CPAR MAS Compilation

8/17/2019 CPAR MAS Compilation

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MANAGEMENT ADVISORY SERVICES CPA Review School of the Philippines Final P

OverviewMana&e%ent a#viso' sevices() The pi%a' p*pose of %ana&e%ent a#viso' sevices is to

A) con#*ct special st*#ies+ pepaation of eco%%en#ations+ #evelop%ent of plans an#po&a%s+ an# povision of a#vice an# assistance in thei i%ple%entation)

,) povi#e sevices o to f*lfill so%e social nee#)C) i%pove the client-s *se of its capa"ilities an# eso*ces to achieve the o".ectives of the

o&ani/ation)

D) ean the "est ate of et*n on eso*ces ent*ste# to its cae with safet' of invest%ent"ein& ta0en into acco*nt an# consistent with the fi%-s social an# le&al esponsi"ilities)

() The followin& chaactei/e %ana&e%ent a#viso' sevices e$ceptA) involve #ecision fo the f*t*e,) "oa#e in scope an# vaie# in nat*eC) *tili/e %oe .*nio staff than senio %e%"es of the fi%D) elate to specific po"le%s whee e$pet help is e1*ie#

2) 3hich of the followin& is not classifia"le as a %ana&e%ent a#viso' sevice "' CPA4A) S'ste%s #esi&n) C) Ma0e o "*' anal'sis),) Po.ect feasi"ilit' st*#') D) Assistance in "*#&et pepaation)

2) 3hich of the followin& state%ent is false4

A) CPA5s povi#e %ana&e%ent sevices to &o ao*n# the ethical constaints as %an#ate# "'the Acco*ntanc' Act),) ,*sinesses hie %ana&e%ent cons*ltants to help #efine specific po"le%s an# #evelop

sol*tionsC) Incl*#e# in the pactice of cons*ltin& is the povision of confi#ential sevice in which the

i#entit' of the client is conceale#D) CPA5s pefo%in& %ana&e%ent sevices %a' "e consi#ee# to "e in the pactice of

%ana&e%ent cons*ltin&

Mana&e%ent acco*ntin& 6 financial acco*ntin&() 3hich of the followin& chaacteistics is inheent to %ana&e%ent acco*ntin&4

A) Repotin& of histoical info%ation,) Co%pliance to &eneall' accepte# acco*ntin& pinciplesC) Conti"*tion appoach inco%e state%ent

D) E$tenal *ses of financial epot

7) The followin& ae chaacteistics of financial acco*ntin&+ e$cept4A) Repotin& of histoical info%ation,) Co%pliance to &eneall' accepte# acco*ntin& pinciplesC) Conti"*tion appoach inco%e state%entD) E$tenal *ses of financial epot

8 The followin& ae inheent to eithe %ana&e%ent acco*ntin& o financial a() E$tenal epot

2) :istoical info%ation7) Conti"*tion appoach inco%e state%ent8) Geneall' accepte# acco*ntin& pinciples;) Pospective financial state%ents3hich of the foe&oin& ae elate# to %ana&e%ent acco*ntin& an# espectivel'4

A) ,) C)

Mana&e%ent Acco*ntin& (+ 2+ ; 7+ ; 2+ 7Financial Acco*ntin& 7+ 8 (+ 2+ 8 (+ 8+ ;

;) The costin& %etho# that is popel' classifie# fo "oth e$tenal an# intenis

E$t enal epo tin& In ten

Activit'!"ase# costin& Yes

Vaia"le costin& YesPocess costin& NoStan#a# costin& Yes

Quality Costs


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D) Assi&n %an*fact*in& ovehea# costs fo each activit' cost pool to po#*cts

?) Desi&nin& an# e#esi&nin& ae activities that ae classifie# asA) Facilit' level C) @nit level,) ,atch level D) Po#*ct level

) The e$a%ples of activities at the po#*ct level incl*#eA) sche#*l in&+ sett in& *p+ an# %ovin& C) heatin&+ l i&ht in&+ an# sec*it',) #esi&nin&+ chan&in&+ an# a#vetisin& D) c*ttin&+ paintin&+ an# pac0a&in&

() E$a%ples of activities at the "atch level of costs incl*#eA) sche#*lin&+ settin& *p+ an# %ovin& C) heatin&+ l i&htin&+ an# sec*it',) #esi&nin&+ chan&in&+ an# a#vetisin& D) c*ttin&+ paintin&+ an# pac0a&in&

2) Sche#*lin&+ settin& *p+ an# %ovin& ae e$a%ples of activities that ae classifie# asA) ,atch level C) @nit level,) Po#*ct level D) Facilit' level

(>) E$a%ples of *nit level activities aeA) sche#*lin&+ settin& *p+ an# eceivin& C) heatin&+ li&htin&+ an# sec*it',) #esi&nin&+ chan&in&+ an# a#vetisin& D) c*ttin&+ paintin&+ an# pac0a&in&

7) An e$a%ple of a nonvol*%e!elate# ovehea# "ase wo*l# "e9A) Diect %ateials cost C) Diect Ba"o cost,) Machine ho*s D) N*%"e of inspections

(() Classif' the followin& as vol*%e *nit "ase o non!vol*%e activit' "ase9() N*%"e of p*chase o#es iss*e#2) Diect la"o ho*s7) N*%"e of %achine ho*s8) N*%"e of set *ps;) N*%"e of eceivin& epots iss*e#)If Moon is *sin& #iect tacin&+ the a%o*nt of ovehea# pe *nit that will "ean# ,eta+ espectivel'+ aeA) P2)8> an# P7)+ espect ivel' C) P8)?> an# P()2>+ es,) P7) an# P2)8>+ espect ivel' D) P()2> an# P8)?>+ es

Just-in-Time Manufacturing System(8) 3hich of the followin& is not a t'pical chaacteistic of a .*st!in!ti

envion%ent4A) Bot si/es e1*al to one C) P*sh!tho*&h s'ste%,) Insi&ni ficant set *p t i%es an# costs D) ,alance# an# level w

Cost BehaviorVaia"le Costs>+>>> fo +>>> *nits of "*#&ete# o*tp*t) ,ea##itional facilities+ "*#&ete# fi$e# costs fo +>>> *nits ae 2; pecentfi$e# costs fo ;>+>>> *nits) :ow %*ch is o#an5s "*#&ete# vaia"le cosA) P =);> C) P7>)>>,) P(> D) P

(;) Total po#*ction costs fo Caea+ Inc) ae "*#&ete# at P27>+>>> fo ;>+>o*tp*t an# P2?>+>>> fo +>>> *nits of "*#&ete# o*tp*t) ,eca*se of thfacilities+ "*#&ete# fi$e# costs fo +>>> *nits ae 2; %oe than "*#P;>+>>> *nits) :ow %*ch is Caea5s "*#&ete# vaia"le cost pe *nit of o*A) P() C) P7)>>

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,) P()>

7) Total po#*ction costs fo Ba&*na+ Inc) ae "*#&ete# at P27>+>>> fo ;>+>>> *nits of "*#&ete#o*tp*t an# P2?>+>>> fo +>>> *nits of "*#&ete# o*tp*t) ,eca*se of the nee# fo a##itionalfacilities+ "*#&ete# fi$e# costs fo +>>> *nits ae 2; %oe than "*#&ete# fi$e# costs fo;>+>>> *nits) :ow %*ch is Ba&*na5s total "*#&ete# vaia"le cost at +>>> *nits4A) P>> C) P(?>+>>>,) P(>>+2>> D) P(>>+>>>

(+>>> H P(2M3hee C %onthl' %an*fact*in& ovehea# cost

M %achine ho*sThe stan#a# eo of the esti%ate of the e&ession is P>>)The stan#a# ti%e e1*ie# to %an*fact*e one si$!*nit case of M*lve'-s an&le po#*ct is 8%achine ho*s) M*lve' applies %an*fact*in& ovehea# to po#*ction on the "asis of %achineho*s an# its no%al ann*al po#*ction is ;>+>>> casesM*lve'-s esti%ate# vaia"le %an*fact*in& ovehea# cost fo a %onth in which sche#*le#po#*ction is ;+>>> cases wo*l# "eA) P?>+>>> C) P28>+>>>,) P72>+>>> D) P7+>>>

() 3hich of the followin& &aphs ill*states the "ehavio of a total vaia"le cost4 EGaph ( Gaph 2

Total *nits po#*ce# Total *nits po#*ce#

Gaph 7 Gaph 8

Total *nits po#*ces Total *nits po#*ce#

A) Gaph 2 C) Gaph 8,) Gaph 7 D) Gaph (

Fi$e# Costs) Pats Co%pan' wishes to #ete%ine the fi$e# potion of its %aintenan

vaia"le e$pense+ as %eas*e# a&ainst #iect la"o ho*s fo the fist 'ea) The inspection costs ae fi$e# the a#.*st%ents necessitate# "'inspection acco*nt fo the vaia"le potion of the %aintenance costs) In1*ate is as follows9

Diect Ba"o :o*s Maintenan

an*a' 78+>>> P+>>> Mach 2=+>>>

3hat is the fi$e# potion of Ba&o Co%pan'5s %aintenance e$pense4A) P+>>> C) P>+>>>,) P7>+>>> D) P(2>+>>>

Total Costs(=) Mol#s Copoation has #evelope# the followin& fle$i"le "*#&et fo%*la fo

costs9Total Cost P7>>+>>> H P;)>> pe %achine ho*

Opeatin& "*#&ets fo the c*ent %onth ae "ase# *pon (?+>>> %achine %achine ti%e)In#iect la"o costs incl*#e# in this plannin& "*#&et ae9

A) P7>>+>>> C) P >+>>>

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,) P7>+>>> D) P((;+>>>

?) Aens Copoation has #evelope# the followin& fle$i"le "*#&et fo%*la fo ann*al in#iect la"ocosts9

Total Cost P8?>+>>> H P;)>> pe %achine ho*Opeatin& "*#&ets fo the c*ent %onth ae "ase# *pon 2>+>>> %achine ho*s of planne#%achine ti%e) In#iect la"o costs incl*#e# in this plannin& "*#&et ae9A) P 8?+777 C) P(>>+>>>,) P;?>+>>> D) P(8>+>>>

2) ,o' 6 Millie Co%pan' *ses an ann*al cost fo%*la fo ovehea# of P=2+>>> H P() fo each#iect la"o ho* wo0e#) Fo the *pco%in& %onth Jala plans to %an*fact*e >> *nits)Each *nit e1*ies five %in*tes of #iect la"o) ,o' 6 Millie5s "*#&ete# ovehea# fo the %onthisA) P(2+?>> C) P ?8+?>>,) P(?+?>> D) P==8+>>>

2) Sal#*a Co%pan' *ses a %onthl' cost fo%*la fo ovehea# of P;>+>>> H P7>)>> fo each#iect la"o ho* wo0e#) Fo the co%in& 'ea+ Sal#*a plans to %an*fact*e 2>>+>>> *nits)Each *nit e1*ies five %in*tes of #iect la"o) Sal#*a5s total "*#&ete# ovehea# fo theco%in& 'ea isA) P ;;>+>>> C) P(+2>>+>>>,) P(+(>>+>>> D) P +>>>

) Sca%"le# ,ain Co%pan' has fi$e# costs of P>+>>>) At a sales vol*%

on sales is (> at a P;>>+>>> vol*%e+ et*n on sales is 22) 3havol*%e4A) P(2>+>>> C) P22;+>>>,) P2>>+>>> D) P8;>+>>>

Units Sold (?) At a sales vol*%e level of 2+2;> *nits+ B*/on Co%pan'5s conti"*tion %a

half of the fi$e# costs of P7>>) Conti"*tion %a&in is 7>) :ow %an"' the co%pan' to "ea0even4A) (+2;> C) 2+;?>,) (+;>> D) 2+;2>

?) At 8>+>>> *nits of sales+ Snail Co%pan' ha# an opeatin& loss of P7)>> wee =>+>>> *nits+ the co%pan' ha# a pofit of P()2> pe *nit) The"ea0even isA) 7;+>>> C) ;2+;>>,) 8;+>>> D) ;=+


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inc*e# *nifo%l' tho*&ho*t the 'ea+ a%o*nt to P=2+>>> %an*fact*in& costs of P;>>+>>>an# sellin& e$penses of P22+>>>) Thee ae no "e&innin& inventoies)If la"o costs ae ;> of vaia"le costs an# 2> of fi$e# costs+ a (> incease in wa&es an#salaies wo*l# incease the n*%"e of *nits e1*ie# to "ea0even toA) (;2+827 C) (=;+) Glaeless Co%pan' %an*fact*es an# sells s*n&lasses) Pice an# cost #ata ae as follows9Sellin& pice pe pai of s*n&lasses P2;)>>Vaia"le costs pe pai of s*n&lasses9 Raw %ateials P(()>> Diect la"o ;)>> Man*fact*in& ovehea# 2);> Sellin& e$penses ()7>

