
P 92,000 P 100,000 P 108,000
Fixed P 55,000
Variable 25,000
Total P 80,000
What is the total variable overhead variance for May ?

P1,000 U
P2,000 F
P3,000 U
P3,000 F
1 pts
80% 100% 120%
Fixed P 60,000 P 60,000 P 60,000
Variable 32,000 40,000 48,000
P 92,000 P 100,000 P 108,000
Fixed P 55,000
Variable 25,000
Total P 80,000
What is the total fixed overhead variance for May ?

P5,000 U
P5,000 F
P13,000 F
P13,000 U
1 pts
80% 100% 120%
Fixed P 60,000 P 60,000 P 60,000
Variable 32,000 40,000 48,000
P 92,000 P 100,000 P 108,000
Fixed P 55,000
Variable 25,000
Total P 80,000
Using two-way analysis, what is the overhead volume variance for May ?
P20,000 U
P18,000 U
P15,000 F
P10,000 U
1 pts
80% 100% 120%
Fixed P 60,000 P 60,000 P 60,000
Variable 32,000 40,000 48,000
P 92,000 P 100,000 P 108,000
Fixed P 55,000
Variable 25,000
Total P 80,000
Using three-way analysis, what is the overhead spending variance for May ?
P8,800 F
P3,800 F
P8,000 F
P10,000 U
1 pts
80% 100% 120%
Fixed P 60,000 P 60,000 P 60,000
Variable 32,000 40,000 48,000
P 92,000 P 100,000 P 108,000
Fixed P 55,000
Variable 25,000
Total P 80,000
Using four-way analysis, what is the variable overhead efficiency variance for May?
P2,000 U
P800 F
P800 U
P1,200 F
1 pts
80% 100% 120%
Fixed P 60,000 P 60,000 P 60,000
Variable 32,000 40,000 48,000
P 92,000 P 100,000 P 108,000
Fixed P 55,000
Variable 25,000
Total P 80,000
Using four-way analysis, what is the fixed overhead efficiency variance for May ?
P2,000U
P1,200F
P800U
P800F
1 pts
80% 100% 120%
Fixed P 60,000 P 60,000 P 60,000
Variable 32,000 40,000 48,000
P 92,000 P 100,000 P 108,000
Fixed P 55,000
Variable 25,000
Total P 80,000
Using four-way analysis, what is the overhead capacity variance for May ?
P16,800U
P16,800 F
P16,000 U
P18,600 U
1 pts
80% 100% 120%
Fixed P 60,000 P 60,000 P 60,000
Variable 32,000 40,000 48,000
P 92,000 P 100,000 P 108,000
Fixed P 55,000
Variable 25,000
Total P 80,000
What is the total overhead efficiency variance for May ?

P800 U
P800 F
P1,200 F
P2,000 U
1 pts
80% 100% 120%
Fixed P 60,000 P 60,000 P 60,000
Variable 32,000 40,000 48,000
P 92,000 P 100,000 P 108,000
Fixed P 55,000
Variable 25,000
Total P 80,000
What is the variable overhead spending variance for May ?
P3,800 F
P2,800 F
P5,000 F
P8,800 F
1 pts
80% 100% 120%
Fixed P 60,000 P 60,000 P 60,000
Variable 32,000 40,000 48,000
P 92,000 P 100,000 P 108,000
Fixed P 55,000
Variable 25,000
Total P 80,000
What is the fixed overhead spending variance for May ?

P3,800 F
P2,800 F
P5,000 F
P8,800 F
1 pts
The following cost data for maintenance costs at different hours of operations are
submitted to you by the accountant of ET Manufacturing Company for your analysis:
Number of months observed 10
Sum of hours 350
Sum of costs 1,000
Sum of hours x costs 39,200
Sum of hours squared 14,250
How much is the fixed maintenance cost per month?
P26.50
P30.10
P35.00
P36.10
1 pts
A company has the following cost components for 100,000 units for the year:
Raw materials P 200,000
Direct labor 100,000
Manufacturing overhead 200,000
Selling/ Administrative expense 150,000
All costs are variable except for P100,000 of manufacturing overhead and P100,000 of
selling and administrative expenses. The total costs to produce and sell 110,000 units
for the year are ____________.
P540,000
P650,000
P695,000
P715,000
1 pts
Which of the following is an example of classifying costs by their behavior?
Direct and indirect
Fixed and variable
Relevant and irrelevant
Controllable and non-controllable
1 pts
Which of the following is the most accurate method for splitting semi-variable expense?
high and low point
least squares
scatter graph
linear programming
1 pts
Total production costs for SPG Company are budgeted at P230,000 for 50,000 units of
budgeted output and at P280,000 for 60,000 units of budgeted output. Because of the
need of additional facilities, budgeted fixed costs for 60,000 units are 25% more than
budgeted fixed costs for 50,000 units. How much is SPG’s budgeted variable cost per
unit of output?
P5.00
P3.00
P1.67
P1.60
1 pts
Simple regression analysis involves the study of how many variables?
One
Two
Two or more
Three or more
1 pts
A company is concerned about its operating performance, as summarized below:
Sales (P 12.50 per P 300,000
unit)
Variables costs 180,000
Net operating loss (20,000)
How many additional units should have been sold in order for the company to break-
even?
8,000
16,000
40,000
32,000
1 pts
A company has a sales of P500,000 variable costs of P300,000 and pretax profit of
P150,000. If the company increased the sales price per unit by 10%, reduced fixed
costs by 20%, and left variable cost per unit unchanged, what would be the new
breakeven point in sales peso?
P125,000
P100,000
P110,000
P88,000
1 pts
The James Band is holding a concert in Music Museum. Fixed costs relating to staging
a concert are P290,000. Variable costs per patron are P15.00. The selling price for a
ticket is P25.00. The James Band has sold 33,000 tickets so far.
At the current level of sales, what is the margin of safety in pesos?
P87,500
P137,500
P100,000
P180,000
1 pts
Jacob Company, which is subject to 40% income tax rate, had the following operating
data for the period just ended:
Selling price per unit P60
Variable cost per unit P24
Fixed costs P404,000
Management plans to improve the quality of its sole product by way of implementing the
following changes:
Replacing a component that costs P3.50 with a higher-grade unit that costs P7.50, and
Acquiring a P600,000 packaging machine. Jacob will depreciated the machine over a
10-year period with no estimated salvage value by the straight-line method of
depreciation.
If the company wants to earn after-tax of P172,800 in the coming year, it must sell
________.
10,300 units
22,500 units
23,500 units
27,000 units
1 pts
How many of the following statements is(are) correct?
In regression analysis, all variables are dependent on one another.
In regression analysis, all the variables are independent of one another.
In regression analysis, there must be one dependent variable and one or more
independent variables.
In regression analysis, there must be one independent variable and one or
more dependent variables.
one
two
three
four
1 pts
Contribution margin ratio multiplied by the break-even peso sales equals __________.
net profit
variable cost
fixed cost
margin of safety.
1 pts
Which of the following is the excess of sales over the variable costs?
fixed cost
contribution margin
net profit
margin of safety.
1 pts
Which of the following is the correct calculation of the margin of safety?
sales less variable cost
sales less break-even sale
contribution margin less fixed cost.
net profit plus fixed costs.
1 pts
A firm is said to break-even when it is
Contribution margin is equal to the fixed costs.
Margin of safety is zero.
Sales revenue is equal to the total costs.
All of the given.
1 pts
A company controls its cost by comparing the actual costs with the standard costs. Any
significant deviations are investigated. The technique that is most probably being used
is ______________.
correlation analysis
variance analysis
sensitivity analysis
risk analysis
1 pts
Which of the following computations for the materials variance is not used?
Actual quantity x actual price
Actual quantity x standard price
Standard quantity x actual price
Standard quantity x standard price
1 pts
A credit balance in the materials price variance indicates that
Actual price exceeds standard price
Standard price exceeds actual price
Standard quantity exceeds actual quantity
Actual quantity exceeds standard quantity
1 pts
Data provided by the company:
200F 200G
Sales P43,200 P44,200
Cost of sales 24,000 20,800
Gross profit 19,200 23,400
Quantity sold 2,400 ?
Selling price ? 17.00
What was the effect on gross profit of the change in volume?