Total vaia"le costs pe *nit P()?>Ann*al fi$e# costs9 Man*fact*in& ovehea# P(2+>>> Sellin& an# a#%inistative 2=>> Total fi$e# costs P8


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Po#*ct @ni t Sel li n& P ice @nit Vaia" le Cost @ni t Cont i"*t ion Ma& in

A0s P(2> P?> P8>,ins ?> 2>

Ass*%in& that last 'ea-s fi$e# costs totale# P(>+>>>+ what was Phipps Co)-s "ea0!evenpoint in *nits4 EA) 8>+>>> C) 7;+>>>,) (2+>>> D) 2?+>>>

Sales Amount 28) ,*sh Electonics+ Inc) ha# the followin& sales es*lts fo 2>>89

TV sets CD pla'e Ra#ios

Peso sales co%ponent atio >)7> >)7> >)8>Conti"*tion %a&in atio >)8> >)8> >)

,*sh Electonics+ Inc) ha# fi$e# costs of P2+8>>+>>>)The "ea0 even sales in pesos fo ,*sh Electonics+ Inc) ae9

A) ,) C) D)

TV sets P(+?>>+>>> P(+?>>+>>> P(+;>>+>>> P(+;7(+(;CD pla'e P(+?>>+>>> P(+?>>+>>> P(+;>>+>>> P(+;7(+(;Ra#ios P7+>+>>> P(+>+>>> P2+>>>+>>> P2+>82+;;7

8) The %ana&e of Salvacion Stoe eviewe# the followin& #ata9

F*its Meat Canne# Po#*cts

Conti"*tion %a&in atio 8> ;> 8>Sales %i$ in pesos 2> 7> ;>

Fi$e# costs+ P(+2>+>>> pe %onth)The "ea0even sales fo each %onth isA) P(+>> C) P8+;>>+>>>,) P7+>>>+>>> D) P>>+>>>

,ea0even Anal'sis L Cash ,asis( pe *nit an# will contin*e whethe o not po#*ction ceases) Depeciation on the e1*ip%ent is P2>+>>> a'ea) If po#*ction is stoppe#+ the e1*ip%ent can "e sol# fo P(?+>>>+ if po#*ction contin*es+howeve+ it will "e *seless at the en# of ( 'ea an# will have no salva&e val*e) The sellin&

pice is P(> a *nit) I&noin& ta$es+ the %ini%*% *nits to "e sol# in the c*ent 'ea to "ea0even on a cash flow "asis is

A) 8+;>> *nits C) (+?>> *nits,) ;+>>> *nits D) 7>> *nits

(() Ms Ma0ilin& state# a canteen in 2>>2) Fo this p*pose a space was %onth) Two wo%en wee hie# to wo0 f*ll ti%e at the canteen an# si$ chie# to wo0 7> ho*s pe wee0 #elivein& val*e %eals) This level of econsistent) An o*tsi#e acco*ntant was hie# fo ta$ an# "oo00eepin& p*Ma0ilin& pa's P7+>>> pe %onth) The necessa' canteen e1*ip%ent ap*chase# with cash) Ms) Ma0ilin& has notice# that e$penses fo *tilitie"een athe constant) Ms) Ma0ilin& incease# he "*siness "etween 2>have %oe than #o*"le# since 2>>2) Ms) Ma0ilin& #oes not *n#estaincease# faste than vol*%e)A po.ecte# inco%e state%ent fo the 'ea en#e# Dece%"e 7(+ 2>>acco*ntant+ is shown "elow9

Sales each P2;Cost of foo# sol# P2?;+>>>3a&es 6 fin&e "enefits9 Resta*ant help ?(+;>> Delive' help (=7+>>>Rent 8?+>>>Acco*ntin& sevices 7>>Depeciation9 Delive' e1*ip%ent ;>+>>> Resta*ant e1*ip%ent 7>+>>>@tilities 27+2;>S*pplies (2+>>>Net inco%e "efoe ta$esInco%e ta$es 8> Net inco%e

3hat is the cash flow "ea0even point sales that %*st "e sol#4A) P8??+2(; C) P728+=;>,) P;77+2 D) P2


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Set*ps (+>>> ?>En&ineein& ho*s 2+>>>Othe #ata9Total fi$e# costs ta#itional P8>>+>>>Total fi$e# costs A,C P(;>+>>>@nit sellin& pice P?>

3hat is the "ea0even point *sin& A,C4A) (>+>>> *nits) C) ;+>>> *nits),) (;+>>> *nits) D) ?+=;> *nits)

Pofit Plannin&Selling Price2() Glow Co) wants to sell a po#*ct at a &oss %a&in of 2>) The cost of the po#*ct is P2)>>)

The sellin& pice sho*l# "eA) P() C) P2)8>,) P2)(> D) P2);>

22) P*vis Co%pan' %an*fact*es a po#*ct that has a vaia"le cost of P;> pe *nit) Fi$e# coststotal P(+>>>+>>> an# ae allocate# on the "asis of the n*%"e of *nits po#*ce#) Sellin& piceis co%p*te# "' a##in& a (> %a0*p to f*ll cost) :ow %*ch sho*l# the sellin& pice "e pe*nit fo (>>+>>> *nits4A) P;;) C) P>>Fi$e# costs (;>+>>> Net inco%e "efoe ta$esInco%e ta$es Net inco%e

In an atte%pt to i%pove its po#*ct in the co%in& 'ea+ Ba/ is consco%ponent pat in its po#*ct that has a cost of P2);> with a new an# "ettpe *nit) A new %achine will also "e nee#e# to incease plant capacit')cost P(?+>>> with a *sef*l life of < 'eas an# no salva&e val*e) The coline #epeciation on all plant assets)If Ba/ wishes to %aintain the sa%e conti"*tion %a&in atio afte i%ple% what sellin& pice pe *nit of po#*ct %*st it cha&e ne$t 'ea to cove thcosts4A) P2=)>> C) P72);>,) P2;)>> D) P2?)77

Additional unit sales2;) In 2>>( B*cia Co%pan' ha# a net loss of P?+>>>) The co%pan' sells

sellin& pice of P?> an# a vaia"le cost pe *nit of P) In 2>>2+ the coean a "efoe!ta$ pofit of P8>+>>>) :ow %an' a##itional *nits %*st the cthan it sol# in 2>>(4 Ass*%e that the ta$ ate is 8> pecent)A) (+> C) 2+8>>,) 2+>>> D) ;+8>>

Unit sales7>>)If fi$e# costs will incease "' 7> pecent+ what a%o*nt of peso sales wo&eneate an opeatin& pofit of P8?+>>>4A) P(+7;>+>>> C) P(+(7;+>>>,) P8?+>>>

(>) Tip Co%pan' wishes to %a0et a new po#*ct fo P(;)>> a *nit) Fi$e# this po#*ct ae P(+>>>+>>> fo less than ;>>+>>> *nits an# P(+;>>+>>>

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*nits) The conti"*tion %a&in is 2>) :ow %an' *nits %*st "e sol# to eali/e net inco%efo% this po#*ct of P(+>>>+>>>4A) 2+>>>4A) 8+>>> C) 8+;>>,) 8+7>> D) ;+>>>

2>) ,*nei Cop) is #evelopin& a new po#*ct+ s*&e potectos fo hi&h!volta&e electical flows)The cost info%ation fo the po#*ct ae9 Diect %ateials+ P7)2; pe *nit Diect la"o+ P8)>>pe *nit Disti"*tion+ P>)=; pe *nit) The co%pan' will also "e a"so"in& P(2>+>>> ofa##itional fi$e# costs associate# with this new po#*ct) A copoate fi$e# cha&e of P2>+>>>c*entl' a"so"e# "' othe po#*cts will "e allocate# to this new po#*ct):ow %an' s*&e potectos o*n#e# to the neaest h*n#e# %*st ,*nei sell at a sellin&pice of P(8 pe *nit to incease afte!ta$ inco%e "' P7>+>>>4 effective inco%e ta$ ate is

8>A) (>+=>> C) 2>+>>>,) (2+(>> D) 2?+7>>

8() Si"eian S0i Co%pan' ecentl' e$pan#e# its %an*fact*in& capacit'+ which will allow it topo#*ce *p to (;+>>> pais of coss!co*nt' s0is of the %o*ntaineein& %o#el o the to*in&%o#el) The Sales Depat%ent ass*es %ana&e%ent that it can sell "etween +>>> pas an#(7+>>> pais of eithe po#*ct this 'ea) ,eca*se the %o#els ae ve' si%ila+ Si"eian S0i willpo#*ce onl' one of the two %o#els)The followin& info%ation was co%pile# "' the Acco*ntin& Depat%ent)

Pe @nit Pais Data

Mo*ntaineein& To*in&Sellin& pice P??)>> P?>)>>Vaia"le costs ;2)?> ;2)?>

Fi$e# cost will total P7 if the %o*ntaineein& %o#el is po#*cP7(> if the to*in& %o#el is po#*ce#) Si"eian s0i is s*".ect to a 8>If Si"eian S0i Co%pan' #esies an afte ta$ net inco%e of P28+>>>+ how %%o#el s0is will the co%pan' have to sell4A) (7+((? C) (7+?;7,) (2+;2 D) 8+8

Sales amount ;) D: Co%pan' has sales of P7+>>>+ vaia"le costs of P2(>>+

P(;>+>>>) To ean a (> et*n on sates+ D: %*st have sales of EA) P7=;+>>> C) P88>+>>>,) P8=>+>>> D) P;>>+>>>

2>>) If fi$e# costs will incease "' 7> pecent+ what a%o*nt of pnecessa' to &eneate an opeatin& pofit of P8?+>>>4A) P(+7;>+>>> C) P(+(7;+>>>,) P8?+>>>

72) Mo*nt Pa0+ Inc) ha# the followin& econo%ic info%ation fo the 'ea 2>>2Sales ;>+>>> *nits P2>Vaia"le %an*fact*in& costs

Fi$e# costsInco%e ta$ ate

Mo*nt Pa0 "*#&ets its 2>>7 sales at +>>> *nits o P(+2>>+>>>) The incease# co%petition hence+ an a##itional P=;+>>> a#vetisin& costs is %aintain its sales ta&et fo 2>>7)3hat is the a%o*nt of peso sales nee#e# fo 2>>7 in o#e to e1*al the2>>24A) P(+(2;+>>> C) P(+(?=+;>>,) P(+72;+>>> D) P(+7?=+;>>

2=) Mo*nt Pa0+ Inc) ha# the followin& econo%ic info%ation fo the 'ea 2>>2Sales;>+>>> *nits P2>Vaia"le %an*fact*in& costs Fi$e# costs

Inco%e ta$ ate

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Mo*nt Pa0 "*#&ets its 2>>7 sales at +>>> *nits o P(+2>>+>>>) The co%pan' anticipatesincease# co%petition hence+ an a##itional P=;+>>> a#vetisin& costs is "*#&ete# in o#e to%aintain its sales ta&et fo 2>>7)3hat is the a%o*nt of peso sales nee#e# fo 2>>7 in o#e to e1*al the afte!ta$ inco%e in2>>24A) P(+(2;+>>> C) P(+(?=+;>>,) P(+72;+>>> D) P(+7?=+;>>

2) Si$!Two5s &oss %a&in on sales is 2; pecent) Si$!Two esti%ates thatpecent of its S*n#a' sales to c*sto%es wo*l# "e %a#e on othe #a's if the stoes wee noopen on S*n#a's) The one!#a' vol*%e of S*n#a' sales that wo*l# "e necessa' fo Si$!Twoto attain the sa%e wee0l' opeatin& inco%e as the c*ent si$!#a' wee0 isA) P>> C) P=+;>>,) P;+>>> D) P?+>>>

;) Si$!Two Convenience Stoe c*entl' opens onl' Mon#a' tho*&h Sat*#a') Si$!Two isconsi#ein& openin& on S*n#a's) The ann*al ince%ental fi$e# costs of S*n#a' openin&s aeesti%ate# at P7+>>>) Si$!Two5s &oss %a&in on sales is 2; pecent) Si$!Two esti%ates that pecent of its S*n#a' sales to c*sto%es wo*l# "e %a#e on othe #a's if the stoes weenot open on S*n#a's) The one!#a' vol*%e of S*n#a' sales that wo*l# "e necessa' fo Si$!Two to attain the sa%e wee0l' opeatin& inco%e as the c*ent si$!#a' wee0 is

A) P>> C) P=+;>>,) P;+>>> D) P8+;>>

(>) Ca%a' Co%pan' is a &oce' stoe that is c*entl' open onl' Mon#a' tho*&h Sat*#a')Ca%a' Co%pan' is consi#ein& openin& on S*n#a's) The ann*al ince%ental costs ofS*n#a' openin&s ae esti%ate# at P7(+2>>) Ca%a'5s &oss %a&in on sales is 2; pecent)Ca%a' esti%ates that =; pecent of its S*n#a' sales to c*sto%es wo*l# "e %a#e on othe#a's if the stoe wee not open on S*n#a's)The one!#a' vol*%e of S*n#a' sales that wo*l# "e necessa' fo Ca%a' to attain the sa%e wee0l' opeatin& as the c*ent si$!#a' wee0 isA) P2+8>> C) P+>,) P7+2>> D) P+?8

2?) Donnell' Copoation %an*fact*es an# sells T!shits i%pinte# with colle&e na%es an#

slo&ans) Bast 'ea+ the shits sol# fo P=);> each+ an# the vaia"le cost to %an*fact*es the%

was P2)2; pe *nit) The co%pan' nee#e# to sell 2>+>>> shits to "ea0 elast 'ea was P;+>8>) Donnell'5s e$pectation fo the co%in& 'ea incl*#e t The sales pice of the T!shits will "e P

Vaia"le cost to %an*fact*e will incease "' one!thi#

Fi$e# costs will incease "' (>

The inco%e ta$ ate of 8> will "e *nchan&e#

If Donnell' wishes to ean P22+;>> in net inco%e fo the co%in& 'ea+ tvol*%e in pesos %*st "e

A) P2(7+=;> C) P2>=+>>>,) P2;=+>

2;) Ma##en+ Co%pan' has po.ecte# its inco%e "efoe ta$es fo ne$t 'eMa##en is s*".ect to a 8> inco%e ta$ ate)

Sales (+>>> *nits P?+>>>Cost of salesVaia"le costs P 2+>>>+>>>Fi$e# costs 7+>>>+>>> ;+>>

Inco%e "efoe ta$es P 7+>>>

Ma##en5s net assets ae P7>>+>>>) The peso sales that %*st "e achean a (> pecent afte ta$ et*n on assets wo*l# "eA) P?+?>>+>>> C) P(2+>>>+>>>,) P(>>+>>> D) P+>>>

Unit variable cost 7() Sto' Man*fact*in& inc*s an ann*al fi$e# cost of P2;>+>>> in po#*cin

Esti%ate# *nit sales fo 2>>> ae (2;+>>>) An afte!ta$ inco%e of P=%ana&e%ent) The co%pan' po.ects its inco%e ta$ ate at 8>) 3hat is tthat Sto' can e$pen# fo vaia"le costs pe *nit an# still %eet its pofitpice pe *nit is po.ecte# at P>,) P7); D) P7)=>

Unit Contribution Margin2?) The followin& elates to Gloia Copoation+ which po#*ce# an# sol# ;>+>

ecent acco*ntin& peio#9

Sales

Inco%e ta$ ate

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Vaia"le Fi$e#Man*fact*in& cost (8>+>>> 2(>+>>>Sellin& 6 a#%inistative e$pense 8;+>>> 7>>+>>>

Fo the ne$t acco*ntin& peio#+ if po#*ction an# sales ae e$pecte# to "e 8>+>>> *nits+ theco%pan' sho*l# anticipate a conti"*tion %a&in pe *nit ofA) P()>>) C) P7)(>,) P(7)7>) D) P=)7>

Contribution Margin Ratio

2) Bast 'ea+ the %a&inal conti"*tion ate of Ba%esa Co%pan' was 7>) This 'ea+ fi$e# costsae e$pecte# to "e P(2>+>>>+ the sa%e as last 'ea+ an# sales ae foecaste# at P;;>+>>> a(> incease ove last 'ea) Fo the co%pan' to incease inco%e "' P(;+>>> in the co%in&'ea+ the %a&inal conti"*tion %a&in ate %*st "eA) 2> C) 8>,) 7> D) =>

Total Fixed Costs7>) The Ship Co%pan' is plannin& to po#*ce two po#*cts+ Alt an# T*#e) Ship is plannin& to sell

(>>+>>> *nits of Alt at P8 a *nit an# 2>>+>>> *nits of T*#e at P7 a *nit) Vaia"le costs ae=> of sales fo Alt an# ?> of sales fo T*#e) In o#e to eali/e a total pofit of P(+>>>+ what %*st the total f i$e# costs "e4A) P?>+>>> C) P28>+>>>,) P>+>>> D) P>+>>>

Operating income72) A %an*fact*e po#*ces a po#*ct that sells fo P(> pe *nit) Vaia"le costs pe *nit ae P<

an# total fi$e# costs ae P(2+>>>) At this sellin& pice+ the co%pan' eans a pofit e1*al to(> of total peso sales) ,' e#*cin& its sellin& pice to P pe *nit+ the %an*fact*e canincease its *nit sales vol*%e "' 2;) Ass*%e that thee ae no ta$es an# that total fi$e#costs an# vaia"le costs pe *nit e%ain *nchan&e#) If the sellin& pice wee e#*ce# to Ppe *nit+ the pofit wo*l# "eA) P7+>>> C) P;+>>>,) P8+>>> D) P>>

77) 3ilson Co) pepae# the followin& peli%ina' foecast concenin& po#*ct G fo ne$t 'eaass*%in& no e$pen#it*e fo a#vetisin&9

Sellin& pice pe *nit P (>@nits sales (>>+>>>

Vaia"le costsFi$e# costs

,ase# on a %a0et st*#' in Dece%"e of this 'ea+ 3ilson esti%ate# that*nit sellin& pice "' (; an# incease the *nit sales vol*%e "' (> if Pon a#vetisin&) Ass*%in& that 3ilson incopoates these chan&es in its "e the opeatin& inco%e fo% po#*ct G4A) P(=;+>>> C) P2>;+>>>,) P(>+>>> D) P7>>

2=) ,elow is an inco%e state%ent fo ,en#e Co) fo 2>>>9SalesVaia"le costsConti"*tion %a&inFi$e# costsPofit "efoe ta$

Ass*%in& that the fi$e# costs ae e$pecte# to e%ain at P2>>+>>> fo pice pe *nit an# vaia"le costs pe *nit ae also e$pecte# to e%ain pofit "efoe ta$ will "e po#*ce# if the co%pan' anticipates 2>>( sales 2>>> level4A) P=+>>>,) P(;+>>>C) P(;=+;>>D) A pe#iction cannot "e %a#e fo% the info%ation

78) Shoes+ @nli%ite# opeates a chain of shoe stoes ao*n# the co*nt') Tst'les of shoes that ae all sol# at the sa%e pice) To enco*a&e saa&&essive in thei sales effots+ the co%pan' pa's a s*"stantial sales pai of shoes sol#) Sales pesonnel also eceive a s%all "asic sala')The followin& cost an# even*e #ata elate to Stoe 2( an# ae t'pical of tsales o*tlets9

Sellin& piceVaia"le e$penses9Invoice costsSales co%%ission

Fi$e# e$penses pe 'ea9Rent

A#vetisin&

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Salaies (+8>>+>>>Total P>>+>>>

The co%pan' is consi#ein& pa'in& the stoe %ana&e a P co%%ission on each pai ofshoes sol# in e$cess of "ea0!even point) If this chan&e wee %a#e+ what will "e the stoe5s"efoe ta$ pofit o loss ass*%in& 27+;>> pais of shoes ae sol# in a 'ea4A) P7+>>> C) P?8>+>>>,) P2+7>+>>> D) P(+77>+>>>

Change in operating income

7>) Machan Co)5s 'ea!en# inco%e state%ent is as follows9Sales 2>+>>> *nits P7+>>>Vaia"le costs 22>+>>>Conti"*tion %a&in P(8>+>>>Fi$e# costs (>;+>>>

Net inco%e P7;+>>>

Mana&e%ent is *nhapp' with the es*lts an# plans to %a0e so%e chan&es fo ne$t 'ea) If%ana&e%ent i%ple%ents a new %a0etin& po&a%+ fi$e# costs ae e$pecte# to incease "'P(+2>> an# vaia"le costs to incease "' P( pe *nit) @nit sales ae e$pecte# to incease "'(; pecent) 3hat is the effect on inco%e if the foe&oin& chan&es ae i%ple%ente#4A) #ecease of P2(+2>> C) incease of P(7+?>>,) incease of P(+?>> D) incease of P(8+?>>

7() Si&nal Co) %an*fact*es a sin&le po#*ct) Fo 2>>>+ the co%pan' ha# sales of P>+>>>+vaia"le costs of P;>+>>>+ an# fi$e# costs of P7>+>>>) Si&nal e$pects its cost st*ct*e an#sales pice pe *nit to e%ain the sa%e in 2>>(+ howeve total sales ae e$pecte# to .*%p "'2>) If the 2>>( po.ections ae eali/e#+ net inco%e in 2>>( sho*l# e$cee# net inco%e in2>>> "'A) (>> C) 2>,) ?> D) ;>

Sensitivit' Anal'sisChange in breakeven point () The followin& #ata elate to :o%e Co%pan' which sells a sin&le po#*ct9

@nit sellin& pice P 2>)>>P*chase cost pe *nit (()>>Sales co%%ission+ (> of sellin& pice 2)>>Monthl' fi$e# costs P?>+>>>

The fi%5s salespesons wo*l# li0e to chan&e thei co%pensation fo% a (> pecent

co%%ission to a ; pecent co%%ission pl*s P2>+>>> pe %onth in salaonl' co%%ission)The chan&e in co%pensation plan sho*l# chan&e the %onthl' "ea0even A) (+>=( Incease C) (+;7? Incease,) (+>=( Decease D) (+;7? Decease

Contribution margin78) If fi$e# costs incease while vaia"le cost pe *nit e%ains constant+ the

will "e

A) Bowe C) @nchan&e#,) :i&he D) @npe#icta"le

2() Pape"ac0s P*"lishin& Co) po.ecte# the followin& info%ation fo ne$t 'eSellin& pice pe *nitVaia"le cost pe *nitTotal fi$e# costs

3hat is the pofit when one *nit %oe than the "ea0even point is sol#4A) P;>> C) P;+>>>+;>>,) P2>> D) P2+>>>+2>>

Fixed costs8) DSP Co%pan' eane# P(>>+>>> on sales of P(+>>>+>>>) It eane# P

P(+(>>+>>>) Total fi$e# costs ae M

A) P > C) P82>+>>>,) P2>>+>>> D) P>>+>>>

7;) Bast %onth+ a%oa Co%pan' ha# an inco%e of P>)=; pe *nit with sD*in& the c*ent %onth when the *nits sales ae e$pecte# to "e onl' 8of P()2; pe *nit) ,oth the vaia"le cost pe *nit an# total costs e%ain coThe fi$e# costs a%o*nte# toA) P?>+>>> C) P28=+;>>,) P7+>>> D) P2(>+>>>

>> oo%s in its nationwi#e chain of hotels) pecent of the oo%s ae occ*pie# each #a') The co%pan'5s opeatinocc*pie# oo% pe #a' at this occ*panc' level+ ass*%in& a 7>!#a' %ocontains "oth vaia"le an# fi$e# cost ele%ents) D*in& Octo"e+ the oc

onl' 8; pecent) A total of P=2+>>> in opeatin& cost was inc*e# #*in&

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12/67


3hat wo*l# "e the e$pecte# opeatin& costs+ ass*%in& that the occ*panc' ate inceases to pecent #*in& Nove%"e4A) P(+>;>> C) P?8>>,) P =;>> D) P?2+;>>

Change in ixed costs77) The followin& #ata appl' to Coss Copoation fo the 'ea 2>>89

Total vaia"le cost pe *nit P7);>Conti"*tion %a&insales 7>

,ea0even sales pesent vol*%e P(+>>>+>>>Coss wants to sell an a##itional ;>+>>> *nits at the sa%e sellin& pice an# conti"*tion%a&in) ,' how %*ch can fi$e# costs incease to &eneate a &oss %a&in e1*al to (> of thesales val*e of the a##itional ;>+>>> *nits to "e sol#4A) P;>+>>> C) P>,) P;=+;>> D) P(2;+>>>