P1,600 favorable
P1,600 unfavorable
P3,600 favorable
P5,200 unfavorable
1 pts
200F 200G
Sales P43,200 P44,200
What was the effect on gross profit of the change in sales price?
P2,600 U
P2,600 F
P2,340 F
P5,200 U
1 pts
200F 200G
Sales P43,200 P44,200
What was the effect on gross profit of the change in cost in cost price?
P2,400 F
P2,500 F
P4,160 U
P5,200 F
1 pts
The following information is available for Company Marilao for the month of June. The
company is using a standard cost system.
Actual variable overhead P6,750
Standard hours allowed 1,515
Standard fixed overhead rate P3 per hour
Standard variable overhead rate P4 per hour
Overhead volume variance P75 favorable
What is the overhead controllable variance and how many hours are budgeted at
normal capacity ___________.
Controllable variance, P6990 unfavorable; Normal hours, 1,490
Controllable variance, P690 favorable; Normal hours, 1,500
1 pts
How are the following used in the calculation of the dividend payout ratio?
Dividend/share, denominator; Earning/share, numerator; Book value/share, not used
Dividends/share, denominator; Earning/share, not used; Book value/share, numerator
Dividends/share, numerator; Earning/share, denominator; Book value/share, not used
Dividends/share, numerator; Earning/share, not used; Book value/share, denominator
1 pts
A financial analyst submitted the following information:
Net current assets P128,000
Non-quick assets 246,080
Current ratio 2.25
What is the acid-test ratio?

1.50
1.80
2.00
2.25
1 pts
The shareholders’ equity section of the balance sheet of Buking Company as at
December 31, 200F is reproduced below.
12% cumulative, non-participating preference share
capital, par P50 P400,000
Ordinary share capital, P20 520,000
Ordinary share premium 15,000
Retained earnings 180,000
Ordinary treasury shares (1,000 shares at cost (35,000)
Total Shareholders’ Equity P1,080,000
No dividends were declared last year and the current year.

What is the book value per preference share?
P62.00
P60.00
P56.00
P50.00
1 pts
The shareholders’ equity section of the balance sheet of Buking Company as at
December 31, 200F is reproduced below.
12% cumulative, non-participating preference share
capital, par P50 P400,000
Ordinary share capital, P20 520,000
Ordinary share premium 15,000
Retained earnings 180,000
Ordinary treasury shares (1,000 shares at cost (35,000)
Total Shareholders’ Equity P1,080,000
No dividends were declared last year and the current year