) Santos Co%pan' is plannin& its a#vetisin& ca%pai&n fo ne$t 'ea an# has pepae# thefollowin& "*#&et #ata "ase# on a /eo a#vetisin& e$pen#it*e9

No%al plant capacit' 2>>+>>> *nitsSales (;>+>>> *nitsSellin& pice P2; pe *nitVaia"le %an*fact*in& costs P(; pe *nitFi$e# %an*fact*in& costs P?>>+>>>

Fi$e# sellin& an# a#% costs P=>>+>>>An a#vetisin& a&enc' clai%s that an a&&essive a#vetisin& ca%pai&n wo*l# ena"le Santos toincease its *nit sales "' 2>) 3hat is the %a$i%*% a%o*nt that Santos Co%pan' can pa'fo a#vetisin& an# have an opeatin& pofit of P2>>+>>> ne$t 'ea4A) P(>>+>>> C) P7>>+>>>,) P2>>+>>> D) P;;>+>>>

7=) The Ri/al Ma0etin& Co)+ is e$pectin& an incease of fi$e# costs "' P=?+=;> *pon %ovin& theiplace of "*siness to the #owntown aea) Bi0ewise it is anticipatin& that the sellin& pice pe *nitan# the vaia"le e$pense will not chan&e) At pesent+ the sales vol*%e necessa' to"ea0even is P=;>+>>> "*t with the e$pecte# incease in fi$e# costs+ the sales vol*%enecessa' to "ea0even wo*l# &o *p to P=;+>>>) ,ase# on these po.ections+ what wo*l# "ethe total fi$e# costs afte the incease of P=?+=;>4A) P78(+2;> C) P(?7+=;>

,) P2> D) P7>>+>>>

7?) MS opeates a chain of shoe stoes ao*n# the %etopolitan cit') MS stoof shoes that ae all sol# at the sa%e pice) To enco*a&e sales pesonnethei sales effots+ the co%pan' pa's a s*"stantial sales co%%issions on esol#) Sales pesonnel also eceive a %ini%*% "asic sala')The followin& cost an# even*e #ata t'pical of the co%pan'5s %an' sales

Sellin& piceVaia"le e$penses9 Invoice costs

Sales co%%ission

Fi$e# e$penses pe 'ea9 Rent A#vetisin& Salaies Total

The co%pan' is consi#ein& pa'in& the stoe %ana&e a P co%%ission shoes sol# in e$cess of "ea0!even point) If this chan&e wee %a#e+ wha"efoe ta$ pofit o loss ass*%in& 27+>>> pais of shoes ae sol# in a 'ea4A) P =2>+>>> C) P 2>+>>>,) P8?>+>>> D) P+>>>

=) Can#'%an Co%pan' is a wholesale #isti"*to of can#') The co%pa

convenience+ an# #*& stoes in Meto Manila) S%all "*t stea#' &owtachieve# "' the co%pan' ove the past few 'eas while can#' pices haThe co%pan' is fo%*latin& its plans fo the co%in& fiscal 'ea) Pesente*se# to po.ect the c*ent 'ea5s afte!ta$ net inco%e of P((>+8>>)

Avea&e sellin& pice P8)>>Avea&e vaia"le costs Cost of can#' P2)>> Sellin& e$penses >)8> Total P2)8>Ann*al fi$e# costs Sellin& P(+ A#%inistative 2?>+ Total fi$e# costs P88>+E$pecte# ann*al sales vol*%e 7>+>>> "o$es P(+;<

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13/67


Man*fact*es of can#' have anno*nce# that the' will incease pices of thei po#*cts anavea&e of (; in the co%in& 'ea #*e to inceases in aw %ateial s*&a+ cocoa+ pean*ts+etc) an# la"o costs) Can#'%an Co%pan' e$pects that all othe costs will e%ain at the sa%eates o levels as the c*ent 'ea) Can#'%an is s*".ect to 8> pecent ta$ ate)If net inco%e afte ta$es is to e%ain the sa%e afte the cost of can#' inceases "*t noincease in the sales pice is %a#e+ how %an' "o$es of can#' %*st Can#'%an sell4A) 8?>+>>> C) ;>7+22;,) 827+7?; D) 887+?=(

In#iffeence PointUnits sold 8>) D*lce+ Inc) owns an# opeates a chain of foo# centes) The %ana&e%ent is consi#ein&

installin& %achines that will %a0e popcon on the pe%ises) These %achines ae availa"le intwo #iffeent si/es with the followin& #etails)

Econo%' Re&*la

Ann*al capacit' 2>+>>> ;>+>>>

Costs9 Ann*al %achine ental P+>>>)>> P?2+;>>)>>Popcon cost pe "o$ 7)> 7)>

Cost of each "o$ >)?> >)?>Othe vaia"le cost pe "o$

The level of o*tp*t in "o$es at which the Econo%' an# the Re&*la wo*l# ean the sa%e pofitloss is

A) 2>+>>> "o$es C) +7=; "o$es,) (;+>>> "o$es D) (2+;>> "o$es

(7) The followin& #ata elate to :o%e Co%pan' which sells a sin&le po#*ct9@nit sellin& pice P 2>)>>P*chase cost pe *nit (()>>Sales co%%ission+ (> of sellin& pice 2)>>Monthl' fi$e# costs P?>+>>>

The fi%5s salespesons wo*l# li0e to chan&e thei co%pensation fo% a (> pecentco%%ission to a ; pecent co%%ission pl*s P2>+>>> pe %onth in sala') The' now eceiveonl' co%%issions)At what sales vol*%e wo*l# the two co%pensation plans "e in#iffeent4A) (2+;>> C) 2>+>>>,) 22+222 D) 22+?

Sales amount 7) ,M Motos Inc) e%plo's 8> sales pesonnel to %a0et its line of l*$*

avea&e ca sells fo P(+2>>+>>> an# a >> pe %onth pl*s a co%%ission of 2 of the sales %a#e "The a%o*nt of total ca sales at which ,M Motos wo*l# "e in#iffeentselect isA) P22+;>>+>>> C) P28+>>>+>>>,) P7>+>>>+>>> D) P(2+>>>+>>>

(>) ,l*e S0i Co%pan' ecentl' e$pan#e# its %an*fact*in& capacit' to allow (;+>>> pais of coss!co*nt' s0is of eithe the %o*ntaineein& %o#el o tThe sales #epat%ent ass*es %ana&e%ent that it can sell "etween +>>>*nits of eithe po#*ct this 'ea) ,eca*se the %o#els ae ve' si%ila+ ,onl' one of the two %o#els) The info%ation "elow was co%pile# "' the a#epat%ent)

Mo*ntaineein& T

Sellin& pice pe *nit P??>)>> PVaia"le costs pe *nit P;2?)>> P

Fi$e# costs will total P7+> if the %o*ntaineein& %o#el is po#*ce# P7+(


14/67


82) R*ssini+ Inc) ha# the followin& econo%ic #ata fo 2>>89Net sales P8>>+>>>Conti"*tion %a&in P(+>>>Ma&in of safet' P 8>+>>>

3hat is R*ssini-s "ea0even point in 2>>84A) P7+>>> C) P2??+>>>,) P72>+>>> D) P ?>+>>>

Current sales

+>>>+ a "ea0!even point of P+>>> an# opeatin& inco%e of P+>>> fo the c*ent'ea+ what ae the c*ent 'ea-s sales4 MA) P(+2>>+>>> C) P(+2+>>>,) P(+>8>+>> D) P(+>2>+>>>

pecent) If fi$e# costs a%o*nt to P72>+>>>+ how %*ch sales #i# Pansipit%a0e fo the 'ea4A) P(+>>>,) P(+2?>+>>> D) P ?>>+>>>

Fixed costs=) Be%e' Copoation ha# sales of P(2>+>>> fo the %onth of Ma') It has a %a&in of safet' atio

of 2; pecent+ an# afte!ta$ et*n on sales of < pecent) The co%pan' ass*%es its sales an#fi$e# costs constant eve' %onth) If the ta$ ate is 8> pecent+ how %*ch is the ann*al fi$e#costs4 MA) P7>> C) P872+>>>,) P>+>>> D) P7+>>>

Opeatin& Bevea&e87) A ve' hi&h opeatin& levea&e in#icates that a fi%

A) has hi&h fi$e# cost C) has hi&h vaia"le costs,) has hi&h net inco%e D) is opeatin& close to its "ea0even point

8;) Fi% D an# Finn S ae co%petitos within the sa%e in#*st') Fi% D po#*ces its po#*ct *sin&la&e a%o*nts of #iect ta"o) Fi% S has eplace# #iect la"o with invest%ent in %achine')Po.ecte# sales fo "oth fi%s ae fifteen pecent less than in the pio 'ea) 3hich state%ent

e&a#in& po.ecte# pofits is t*e4

A) Fi% D will lose %oe pofit than Fi% S),) Fi% S will lose %oe pofit than Fi% D)C) Fi% D an# Fi% S will lose the sa%e a%o*nt of pofit)D) Neithe Fi% D no Fi% S will lose pofit)

88) The Di#an& Co%pan' has an opeatin& levea&e of 2) Sales fo 2>>( aconti"*tion %a&in of P(+>>>+>>>) Sales ae e$pecte# to "e P7+>>>+>>> fo 2>>2 can "e e$pecte# to incease "' what a%o*nt ove 2>>(4A) P2;>+>>> C) P;>>+>>>

,) 2>> pecent D) 8> pecent

8>>+ the co%pan' ha#vaia"le costs of P;>+>>>+ an# fi$e# costs of P7>+>>>) Si&nal e$pects isales pice pe *nit to e%ain the sa%e in 2>>(+ howeve total sales ae2>) If the 2>>( po.ections ae eali/e#+ net inco%e in 2>>( sho*l# e2>>> "'A) (>> C) 2>,) ?> D) ;>

Absor#tion Costing $ ariable CostingVaia"le Costin&8=) 3hich of the followin& state%ents is t*e fo a fi% that *ses vaia"le #ie

A) The cost of a *nit of po#*ct chan&es "eca*se of chan&es in

%an*fact*e#,) Pofits fl*ct*ate with salesC) An i#le facilit' vaiation is calc*late#D) Po#*ct costs incl*#e Q#iect vaia"le a#%inistative costs

8?) 3hich of the followin& is not t*e of vaia"le costin&4A) Pofits %a' incease tho*&h sales #ecease,) Pofits fl*ct*ate with salesC) The cost of the po#*ct consists of all vaia"le po#*ction costsD) The inco%e state%ent *n#e vaia"le costin& #oes not incl*#e oveh

2() The followin& info%ation was e$tacte# fo% the fist 'ea of a"soption!"eco#s of NOBI Co)

Total fi$e# costs inc*e#

Total vaia"le costs inc*e#

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15/67


Total peio# costs inc*e# )=>+>>>Total vaia"le peio# costs inc*e# 7>+>>>@nits po#*ce# 2>+>>>@nits sol# (2+>>>@nit sales Pice P (2

,ase# on vaia"le costin&+ if NOBI Co%pan' ha# sol# (2+>>( *nits instea# of (2+>>>+ itsinco%e "efoe ta$es wo*l# have "eenA) P );> hi&he C) P?);> hi&he,) P(()>> hi&he D) P?)77 hi&he

8) Coo Co%pan' %an*fact*es a sin&le po#*ct *sin& stan#a# costin&) Vaia"le po#*ctioncosts ae P(2 an# fi$e# po#*ction costs ae P(2;+>>>) Coo *ses a no%al activit' of (2+;>>*nits to set its stan#a# costs) Coo "e&an the 'ea with (+>>> *nite in invento'+ po#*ce#((+>>> *nits+ an# sol# ((+;>> *nits)The stan#a# cost of &oo#s sol# *n#e vaia"le costin& wo*l# "eA) P((;+>>> C) P282+>>>,) P(7?+>>> D) P2;7+>>>

A"soption Costin&(;) 3hen a fi% pepaes financial epots "' *sin& a"soption costin&

A) pofits will alwa's incease with incease in sales,) pofits will alwa's #ecease with #eceases in salesC) pofits %a' #ecease with incease# sales even if thee is no chan&e in sellin& pices an#

costsD) #ecease# o*tp*t an# constant sales es*lt in incease# pofits

(?) 3est Co)5s 2>>> %an*fact*in& costs wee as follows9Diect %ateials an# #iect la"o P =>>+>>>Othe vaia"le %an*fact*in& costs (>>+>>>Depeciat ion of facto' "*i l#in& an# %an*fact*in& e1*ip%ent ?>+>>>Othe fi$e# an# %an*fact*in& ovehea# (?+>>>

3hat a%o*nt sho*l# "e consi#ee# po#*ct cost fo e$tenal epotin& p*poses4A) P =>>+>>> C) P??>+>>>,) P?>>+>>> D) P??+>>>

(

Diect la"o In#iect la"o vaia"le Othe vaia"le facto' ovehea# Fi$e# facto' ovehea#Vaia"le sellin& e$pensesFi$e# sellin& e$penses

D*in& the peio#+ the co%pan' po#*ce# an# sol# (+>>> *nits)3hat is the invento' cost pe *nit *sin& a"soption costin&4A) P;2> C) P82>

,) P7;> D) P7(>

;>) Col&e Co%pan' %an*fact*e a sin&le po#*ct *sin& stan#a# costin&costs ae P(2 an# fi$e# po#*ction costs ae P(2;+>>>) Col&e *ses (2+;>> *nits to set its stan#a# costs) Col&e "e&an the 'ea with (+>>po#*ce# ((+>>> *nits+ an# sol# ((+;>> *nits) The stan#a# costs oa"soption costin& wo*l# "eA) P((;+>>> C) P282+>>>,) P(72+>>> D) P2;7+>>>

;() The Tin0ets Co%pan' esti%ate# the followin& #ata fo the co%in& 'ea9Fi$e# %an*fact*in& costsVaia"le po#*ction costs pe peso of sales

Mateials

Diect la"oVaia"le ovehea#Vaia"le sellin& costs pe peso of sales

Tin0ets esti%ates its sales fo the co%in& 'ea to "e P2+>>>+>>>)The e$pecte# costs of &oo#s sol# fo the co%in& 'ea isA) P(+2>> C) P(+((;+>>>,) P(+;>> D) P=>>+>>>

;2) Al%a Co%pan' "*#&ete# that facto' ovehea# fo 2>>8 an# 2>>; wo*l#'ea) The pe#icte# an# act*al activit' fo 2>>8 an# 2>>; wee 7>+>>> anho*s+ espectivel')

2>>8

Sales in *nits 2;+>>>

Sellin& pice pe *nit P(>

Apil (>;


16/67


Diect %ateials an# #iect la"o pe *nit P; P;

The co%pan' ass*%es that the lon&!*n po#*ction level is 2>+>>> #iect la"o ho*s pe 'ea)The act*al facto' ovehea# cost fo the en# of 2>>8 an# 2>>; was P+>>>) Ass*%e that itta0es one #iect la"o ho* to %a0e one finishe# *nit)3hen the ann*al esti%ate# facto' ovehea# ate is *se#+ the &oss pofits fo 2>>8 an# 2>>;+espectivel'+ aeA) P=;+>>> an# P=;+>>> C) =;+>>> an# P;;+>>>,) P(2;+>>> an# P(2;+>>> D) P=;+>>> an# P;>+>>>

(8) Apo Co%pan'5s vaia"le costin& inco%e state%ent fo A*&*st appeas "elow9Sales P(; pe *nit P>+>>>Bess vaia"le costs9 Vaia"le cost of &oo#s sol#9 ,e&innin& invento' P =2+>>> A## vaia"le cost of &oo#s %an*fact*e# 7(;+>>> Goo#s availa"le fo sale 7?=+>>> Bess en#in& invento' 2=+>>> Vaia"le cost of &oo#s sol# 7+>>> Vaia"le sellin& e$penses ?>+>>> Total vaia"le costs 88>+>>>Conti"*tion %a&in (+>>>Fi$e# costs9 Fi$e# %an*fact*in& P (>;+>>>

Fi$e# sellin& an# a#%inistative 7;+>>> Total fi$e# costs (8>+>>> Net inco%e P 2>+>>>

The co%pan' po#*ces 7;+>>> *nits each %onth) Vaia"le po#*ction costs pe *nit an# totalfi$e# costs have e%aine# constant ove the past seveal %onths)@sin& the a"soption costin& %etho#+ the peso val*e of the co%pan'5s invento' on A*&*st 7(an# the a"soption inco%e+ espectivel'+ wo*l# "e

A) ,) C) D)

Invento' Val*e P2=+>>> P2=+>>> P7>> P7>>A"soption Inco%e P7;+>>> P ;+>>> P ;+>>> P7;+>>>

;8) Nivana Co) e%plo's a no%al nonstan#a# a"soption cost s'ste%) The info%ation "elow isfo% the financial eco#s of the co%pan' fo the 'ea)

Total %an*fact*in& costs wee P2+;>>+>>>

Costs of &oo#s of %an*fact*e# was P2+82;+>>>

Applie# facto' ovehea# was 7> pecent of total %an*fact*in& costs

Facto' ovehea# was applie# to po#*ction at a ate of ?> of #iect

3o0!in!pocess invento' at an*a' ( was =; of wo0!in!p

Dece%"e 7(3hat ae the a%o*ntsval*e of the followin& cost ele%ents an# invento'4

Diect la"o Diect %ateials 3o0!in!po

A) P=;>+>>> P=;>+>>> P2,) P7=+;>> P?(2+;>> P2C) P7=+;>> P?(2+;>> P7D) P=;>+>>> P=;>+>>> P7

Vaia"le 6 A"soption Costin&;;) Bo# In#*sties %an*fact*es a sin&le po#*ct) Vaia"le po#*ction cos

po#*ction costs ae P=;+>>>) Bo# *ses a no%al activit' of (>+>>> *nicosts) Bo# "e&an the 'ea with no invento'+ po#*ce# ((+>>> *nits anThe vol*%e vaiance *n#e each po#*ct costin& ae9

A) ,) C)

@n#e A"soption Costin& P7+=;> P7+=;> P=+;>>@n#e Vaia"le Costin& > =+;>> 7+=;>

;

Act*al costs9Diect %ateials

Diect la"o

Apil (>;


17/67


Vaia"le ovehea# 27+>>>Fi$e# (?+>>>Vaia"le sellin& an# a#%) +>>>Fi$e# sellin& an# a#%) 7;+>>>

Vaiances ae close# to cost of sales %onthl':ow %*ch ae the net inco%e *n#e a"soption costin& an# vaia"le costin& %etho#s4

A) ,) C) D)

A"soption P(88+>>> P(87+>>> P(88+>>> P(82+>>>Vaia"le P(87+>>> P(88+>>> P(82+>>> P(88+>>>

Vaia"le vs) A"soption Costin&?) A"soption costin& #iffes fo% vaia"le costin& in that M

A) stan#a#s can "e *se# with a"soption costin& "*t not with vaia"le costin&),) a"soption costin& inventoies ae %oe coectl' val*e#+C) po#*ction infl*ences inco%e *n#e a"soption costin&+ "*t not *n#e vaia"le costin&)D) co%panies *sin& a"soption costin& have lowe fi$e# costs)

(2) A %an*fact*in& fi% pesentl' has total sales of P(+>>>+>>>) If its sales ise+ itsA) net inco%e "ase# on vaia"le costin& will &o *p %oe than its net inco%e "ase# on

a"soption costin&),) net inco%e "ase# on a"soption costin& will &o *p %oe than its net inco%e "ase# on

vaia"le costin&)C) fi$e# costs will also ise)D) pe *nit vaia"le costs will ise)

) 3hich of the followin& isae closel' elate# to vaia"le costin& than to a"soption costin&4 M() Pe#ete%ine# fi$e# ovehea# ;) Goss %a&in2) @nit sales >> Si%ple Cop) %an*fact*e# ;+>>> *nits an# sol#"e&innin& o en#in& wo0!in!pocess invento') :ow %*ch la&e o sCop)-s inco%e "e if it *ses a"soption athe than vaia"le costin&4

A) The a"soption costin& inco%e wo*l# "e P>> la&e,) The a"soption costin& inco%e wo*l# "e P>> s%alleC) The a"soption costin& inco%e wo*l# "e P8+?>> la&eD) The a"soption costin& inco%e wo*l# "e P8+>>> s%alle

;) The followin& info%ation has "een e$tacte# fo% P Co)5s financial ecoopeations9

@nits po#*ce#@nits sol#Vaia"le cost pe *nit9

Diect %ateialsDiect la"oFacto' ovehea#SG6A

Fi$e# costs9

Apil (>;


18/67


Man*fact*in& ovehea# P=>+>>>SG6A 7>+>>>

,ase# on a"soption costin&+ P Co)5s inco%e in its fist 'ea of opeations will "eA) P2(+>>> hi&he than it wo*l# "e *n#e vaia"le costin&,) P=>+>>> hi&he than it wo*l# "e *n#e vaia"le costin&C) P7>+>>> hi&he than it wo*l# "e *n#e vaia"le costin&D) :i&he than it wo*l# "e *n#e vaia"le costin&+ "*t the e$act #iffeence cannot "e

#ete%ina"le fo% this info%ation

) Val'n Copoation e%plo's an a"soption costin& s'ste% fo intenal epotin& p*poseshoweve+ the co%pan' is consi#ein& *sin& vaia"le costin&) Data e&a#in& Val'n-s planne#an# act*al opeations fo the 2>>( calen#a 'ea ae pesente# "elow)

Planne# activi t' Act*al act ivit'

,e&innin& finishe# &oo#s invento' in *nits 7;+>>> 7;+>>>Sales in *nits (8>+>>> (2;+>>>Po#*ction in *nits (8>+>>> (7>+>>>

The planned per unit cost figures shown in the next schedule were based on

the estimated production and sale of 140,000 units in 2001. Valyn uses a

predetermined manufacturing overhead rate for applying manufacturing

overhead to its product thus, a combined manufacturing overhead rate of !".00 per unit was employed for absorption costing purposes in 2001. #ny

over$or under applied manufacturing overhead is closed to the cost of goods

sold account at the end of the repotting year.Planne# costs Inc*e#

Pe *nit Total CostsDiect %ateials P(2)>> P(++>>> P(+;+>>>

Diect la"o )>> (+2+>>> (+(=>+>>>Vaia"le %an*fact*in& ovehea# 8)>> ;+>>> ;2>+>>>Fi$e# %an*fact*in& ovehea# ;)>> =>>+>>> =(;+>>>Vaia"le sellin& e$penses ?)>> (+(2>+>>> (+>>>+>>>

Fi$e# sellin& e$penses =)>> ?>+>>> ?>+>>>Vaia"le a#%inistative e$penses 2)>> 2?>+>>> 2;>+>>>Fi$e# a#%inistative e$penses 7)>> 82>+>>> 82;+>>>

Total P;>)>> P=+>>>+>>> P>>

The 2>>( "e&innin& finishe# &oo#s invento' fo a"soption costin& p*poses was val*e# atthe (? planne# *nit %an*fact*in& cost+ which was the sa%e as the 2>>( planne# *nit

%an*fact*in& cost) Thee ae no wo0!in!pocess inventoies at eithe en# of the 'ea) The planne# an# act*al *nit sellin& pice fo 2>>( was P=The #iffeence "etween Val'n Copoations 2>>( opeatin& inco%ea"soption costin& "asis an# calc*late# on the vaia"le costin& "asis wasA) P>> C) P8>+>>>,) P2;+>>> D) P>+>>>

Standard Costing $ ariance Analysis,asic Concepts

(2) No%al costin& an# stan#a# costin& #iffe in that MA) the two s'ste%s can show #iffeent ovehea# "*#&et vaiances),) onl' no%al costin& can "e *se# with a"soption costin&)C) the two s'ste%s show #iffeent vol*%e vaiances if stan#a# ho*s

ho*s)D) no%al costin& is less appopiate fo %*ltipo#*ct fi%s)

;


19/67


D) En&ineein& stan#a#s "ase# on attaina"le pefo%ance

calc*late# on inp*t 1*antities+ when the cloth is c*t fo asse%"l') The cost of the cloth is P7pe 'a#) The stan#a# #iect %ateial cost fo cloth pe *nit of finishe# po#*ct is9 MA) P8)?> C) P=)>>,) P> D) P=);>

( waste allowance) The aw %ateial can "e p*chase# fo P2);> apo*n# *n#e te%s of 2(>+ n7>) The co%pan' ta0es all cash #isco*nts) The stan#a# #iect%ateial cost fo each *nit of Spin& is

A) P(?>)>> C) P(?7)=;,) P(?=);> D) P(=

(=) A&*san Co%pan' *ses a stan#a# costin& s'ste% in connection with %an*fact*e of a Qonesi/e fits all aticle of clothin&) Each *nit of finishe# po#*ct contains 2 'a#s of #iect %ateial):oweve+ a 2> #iect %ateial spoila&e calc*late# on inp*t 1*antities occ*s #*in& the%an*fact*in& pocess) The cost of the #iect %ateial is P(;> pe 'a#) The stan#a# #iect%ateial cost pe *nit of finishe# po#*ct isA) P28> C) P7,) P7>> D) P7=;