What is the book value per ordinary share?
P20.00
P22.46
P23.36
P23.63
1 pts
Trixy Corporation wants to maintain a current ratio of 3:1. At present, the current ratio is
3:5:1 with current liabilities of P600,000.
How much short-term borrowings must be made to meet the desired current ratio?
P100,000
P120,000
P125,000
P150,000
1 pts
In responsibility accounting, a center’s performance is measured by controllable
costs. Controllable costs are best describe as including ___________.
Direct material and direct labor only
Only those costs that the manager can influence in the current time period
Only discretionary costs
Those costs about which the manager is knowledge and informed
1 pts
Mathew’s inventory decreased during the year. On the basis of this information, income
reported under absorption costing ___________________.
Will be the same as that reported under variable costing
Will be higher than that reported under variable costing
Will be lower than that reported under variable costing
Will differ from that reported under variable costing, the direction of which cannot be
determined from the information given
1 pts
Which of the following is NOT a type of absorption costing?
Direct costing.
Actual costing.
Normal costing.
None of the above.
1 pts
Variable costing is UNACCEPTABLE for
managerial accounting.
financial accounting.
transfer pricing.
reporting by product lines for internal purposes.
1 pts
A criticism of variable costing for managerial accounting purposes is that it ______.
is not acceptable for product line segmented reporting.
does not reflect cost-volume-profit relationships.
overstates inventories.
might encourage managers to emphasize the short term at the expense of the long
term.
1 pts
Variable costing and absorption costing will show the same incomes when there are no
__________.
beginning inventories.
ending inventories.
variable costs.
beginning and ending inventories.
1 pts
Cascade Company, which has a P3 standard cost per unit and budgeted production at
1,000 units, actually produced 1,200 units. Total standard cost for the period is
_________.
P3,000.
P3,600.
an amount that cannot be determined without knowing the variances for the period
none of the above.
1 pts
Which variance is LEAST likely to be affected by hiring workers with less skill than those
already working?
Material use variance.
Labor rate variance.
Material price variance.
Variable overhead efficiency variance.
1 pts
Which variance is MOST likely to be affected by buying a more expensive material that
produces less waste and is easier to handle?
Labor rate variance.
Variable overhead spending variance.
Direct labor efficiency variance.
Fixed overhead budget variance.
1 pts
Filter Company's budget for overhead costs is:
total overhead cost = P50,000 + (P4 x direct labor hours)
Standard direct labor time is 1.5 hours per unit of product. The standard wage rate is
P6 per hour. Standard variable overhead cost for a unit of product is __________.
P4.00.
P6.00.
P9.00.
P10.00.
1 pts
The major variance used in controlling fixed costs is the ____________,
efficiency variance.
budget variance.
use variance.
none of the above.
1 pts
Scottso Enterprises has fixed costs of P120,000. At a sales volume of P400,000, return
on sales is 10%; at a P600,000 volume, return on sales is 20%. What is the break-even
volume?
P160,000
P210,000
P300,000
An amount that cannot be determined without more information.
1 pts
Samson Inc. has a contribution margin percentage of 35%. If fixed costs are P630,000,
what is the break-even point?
P 220,500
P 409,500
P 969,231
P1,800,000
1 pts
An investment opportunity costing P100,000 is expected to yield net cash flows of
P22,000 annually for seven years. The payback period of the investment is _____.
0.22 years.
3.08 years.
4.55 years.
some other number.
1 pts
An investment opportunity costing P150,000 is expected to yield net cash flows of
P36,000 annually for six years. The NPV of the investment at a cutoff rate of 12% would
be ___________.
P(2,004).
P2,004.
P150,000.
P147,996.
1 pts
Under variable costing, the company's net operating income for the year would be:
P60,000 higher than adsorption costing
P108,000 higher than under adsorption costing
P108,000 lower than under absorption costing
P60,000 lower than under absorption costing
1 pts
A cost that would be included in product costs under both absorption costing and
variable costing would be:
Supervisory salaries
Variable manufacturing costs
Equipment depreciation
Variable selling expenses
1 pts
Which of the following costs at a manufacturing company would be treated as a product
cost under the absorption costing method?
Sales commissions
Advertising costs
Fire insurance cost on factory building
All of these
1 pts
Assuming that direct labor is a variable cost, product costs under variable costing
include only ___________.
Direct materials and direct labor
Direct materials, direct labor, and variable manufacturing overhead
Direct materials, direct labor, variable manufacturing overhead, and variable
selling and administrative expenses.
Direct material, variable manufacturing overhead, and variable selling and
administrative expenses
1 pts
Mango Corporation produces and sells a single product. Data concerning that product
appear below:
Per Unit Percent of Sales
Selling price P200 100%
Variable expenses 80 40
Contribution Margin P120 60%
Fixed expenses are P898,000 per month. The company is currently selling 9,000 units
per month. The marketing manager would like to introduce sales commissions as an
incentive for the sales staff. The marketing manager has proposed a commission of P16
per unit. In exchange, the sales staff would accept a decrease in their salaries of
117,000 per month. (This is the company's savings for the entire sales staff.) The
marketing manager predicts that introducing this sales incentive would increase monthly
sales by 100 units. What should be the overall effect on the company's monthly net
operating income of this change?
increase of P115,400
decrease of P16,600
decrease of P150,600
increase of P1,063,400
1 pts
For which of the following decisions are sunk costs relevant?
the decision to keep an old machine or buy a new one.
the decision to sell a product at split-off point or after further processing.
the decision to accept or reject a special offer
all of theses
none of these
1 pts
The opportunity cost of making a component part in a factory with excess capacity for
which there is no alternative use is:
the variable manufacturing cost of the component
the total manufacturing cost of the component
the fixed manufacturing cost of the component
zero
1 pts
Allocated common fixed costs:
can make a product line appear to be unprofitable.
are always incremental costs.
are always relevant in decisions involving dropping a product line.
responses A,B, and C are all correct.
1 pts
Consider a decision facing a company of either accepting or rejecting a special offer for
one of its products. A cost that is not relevant is:
direct materials
variable overhead
fixed overhead that will be avoided if the special offer is accepted.
common fixed overhead that will continue if the special offer is not
accepted
1 pts
A study has been conducted to determine if one of the departments in Chanel Company
should be discontinued. The contribution margin in the department is P50,000 per year.
Fixed expenses charged to the department are P65,000 per year. It is estimated that
P40,000 of these fixed expenses could be eliminated if the department is discontinued.
These data indicate that if the department is discontinued, the company's overall net
operating income would:
decrease by P25,000 per year
increase by P25,000 per year
decrease by P10,000 per year
increase by P10,000 per year
1 pts
Loui Vitton Corporation makes three products that use compound W, the current
constrained resource. Data concerning those products appear below:
A B C
Selling price P150.25 P225.36 P84.84
Variable cost per unit 122.25 162.36 65.66
Centiliters of compound W 2.50 3.60 1.40
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.
B, A, C
A, C, B
C, A, B
B, C, A
1 pts
The total-cost approach and the incremental-cost approach to evaluating two
competing investment opportunities:
are dissimilar in that one deals with net present value and the other deals with internal
rate of return.
are similar in that they will recommend the same alternative as the best.
are dissimilar in that one uses the cost of capital as a discount rate and the
other does not.
are similar in that neither considers the time value of money.
1 pts
The payback method measures:
how quickly investment peso may be recovered.
the cash flow from an investment
the economic life of an investment
the project profitability of an investment
1 pts
The capital budgeting method that divides a project's annual incremental net operating
income by the initial investment is the:
internal rate of return method.
the simple rate of return method.
the payback method.
the net present value method.
1 pts
Managerial accounting:
has its primary emphasis on the future.
is required by regulatory bodies such as the SEC.
focuses on the organization as a whole, rather than on the organization’s segments.
responses a, b, and c are all correct.
1 pts
The materials purchase budget:
is the beginning point in the budget process.
must provide for desired ending inventory as well as for production.
is accompanied by a schedule of cash collections.
is completed after cash budget.
1 pts
The budget or schedule that provides necessary input data for the direct labor budget is
the:
raw materials purchases budget
schedule of cash collections
production budget
cash budget
1 pts
High Inn is a bed and breakfast establishment in a converted 100-year-old mansion.
The Inn's guests appreciate its gourmet breakfasts and individually decorated rooms.
The Inn's overhead budget for the most recent month appears below:
Activity level 65 guests