>>) D*in& the 'ea+ 7>>+>>> po*n#s of this %ateial wase1*isitione# fo po#*ction) The %ateials 1*antit' vaiance was *nfavoa"le "' P((+2>>) The

stan#a# cost of %ateials that sho*l# have "een *se# in po#*ction was

A) P87>+2>> C) P;;;+2>>,) P;;(+;>> D) 8>?+?>>

of %a$i%*% capacit') 3ha

facto' ovehea# ate+ "ase# on #iect la"o ho*s+ in a fle$i"le "*#&et at Apil (>;


20/67


A) P(?)=; C) P(>

() Seafin Co%pan' is pepain& a fle$i"le "*#&et fo 2>>8 an# the followin& %a$i%*% capacit'esti%ates fo Asse%"l' Depat%ent ae availa"le9

Diect la"o ho*s ?>+>>> ho*sVaia"le facto' ovehea# P+>>>Fi$e# %an*fact*in& ovehea# P7>>+>>>

Ass*%e that Seafin5s e$pecte# capacit' is =; of %a$i%*% capacit') 3hat wo*l# "e the

total facto' ovehea# ate+ "ase# on #iect la"o ho*s+ in a fle$i"le "*#&et at e$pecte#capacit'4A) P(7)>> C) P(()=;,) P(;)>

Mateials VaiancePrice variance=>) Info%ation on Ene&'5s #iect %ateial costs fo Octo"e is as follows9

Act*a l 1*antit' of #iect %a te ials p*chase# an# *se# 7>+ >>> l"s)Act*al cost of #iect %ateials P2+>>>@nfavoa"le #iect %ateials *sa&e vaiance P 7+>>>Stan#a# 1*antit' of #iect %ateials allowe# fo Ma' po#*ction 2+>>> l"s

Fo the %onth of Octo"e+ Ene&'5s #iect %ateials pice vaiance was9A) P7+>>> favoa"le C) P2+>>> *nfavoa"le

,) P2+>>> favoa"le D) P2+>>> favoa"le

(() Info%ation on Miia%5s #iect %ateial costs fo Ma' is as follows9Act*a l 1*an tit' of #iect %at eia ls p*chase# an# *se# 7>+>>> l"s)Act*al cost of #iect %ateials P?8+>>>@nfavoa"le #iect %ateials *sa&e vaiance P 7+>>>Stan#a# 1*antit' of #iect %ateials allowe# fo Ma' po#*ction 2+>>> l"s

Fo the %onth of Ma'+ Miia%5s #iect %ateials pice vaiance was9A) P2+?>> favoa"le C) P>> *nfavoa"le,) P2+?>> *nfavoa"le D) P>> favoa"le

$uantit% #ariance(;) Co$ Co%pan'-s #iect %ateial costs fo the %onth of an*a' wee as follows9

Act*al 1*antit' p*chase# (?+>>> 0ilo&a%s

Act*al *nit p*chase pice P 7) pe 0ilo&a%

Mate ia ls pice va iance *nfavoa"le "ase# on p* chases Stan#a# 1*antit' allowe# fo act*al po#*ction (Act*al 1*antit' *se# (

Fo an*a' thee+ was a favoa"le #iect %ateial 1*antit' vaiance of9 MA) P7+7 C) P7+8>>,) P7+7=; D) P7+?>>

Standard &uantit% =() Ra%ie has a stan#a# pice of P;);> pe po*n# fo %ateials) *l'-s

*nfavoa"le %ateial pice vaiance of P88 an# a favoa"le 1*antit' vaiapo*n#s wee *se# in po#*ction+ what was the stan#a# 1*antit' allowe# A) (+(>8 C) (+>=8,) (+>>

(?) The ,ohol Co%pan' *ses stan#a# costin&) The followin& #ata ae availaAct*al 1*antit' of #iect %ateials *se#Stan#a# pice of #iect %ateialsMateial 1*antit' vaiance P(

The stan#a# 1*antit' of %ateial allowe# fo Octo"e po#*ction isA) 27+>>> l"s C) 28+;>> l"s,) 28+>>> l"s D) 2;+>>> l"s

Units produced

=2) Silve Co%pan' has a stan#a# of (; pats of Co%ponent R costin&p*chase# (8+(> *nits of R fo P22+(8;) Silve &eneate# a P22> favoan# a P7+=7; favoa"le *sa&e vaiance) If thee wee no chan&es iinvento'+ how %an' *nits of finishe# po#*ct wee po#*ce#4A) 8 *nits C) (+=2; *nits,) (+( *nits D) ?2? *nits

Mix ' (ield #ariance=7) ta Jlean %an*fact*es a cleanin& solvent) The co%pan' e%plo's "oth

wo0es) S0ille# wo 0es class C ae pai# P(2 pe ho*+ while *ns0ille# pai# P= pe ho*) To po#*ce one ;;!&allon #*% of solvent e1*ies 8 an# 2 ho*s of *ns0ille# la"o) The solvent e1*ies 2 #iffeent %atestan#a# an# act*al %ateial info%ation is &iven "elow9

Stan#a#9

Mateial A9 7>)2; GABBONS P()2; pe &allonApil (>;


21/67


Mateial ,9 28)=; &allons P2)>> pe &allon

Act*al9Mateial A9 (>+=(< &allons p*chase# an# *se# P();> &allonMateial ,9 (=+8?8 &allons p*chase# an# *se# P()> pe &allonS0ille# la"o ho*s9 (+;> P(()> pe ho*@ns0ille# la"o ho*s9 (+7>> P=)(; pe ho*

D*in& the c*ent %onth ta Jlean %an*fact*e# five h*n#e# ;;!&allon #*%s) Ro*n# allanswes to the neaest whole peso

%hat are the total materials mix variance and material yield variance&A) ,) C) D)

Mi$ P7+;< @ P7+;< F P8+?>>

*nits of the po#*ct wee %a#e an# the la"o efficienc' vaiance was P?+>>> F) The act*aln*%"e of ho*s wo0e# #*in& the past peio# was9 MA) 27+;>> C) 2>+;>>,) 22+;>> D) 2(+;>>

=;) Stas Co%pan' *ses a stan#a# cost s'ste%) Info%ation a"o*t its #iect la"o costs foPo#*ct Mas fo the %onth of Apil follows9

Stan#a# ho*s allowe# fo act*al po#*ction (+;>>Act*al ho*l' ate pai# P>

Stan#a# ho*l' ate Ba"o efficienc' vaiance+ Favoa"le

:ow %an' #iect la"o ho*s wee act*all' wo0e# #*in& the %onth of ApA) (+8>> C) (+8?,) (+8>2 D) (+>

=,) (>+=(8 D) ((+2>>

Standard hours allo*ed (7) The Caea Copoation %a0es a vaiet' of leathe &oo#s) It *ses st

fle$i"le "*#&et to ai# plannin& an# contol) ,*#&ete# vaia"le oveheala"o ho* level is P2=+>>>)D*in& Apil %ateial p*chases wee P28(+>>) Act*al #iect!la"o P(8>+=>>) The #iect!la"o *sa&e vaiance was P;+(>> *nfavoa"le) wa&e ate was P>)2> lowe than the ave a&e stan#a# wa&e ate)The co%pan' *ses a vaia"le ovehea# ate of 2> of stan#a# #iect!"*#&etin& p*poses) Act*al vaia"le ovehea# fo the %onth was P7>+=;>3hat wee the stan#a# ho*s allowe# #*in& the %onth of Apil4A) ;>+2;> C) 8?+;;>,) ;?+

Standard rateApil (>;


22/67


==) Anne ha# a P=;> *nfavoa"le #iect la"o ate vaiance an# an P?>> favoa"le efficienc'vaiance) Anne pai# P=+(;> fo ?>> ho*s of la"o) 3hat was the stan#a# #iect la"o wa&eate4A) P?)8 C) P=)8,) P?)>> D) P=)?>

Two!3a' Ovehea# Vaiance!udget or Controllable #ariance22) 3hich of the followin& ae consi#ee# contolla"le vaiance4

A) ,) C) D)VO: Spen#in& Yes No No YesTotal Ovehea# ,*#&et Yes No Yes YesVol*%e Yes Yes No No

=?) If act*al ovehea# is P(8+>>>+ ovehea# applie# is P(7+8>>+ an# ovehea# "*#&ete# fo thestan#a# ho*s allowe# is P(;+>+ then the ovehea# contolla"le vaiance isA) P> F C) P(+> F,) P2+2>> @ D) P(+> @

(=) The stan#a# costs an# act*al costs fo facto' ovehea# fo the %an*fact*e of 2+;>> *nits ofact*al po#*ction ae as follows9Stan#a# cost

Fi$e# ovehea# "ase# on (>+>>> ho*s 7 ho*s P)?> pe ho*

Vaia"le ovehea# 7 ho*s P2 pe ho*Act*al cost

Total vaia"le cost P(?+>>>Total fi$e# cost P?+>>>

The a%o*nt of the facto' ovehea# contolla"le vaiance is MA) P2+>>> *nfavoa"le C) P>,) P7+>>> favoa"le D) P7+>>> *nfavoa"le

(;) GMA Co%pan' e%plo's a stan#a# a"soption s'ste% fo po#*ct costin&) The stan#a# costof its po#*ct is as follows9

Diect %ateials P(8);>Diect la"o 2 #iect la"o ho*s at P? (>Man*fact*in& ovehea# 2 DB: at P(( 22)>>

The %an*fact*in& ovehea# ate is "ase# *pon a no%al activit' level of >+>>> #iect la"o

ho*s) o0e planne# to po#*ce 2;+>>> *nits each %onth #*in& the 'ea) The "*#&ete#

ann*al %an*fact*in& ovehea# is9Vaia"leFi$e#

D*in& Nove%"e+ GMA po#*ce# 2>> *nits) GMA *se# ;7+;>> Nove%"e at a cost of P877+7;>) Act*al %an*fact*in& ovehea# fo the fi$e# an# P72;+>>> vaia"le)The %an*fact*in& ovehea# contolla"le vaiance fo Nove%"e isA) P(7+>>> *nfavoa"le C) P7+>>> favoa"le,) P(>+>>> favoa"le D) P8+>>> favoa"le

=) Cal%a Co%pan' *ses a stan#a# cost s'ste%) The followin& "*#&et+ at nthe act*al es*lts ae s*%%ai/e# fo the %onth of Dece%"e9

Diect la"o ho*sVaia"le facto' O:Fi$e# facto' O:Total facto' O: pe DB:

Act*al #ata fo Dece%"e wee as follows9Diect la"o ho*s wo0e# Total facto' O:Stan#a# DB:s allowe# fo capacit' attaine#

@sin& the two!wa' anal'sis of ovehea# vaiance+ what is the contolla"le Dece%"e4

A) P7+>>> Favoa"le C) P +>>> Favoa"le,) P;+>>> Favoa"le D) P(>+;>> @nfavoa"le

#olume #ariance(7) The *nfavoa"le vol*%e vaiance %a' "e #*e to all "*t which of the follow

A) fail*e to %aintain an even flow of wo0,) %achine "ea0#ownsC) *ne$pecte# inceases in the cost of *tilitiesD) fail*e to o"tain eno*&h sales o#es

2>) :ow will a favoa"le vol*%e vaiance affect net inco%e *n#e each of the

A) ,) C)

A"soption Re#*ce Re#*ce InceaseVaia"le No effect Incease No effect

Apil (>;


23/67


?>) The fi$e# ovehea# application ate is a f*nction of a pe#ete%ine# Kno%alK activit' level) Ifstan#a# ho*s allowe# fo &oo# o*tp*t e1*al this pe#ete%ine# activit' level fo a &ivenpeio#+ the vol*%e vaiance will "eA) /eo,) favoa"leC) *nfavoa"leD) eithe favoa"le o *nfavoa"le+ #epen#in& on the "*#&ete# ovehea#

(?) The stan#a# facto' ovehea# ate is P=);> pe %achine ho* P fo vaia"le facto'

ovehea# an# P()7> fo fi$e# facto' ovehea# "ase# on (>> capacit' of ?>+>>> %achineho*s) The stan#a# cost an# the act*al cost of facto' ovehea# fo the po#*ction of (;+>>>*nits #*in& A*&*st wee as follows9

Act*al9Vaia"le facto' ovehea# P7+>>>Fi$e# facto' ovehea# (>8+>>>

Stan#a# ho*s allowe# fo *nits po#*ce#9+>>> ho*s at P=);> 8;>+>>>

3hat is the a%o*nt of the facto' ovehea# vol*%e vaiance4 MA) P(2+>>> *nfavoa"le C) P(8+>>> *nfavoa"le,) P(2+>>> favoa"le D) P2>> *nfavoa"le

?() :eo Co%pan' *ses a fle$i"le "*#&et s'ste% an# pepae# the followin& info%ation fo the'ea9

Pecent of Capacit' ?> Pecent > PecentDiect la"o ho*s 28+>>> 2=+>>>

Vaia"le facto' ovehea# P ;8+>>> P +=;>

Fi$e# facto' ovehea# P(>?+>>> P (>?+>>>

Total facto' ovehea# ate pe DB: P pecent capacit' level)Ass*%in& that act*al facto' ovehea# was e1*al to the "*#&ete# a%o*nt of ovehea#+ how%*ch was the ovehea# vol*%e vaiance fo the 'ea4A) P(2+>>> *nfavoa"le C) P( *nfavoa"le,) P(2+>>> favoa"le D) P( favoa"le

?2) Meteo Co%pan' e%plo's a stan#a# a"soption s'ste% fo po#*ct costin&) The stan#a#

cost of its po#*ct is as follows9

Diect %ateialsDiect la"o 2 #iect la"o ho*s at PMan*fact*in& ovehea# 2 DB: at P(2

The %an*fact*in& ovehea# ate is "ase# *pon the ann*al no%al activit'#iect la"o ho*s) Meteo planne# to po#*ce 2;+>>> *nits each %onth #"*#&ete# ann*al %an*fact*in& ovehea# is9

Vaia"leFi$e#

D*in& Nove%"e+ Meteo po#*ce# 2>> *nits) Meteo *se# ;7+;>> #i

Nove%"e at a cost of P877+7;>) Act*al %an*fact*in& ovehea# fo the %fi$e# an# P72;+>>> vaia"le)The %an*fact*in& ovehea# vol*%e vaiance fo Nove%"e isA) P(>+>>> *nfavoa"le C) P;+>>> *nfavoa"le,) P(>+>>> favoa"le D) P;+>>> favoa"le

!udgeted Overhead ?7) Jala Co%pan' *se an ann*al cost fo%*la fo ovehea# of P=2+>>> H

la"o ho* wo0e#) Fo the *pco%in& %o*th Jala plans to %an*fact*e*nit e1*ies five %in*tes of #iect la"o) Jala-s "*#&ete# ovehea# fo theA) P(2+?>> C) P?8+?>>,) P(?+?>> D) P==8+>>>

!udgeted ixed costs

?8) CTV Co%pan' has a stan#a# fee# cost of P< pe *nit) At an act*al po#*favoa"le vol*%e vaiance of P (2+>>> es*lte#) 3hat wee total "*#&ete#A) P7>> C) P+>>>,) P8?+>>> D) P=;+>>>

27) The Aa'at Co%pan' %a0es an# sells a sin&le po#*ct an# *ses stan#a#an*a'+ the co%pan' act*all' *se# ?+=>> #iect la"o!ho*s DB:s an# of po#*ct) The stan#a# cost ca# fo one *nit of po#*ct incl*#es the fol

Vaia"le facto' ovehea#9 7)> DB:s Fi$e# facto' ovehea#9 7)> DB:s

Fo an*a'+ the co%pan' inc*e# P22+>>> of act*al fi$e# ovehea# cP?=; favoa"le vol*%e vaiance)The "*#&ete# fi$e# ovehea# ovehea# cost fo an*a' isA) P7(+;>> C) P72+7=;

,) P7>+Apil (>;


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+ormal Capacit% ?;) So*th Co%pan' has total "*#&ete# fi$e# costs of P=;+>>>) Act*al po#*ction of (+;>> *nits

es*lte# in a P7+>>> favoa"le vol*%e vaiance) 3hat no%al capacit' was *se# to #ete%inethe fi$e# ovehea# ate4A) (> C) 2>+7(7,) (?+=;> D) 2>+72;

*estions ?< 6 ?= ae "ase# on the followin& info%ation)

B*c0' Co%pan' sets the followin& stan#a#s fo 2>>79Diect la"o cost 2 DB: P8);> P)>>Man*fact*in& ovehea# 2 DB: P=);> (;)>>

B*c0' Co%pan' plans to po#*ce its onl' po#*ct e1*all' each %onth) The ann*al "*#&et foovehea# costs ae9

Fi$e# ovehea# P(;>+>>>Vaia"le ovehea# 7>>+>>>No%al activit' in #iect la"o ho*s +>>>

In Mach+ B*c0' Co%pan' po#*ce# 2+8;> *nits with act*al #iect la"o ho*s *se# of ;+>;>) Act*alovehea# costs fo the %onth a%o*nte# to P7=+28; Fi$e# ovehea# is as "*#&ete#)

? *nfavoa"le C) P=;> *nfavoa"le,) P;>> *nfavoa"le D) P7=; *nfavoa"le

?=) The contolla"le ovehea# vaiance wasA) P;>; favoa"le C) P28; favoa"le,) P;>; *nfavoa"le D) P28; favoa"le

Thee!3a' Ovehea# Vaiance??) The followin& #ata ae the act*al es*lts fo ,*stos Co%pan' fo the %onth of Ma'9

Act*al o*tp*t 8+;>> *nitsAct*al vaia"le ovehea# P7+>>>Act*al fi$e# ovehea# P(>?+>>>Act*al %achine ti%e (8+>>> M:

Stan#a# cost an# "*#&et info%ation fo ,*stos Co%pan' follows9Stan#a# vaia"le ovehea# ate P> pe M:Stan#a# 1*antit' of %achine ho*s 7 ho*s pe *nit

,*#&ete# fi$e# ovehea# P===+> pe 'ea

,*#&ete# o*tp*t 8+?>The ovehea# efficienc' vaiance isA) P7+>>> Favoa"le C) P;+8>> Favoa"le,) P7+>>> @nfavoa"le D) P;+8>> @nfavoa"le

2> *nits+ *sin& ((+; l wa&e of P((7+?=> an# inc*in& P??+> in vaia"le ovehea#) Thvaiances ae9

A) ,) C)

Spen#in& P(+>> F P(+>> @ P(+8>> FEfficienc' P7+7>> @ P7+7>> F P(+>> F

*estions 28 6 2; ae "ase# on the followin& info%ation)Richa# Co%pan' e%plo's a stan#a# a"soption s'ste% fo po#*ct costin&) its po#*ct is as follows9

Raw %ateialsDiect la"o 2 DB: $ P? Man*fact*in& ovehea# 2 DB: $ P((

Total stan#a# costThe %an*fact*in& ovehea# ate is "ase# *pon a no%al activit' level of >+>ho*s) Richa# planne# to po#*ce 2;+>>> *nits each %onth #*in& the 'ea) ann*al %an*fact*in& ovehea# is9

Vaia"le P7+>+>>>Fi$e# 7+>>>+>>>

D*in& Nove%"e+ Richa# po#*ce# 2>> *nits) Ric ha# *se# ;7+;>> #iecNove%"e at a cost of P877+7;>) Act*al %an*fact*in& ovehea# fo the %ontfi$e# an# P7(;+>>> vaia"le) The total %an*fact*in& ovehea# applie# #*in&P;=2+>>>)

28) The fi$e# %an*fact*in& ovehea# vol*%e vaiance fo Nove%"e isA) P(>+>>> favoa"le C) P7+>>> *nfavoa"le,) P(>+>>> *nfavoa"le D) P22+>>> favoa"le

Apil (>;


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2;) The total vaiance elate# to efficienc' of the %an*fact*in& opeation fo Nove%"e isA) P+>>> *nfavoa"le C) P2(+>>> *nfavoa"le,) P(2+>>> *nfavoa"le D) P((+>>> *nfavoa"le

Thee!3a' Ovehea# Vaiance Vaia"le O: Spen#in&+ Fi$e# O: ,*#&et+ Vol*%e?) Alene ha# an P(?+>>> *nfavoa"le vol*%e vaiance+ a P2;+>>> *nfavoa"le vaia"le

ovehea# spen#in& vaiance+ an# P2+>>> total *n#e applie# ovehea#) The fi$e# ovehea#"*#&et vaiance isA) P8(+>>> favoa"le C) P8(+>>> *nfavoa"le

,) P8;+>>> favoa"le D) P8;+>>> *nfavoa"le

Fo*!3a' Ovehea# Vaiance#ariable overhead spending variance(?) ,alti%oe+ Inc) anal'/es %an*fact*in& ovehea# in the po#*ction of its onl' one po#*ct+ ,l*)

The followin& set of info%ation applies to the %onth of Ma'+ 2>>79

,*#&ete# Act*al

@nits po#*ce# 8>+>>> 7?+>>>Vaia"le %an*fact*in& ovehea# P8DB: P(>Fi$e# %an*fact*in& ovehea# P2>DB: P??+>>>Diect la"o ho*s < %in*tes*nit 8+2>> ho*s

:ow %*ch was the vaia"le ovehea# spen#in& vaiance4A) P8>> Favoa"le C) P(+2>> Favoa"le,) P8>> @nfavoa"le D) P(+2>> @nfavoa"le

*estions ( 6 2> ae "ase# on the followin& info%ation)The Cla0 Co%pan' %a0es a sin&le po#*ct an# *ses stan#a# costin&) So%e #ata concenin& thispo#*ct fo the %onth of Ma' follow9

Ba"o ate vaiance P=+>>> FBa"o efficienc' vaiance P(2+>>> FVaia"le ovehea# efficienc' vaiance P8+>>> FN*%"e of *nits po#*ce# (>+>>>Stan#a#K la"o ate pe #iect la"o ho* P(2Stan#a# vaia"le ovehea# ate pe #iect la"o ho*9 P 8Act*al la"o ho*s *se#9 (8+>>>Act*al vaia"le %an*fact*in& ovehea# costs9 P;?+2>

() The vaia"le ovehea# spen#in& vaiance fo Ma' was9 M

A) P2+2> F C) P2+2> @

,) P(+=(> F D) P(+=(> @

2>) The stan#a# ho*s allowe# to %a0e one *nit of finishe# po#*ct ae9 MA) ()> C) ();,) ()2 D) ()7

#ariable overhead eicienc% variance>) Fan0lin Glass 3o0s+ po#*ction "*#&et fo the 'ea en#e# Nove%"e

on 2>>+>>> *nits) Each *nit e1*ies two stan#a# ho*s of la"o f

ovehea# was "*#&ete# at P>>+>>> fo the 'ea+ an# the fi$e# oveheato "e P7)>> pe *nit) ,oth fi$e# an# vaia"le ovehea# ae assi&ne# to"asis of #iect la"o ho*s) The act*al #ata fo the 'ea en#e# Novpesente# "elow)

Act*al po#*ction in *nitsAct*al #iect la"o ho*sAct*al vaia"le ovehea#Act*al fee# ovehea#

Fan0lin-s vaia"le ovehea# efficienc' vaiance fo the 'ea en#e# Nove%A) P77+>>> *nfavoa"le C) P> *nfavoa"le,) P7;+;2> favoa"le D) P77+>>> favoa"le

Fixed overhead spending variance() Bon& Co%pan' anal'/es its %an*fact*in& ovehea# in the po#*ction of

Shots) The followin& set of info%ation applies to the %onth of an*a' 2,*#&ete#

@nits po#*ce# 8>+>>>Vaia"le %an*fact*in& ovehea# P8DB:Fi$e# %an*fact*in& ovehea# P2>DB:Diect la"o ho*s < %in*tes*nit

3hat is the fi$e# ovehea# spen#in& vaiance4A) P;+>>> Favoa"le C) P(+> @nfavoa"le,) P(+> Favoa"le D) P;+>>> @nfavoa"le

(=) ,avo Copoation5s %aste "*#&et calls fo the po#*ction of ;+>>> *nitThe ann*al %aste "*#&et incl*#es in#iect la"o of P(88+>>> ann*ain#iect la"o to "e a vaia"le cost) D*in& the %onth of Apil+ 8+;>> *po#*ce#+ an# in#iect la"o costs of P(>+(>> wee inc*e#) A pefo%

fle$i"le "*#&etin& wo*l# epot a "*#&et vaiance fo in#iect la"o ofApil (>;


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A) P(+>> @nfavoa"le C) P=>> @nfavoa"le,) P(+>> Favoa"le D) P=>> Favoa"le