Variable overhead costs
Supplies P156
Laundry 364
Fixed overhead costs
Utilities 250
Salaries and wages 4,480
Depreciation 1,330
Total overhead cost 6,580
The Inn's variable overhead costs are driven by the number of guests. What would be
the total budgeted overhead cost for a month if the activity level is 70 guests?
P42,460.00
P6,620.00
P7,086.15
P6,580.00
1 pts
Jasmine Company uses activity-based costing. The company has two products: A and
B. The annual production and sales of Product A is 10,000 units and of Product B is
4,000 units. There are three activity cost pools, with estimated total cost and
expected activity as follows:
Activity Estimated Expected Activity
Cost Pool Cost Product A Product B Product C
Activity 1 P25,000 150 100 250
Activity 2 P65,000 800 200 1,000
Activity 3 P90,000 1,000 2,000 3,000
The activity-based costing cost per unit of Product A is closest to:

P6.00
P9.70
P1.50
P3.00

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1 pts

Capacity Factory Overhead

What will be the flexible budget of factory overhead at 95% capacity?

You have learned that volume decreased by 2% in 200G.

You have learned that volume decreased by 2% in 200G.

The sales volume variance is ______________.

The sales mix variance is __________.

What is the cost of the ending inventory under absorption costing?

What is the cost of the ending inventory using direct costing?

How much was the manufacturing margin?

How much was the manufacturing profit?

Which of the following analysis is correct?

What was the materials mix variance?

What was the materials yield variance?

What is the total variable overhead variance for May ?

What is the total fixed overhead variance for May ?

What is the total overhead efficiency variance for May ?

What is the fixed overhead spending variance for May ?

What was the effect on gross profit of the change in volume?

What is the acid-test ratio?

No dividends were declared last year and the current year.

No dividends were declared last year and the current year

Activity level 65 guests

The activity-based costing cost per unit of Product A is closest to:

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