Applied ixed manuacturing overhead 2) Fi$e# %an*fact*in& ovehea# was "*#&ete# at P;>>+>>> an# 2;+>>> #iect la"o ho*s wee

"*#&ete#) If the fi$e# ovehea# vol*%e vaiance was P(2+>>> favoa"le an# the fi$e#ovehea# spen#in& vaiance was P(>> *nfavoa"le+ fi$e# %an*fact*in& ovehea# applie#%*st "eA) P;(>> C) P;>8+>>>

,) P;(2+>>> D) P8>>

Comprehensive*estions 7 th* ; ae "ase# on the followin& info%ation)The B*ste Co%pan' po#*ces its onl' po#*ct) Jool Chewin& G*%) The stan#a# ovehea# costsfo one pac0 of the po#*ct follows9

Fi$e# ovehea# ();> ho*s at P(?)>> P2=)>>Vaia"le ovehea# ();> ho*s at P(>)>> (;)>>

Tota l appl icat ion a te P82)>>B*ste *ses e$pecte# vol*%e of 2>+>>> *nits) D*in& the 'ea+ B*ste *se# 7(+;>> #iect la"oho*s fo the po#*ction of 2>+>>> *nits) Act*al ovehea# costs wee P;8;+>>> fi$e# an# P7>?+=>>vaia"le)

7) The a%o*nt of vaia"le ovehea# spen#in& vaiance is

A) P> Favoa"le C) P> @nfavoa"le,) P?+=>> Favoa"le D) P?+=>> @nfavoa"le

8) The total ovehea# contolla"le vaiance isA) P(7+=>> Favoa"le C) P(7+=>> @nfavoa"le,) P?+=>> Favoa"le D) P?+=>> @nfavoa"le

;) The ovehea# efficienc' vaiance isA) P22+;>> Favoa"le C) P22+;>> @nfavoa"le,) P(;+>>> Favoa"le D) P(;+>>> @nfavoa"le

%ross !rofit ariation Analysis>> ae

as follows9

Act*al E$pecte#

Sale in *nits (>+>>>Sellin& pice pe *nit P((Vaia"le e$pense pe *nit

3hat ae the pice vaiance an# pice vol*%e vaiance4

A) ,) C)

Sales Pice Vaiance P(>+>>> F P;+>>> F P;+>>> @Pice Vol*%e Vaiance P;+>>> F P(>+>>> @ P(>+>>>

Master Budget

,asic Concepts=) The "asic #iffeence "etween a %aste "*#&et an# a fle$i"le "*#&et is tha

A) Fle$i"le "*#&et consi#es onl' vaia"le costs "*t a %aste "*#&et co,) Fle$i"le "*#&et allows %ana&e%ent latit*#e in %eetin& &oals wheea

"ase# on a fi$e# stan#a#)C) Maste "*#&et is fo an entie po#*ction facilit' "*t a fle$i"le "*#&et

sin&le #epat%ent onl')D) Maste "*#&et is "ase# on one specific level of po#*ction an# a fle$i"

pepae# fo an' po#*ction level within a elevant an&e

?) eo!"ase "*#&etin& e1*ies %ana&es toA) *stif' e$pen#it*es that ae inceases ove the pio peio#5s "*#&et ,) *stif' all e$pen#it*es+ not .*st inceases ove last 'ea5s a%o*nt)C) Maintain a f*ll!'ea "*#&et intact at all ti%es)

D) Maintain a "*#&et with /eo inceases ove the pio peio#)

) A s'ste%ati/e# appoach 0nown as /eo!"ase# "*#&etin&a Pesents the plan fo onl' one level of activit' an# #oes not a#.*st to

of activit'),) Pesents a state%ent of e$pectations fo a peio# of ti%e "*t #oes no

co%%it%ent)C) Divi#es the activities of in#ivi#*al esponsi"ilit' centes into a seies o

ae an0e# o#inall')D) Classifies "*#&et e1*ests "' activit' an# esti%ates the "enefits aisi

27) ,*#&et slac0 is a con#ition in whichA) De%an# is low at vaio*s ti%es of the 'ea,) E$cess %achine capacit' e$ists in so%e aeas of the plant

Apil (>;

MANAGEMENT ADVISORY SERVICES CPA R i S h l f h Phili i Fi l P


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C) Thee is an intentional oveesti%ate of e$penses o an *n#eesti%ate of even*esD) Mana&es &ant favoe# e%plo'ees e$ta ti%e!off

(>>)3hen pepain& the seies of ann*al opeatin& "*#&ets+ %ana&e%ent *s*all' stats thepocess with theA) Cash "*#&et C) Sales "*#&et,) Po#*ction "*#&et D) Capital "*#&et

Po#*ction ,*#&et

(>()Isa"elle+ In#*sties plans to sell 2>>+>>> *nits of ,ati0 po#*cts in Octo"e an# anticipates a&owth in sales of ; pecent pe %onth) The ta&et en#in& invento' in *nits of the po#*ct is?> pecent of the ne$t %onth5s esti%ate# sales) Thee ae (;>+>>> *nits in invento' as of theen# of Septe%"e) The po#*ction e1*ie%ent in *nits of ,ati0 fo the 1*ate en#in&Dece%"e 7( wo*l# "eA) +; C) >>!2>>( fiscal 'ea "'

Plainfiel# Co%pan'+ the *nits of aw %ateial nee#e# to "e p*chase# wo*l# "e

A) (+>>>+>>> *nits C) (+>(>+>>> *nits,) (+>2>+>>> *nits D) >+>>> *nits

Cash ,*#&et(>;)At the "e&innin& of the c*ent %onth+ Rose ha# P(>>+>>>) Cash

P2+>+>>> an# cash collections wee P2+?;>+>>>) Rose invests all e$c%a0et f*n# an# has a line of ce#it to cove cash #eficiencies)If Rose wishes to stat the ne$t %onth with P(;>+>>>+ Rose %*stA) invest P2>>+>>> C) invest P7;>+>>>

,) "oow P8>>+>>> D) #o nothin&

(>7)The Man&o Co%pan' is pepain& its cash "*#&et fo the %onth of Ma') Tinfo%ation is availa"le concenin& its acco*nts pa'a"le9

Esti%ate# ce#it sales fo Ma'Act*al ce#it sales fo Apil Esti%ate# collections in Ma' fo ce#it sales in Ma' Esti%ate# collections in Ma' fo ce#it sales in ApilEsti%ate# collections in Ma' fo ce#it sales pio to ApilEsti%ate# wite!offs in Ma' fo *ncollecti"le ce#it salesEsti%ate# povision fo "a# #e"ts in Ma' fo c e#i t sales in Ma'

3hat ae the esti%ate# cash eceipts fo% acco*nts eceiva"le collectionsA) P(82+>>> C) P(;>+>>>,) P(8+>>> D) P(;=+>>>

2


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Dece%"e ?;+>>>The esti%ate# total cash collections #*in& the fo*th calen#a 1*ate fo% sales %a#e onopen acco*nt #*in& the fo*th calen#a 1*ate wo*l# "eA) P(=2+;>> C) P27>+>>>,) P2> D) P2;(+8>>

(>8)The Ma&ic Co%pan' is pepain& its cash "*#&et fo the %onth en#in& an*a' 7() Thefollowin& info%ation petains to Peace5s past collection e$peience fo% its ce#it sales9

C*ent %onth5s sales (2

Pio %onth5s sales =;Sales two %onths pio to c*ent %onth + net> 2Do*"tf*l acco*nts (Ce#it sales9 an*a' L esti%ate# P2+>>>+>>> Dece%"e (+?>>+>>> Nove%"e (+>+>>> Octo"e (+>>+>>>

:ow %*ch is the esti%ate# ce#it to Acco*nts Receiva"le as a es*lt of collections e$pecte##*in& an*a'4A) P(+=7>+2>> C) P(+=>>,) P(+=;=+2>> D) P(+?>2+>>>

(>Esti%ate# collections in Ma' fo ce#it sales pio to Apil P(;+>>>Esti%ate# wite!offs in Ma' fo *ncollecti"le ce#it sales ?+>>>Est i%ate# povision fo "a# #e"ts in Ma' fo c e#i t sales in Ma' =+>>>

3hat ae the esti%ate# cash eceipts fo% acco*nts eceiva"le collections in Ma'4A) P(82+>>> C) P(;=+>>>,) P(8+>>> D) P(=>+>>>

"es#onsibility Accounting $ Transfer !ricing

,asic Concepts2=) 3hat te% i#entifies an acco*ntin& s'ste% in which the opeations of the

#own into epota"le se&%ents an# the contol f*nctions of a foepeson+ s*peviso is e%phasi/e#4A) Responsi"ilit' acco*ntin& C) C ontol acco*ntin&,) Opeations! eseach acco*nt in& D) ,*#&eta' acco*nt in&

(>=)Contolla"le costs aeA) Costs that ae li0el' to espon# to the a%o*nt of attention #evote# t

%ana&e),) Costs that ae &ovene# %ainl' "' past #ecisions that esta"lishe# opeatin& an# o&ani/ational capacit' an# that onl' chan&e slowl' chan&es in capacit'

C) Costs that will "e *naffecte# "' c*ent %ana&eial #ecisions)D) Costs that fl*ct*ate in total in esponse to s%all chan&e in the

capacit')

(>?)The CEO of a api#l' &owin& hi&h!technolo&' fi% has e$ecise# centalicopoate f*nctions) ,eca*se the co%pan' now opeates in fo* &eo&locations+ the CEO is consi#ein& the a#visa"ilit' of #ecentali/in& oppo#*ction an# sales) 3hich of the followin& con#itions po"a"l' wo*l# vali# eason fo #ecentali/in&4A) Geate local contol ove co%pliance with &oven%ent e&*lations)

,) Moe efficient *se of hea#1*ates staff officials an# specialists)C) *ic0e an# "ette opeatin& #ecisions)D) Geate econo%ies in p*chasin&)

(>)The least co%ple$ se&%ent of aea of esponsi"ilit' fo which costs ate allA) pofit cente C) conti"*tion cente,) invest%ent cente D) cost cente

((>)3hich of the followin& #oes not appl' to the content of %ana&eial epotsA) Repotin& stan#a# is elevant to the #ecision to "e %a#e,) Ma' e$ten# "e'on# #o*"le!ent' acco*ntin& s'ste%C) Petains to s*"*nits of the entit' an# %a' "e ve' #etaile#D) Petains to the entit' as a whole an# is hi&hl' a&&e&ate#)

2) The "est %eas*e of %ana&eial efficienc' in the *se of invest%ents in asApil (>;



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A) ate of et*n on stoc0hol#es5 e1*it' C) inco%e fo% opeat ions,) invest%ent t*n ove D) invento' t*nove

Ret*n on Invest%ent((() If the invest%ent t*nove #ecease# "' (> pecent an# ROS #ecease# "' 7> pecent+ the

ROI wo*l#A) incease "' 7> C) #ecease "' 7=,) #ecease "' (> D) #ecease "' 77)7

((2)The followin& info%ation petains to Pl*to Co%pan'-s Satellite Division fo 2>>89Sales P7((+>>>Vaia"le cost) 2;>+>>>Tacea"le fi$e# costs ;>+>>>Avea&e investe# capital 8>+>>>I%p*te# inteest ate (>

Satellite-s et*n on invest%ent wasA) (>)>> C) 2=);>,) (7)77 D) 7>)>>

7>) The followin& #ata elate to the :app' Division of E*phoia Co%pan'9Sales P(>+>>>+>>>Vaia"le costs 7+>>>+>>>Diect fi$e# costs ;+>>>+>>>

Investe# capital ?+>>>+>>>Allocate# act*al inteest costs ?>>+>>>Capital cha&e (2

The #ivisional et*n on invest%ent is9A) (; pecent C) 2; pecent,) (7 pecent D) 2> pecent

7() Two #ivisions of :allowa' Co%pan' Divisions an# Y have the sa%e pofit %a&ins)Division -s invest%ent t*nove is la&e than that of Division Y ()2 to ()>) Inco%e fo%opeations fo Division is P;>+>>>+ an# inco%e fo% opeations fo Division Y is P7?+>>>)Division has a hi&he et*n on invest%ent than Division Y "'9 MA) *sin& inco%e fo% opeations as a pefo%ance %eas*e,) co%pain& inco%e fo% opeationsC) appl'in& a ne&otiate# pice %eas*e

D) *sin& its assets %oe efficientl' in &eneatin& sales

Resi#*al Inco%e72) Stevenson Copoation h

CPAR MAS Compilation

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