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Mas Module 01 PDF Free
Mas Module 01 PDF Free
‘2. 10,700 units 20000 unts BL 12,100 units 28,300 units 23. A company has just completed the production of ts only product. The product has taken 3 years and P 6,000,000 ‘to develop. The following costs are expected to be incurred on a monthly basis forthe normal production level of 1,000,000 pounds of the new product: 1,000,000 Ibs, Direct materials 300,000 Direct labor 1,250,000 Variable factory overhead "450,000 Fixed factory overhead 2,000,000 Variable seling, general and administrative exper ‘900,000 Freed seling, general and administrative expenses 1,500,000 Total p 1f sales price per pound isP 5.90, the sales needed to ear P 3,000,000 profit inthe frst year would be c ’2. 13,017,000 pounds ‘© 15,000,000 pounds ._ 14,000,000 pounds {25,600,000 pounds 124. Mare Company, which i subject to 40% tax, had the folowing operating data forthe perio just ended: Selig price per unit P60 Variable cost pos unt P22 Fed costs 304,000 Management plans to improve the quality of ts only procuct by way of implementing the folowing: (1) Replacing @ component that costs P 3.50 wth a higher-orade unit that costs P 5.50, and (2) Acquring 2 P 180,000 packaging machine. Marz will depreciate the machine over a 10-year period with no ‘estimated salvage value by the straight-line methed of depreciation, Ifthe company wants to earn after-tax of P 172,800 inthe coming year, how many units must be sold? c ‘a, 10,300 unts 22,500 units b. 21,316 unts 27,000 units 2, Cost-volume-profit relationships that are curvilinear may be analyzed linearly by considering only . '2. xed and semivariabe costs Relevant vanable costs 1. Relevant fied costs Relevant range of volume bogeys &RSA. The Review School of Uccorntarey MAS Module 1 MCQs: MAS - 01, 02, 03 26, Delphi Company has developed a new project that wall be marketed for the fist time during the next Fiscal year. [though the Marketing Department estimates that 35,000 unts could be sodd at P36 per unt, Delphi's ‘management has allocated only enough manufacturing capacty to produce a maximum of 25,000 units of the new Broduct annually. The fixed costs associated withthe new provtuct are budgeted at P 450,000 for the year, wich includes P 60,000 for depreciation on new manufacturing equipment. Delphi is subject to a 40% Income tx rate Data assocated with each unit of product are precentad on the next page: ‘enable Costs Direct mater 7.00 Direct labor 350 Manufacturing overhead 4.00 Total vanable manufacturing cost 1450 Seling expenses i Total vanable cost Pi6.00 Delphi Company's management has stipulated that wi act appreve the continued manufacture of the new Droduct after the next fiscal year unless the after tax prfit isa least P 75,000 the first year. The unt sling price to achieve this target profit must be at least . a. P3460 P3700 b. P3560 4 P3900 22. Dan, Inc. is planning to produce two products, A and 8. Dan is planning to sell 100,000 units of A at P 4a unit and 200,000 unts of B at P 3 a unit. Vanabe cost 1s 70% of sales for A and 80% of sales for B. In order to realize a ‘otal profit of P 160,000, what must the total fixed cost be? A ‘2. P'80,000 © 240,000, b._P90,000, é. 600,000 28. The following data pertain to te two products manufactured by Beng, Inc= ‘Selina Brice — Vanabie Cost A 240, Piso 8 P 1,060 P aoe Fixed cost totals P 600,000 annually. The experted soles mx i units is 608% for Product A and 40% for Product 8. How many units ofthe two products together must Beng sel ta break-even? c a. 857 7,000 bo 1a a 2459 29. A company sels two products, X and Y. The sales mix consists of a composite unt of two units of K for every five Lunt of ¥ (2:5). Fixed costs are P 49,500. The unit contribution margins for X and ¥ are, respectively, P 2.50 and 1.20. Considering the company as a whole, whats the number of campasite unto break even?” A 2. 4,500 9,500 b. 8250 631,506 [NOTE: Usual mistake is letter D. The requirement is to compute "the number of compaste units to break-even” $0 31,500 units should be divided by 7 unts since “a composte unt 1s composed of two unts of X for every five units of ¥ (2:5).” Consider the following 1» The number of compose untsto break-even: 4,500 unts 1» The number of uns to break-even: 31,500 units 30. Assuming same data in No. 2, f the company had a proft of P 22,000, the unit sales must have been 8 ‘2. Product X: 5,000; Product ¥: 12,500 © Product X: 23,800; Product ¥: $9,500 Product X: 13,000; Procuct ¥: 32,500 4. _Prociuc x: 28,600; Product ¥: 71/500 51. Kris Company seis Products M, T and V. Kris seis three units of M for each Unit of V and tho unds of T for each Luni of M.. The contribution margins are P 1 per unit of M, P .S0 per unt of T, and P 3 per unt of V. Fixed costs ‘are P 600,000. How many units of V would Kris sel atthe break-even pont? a. 40,000 units 240,000 units 120,000 units 4 400,000 units 132. There are so many assumptions inherent in CVP analysis. Which of the folowing is not one of these assumptions? ° ‘2. Cost and revenues are predictable and are near over the relevant range b._ Variable costs fluctuate proportionately th vokume ‘Changes inthe beginning and anding inventory ae insignificant in amount {. Sales mix wil change as fixed costs increase beyond the relevant range 33, Ifthe sales mix shits toware higher contrbuton margin products, te break-even point A 2. Decreases Remains constent b._ Increases 4. tsze0 34. Employee, Inc. had the folowing sales resus for 2018. vss olayer Radios Peso sales component ratio 030 0300.40 Contribution margin ratio nao 040 060 Employee, Inc. had Fixed costs of P 2,400,000. The treak-rver sales in pesos for Employee, Inc. are: Tusets —Dolaver Radios ses CDolaver "Radios c a PL8M «= PISM «© P36M PIS PLS Pom bo P1sM 18M PLeM 4. P4,531,915 P1,531,915 72,042,553 35. Fora proftable company, the amount by which sales can dacine before losses occur is known as the ° 2. Soles volume verance cVanable sales ratio b. Hurdle rate 4. Marin of safety Page 7 of 18 pages &KeSQ. The Rewiew School of ecoreanrig MAS Module 1 MCQs: MAS ~ 01, 02, 03 36, ® a 38, 40. at 2 43. 45, 46. 4”. 48. . The margin of safety is a key concept of CVP analysis. The margin of safety is ‘2. The contribution margin rate 'b. The difference between budgeted sales and breakeven sales The difference between the breakeven point in sales and cash flow breakeven &._ The difference between budgeted contributio! margin and breakeven contnbution margin {nish Company has sales of P 100,000, fixed costs of P 50,000, and a profit of P 10,000. What is Irish Company's margin of safety? a, 10,000 P3333 b. P 16,667 dP 83333 Operating leverage s greatest in companies that have 2. Low fxad cost, low unit vanable cost Low fixed cost high unt variable cost . High fixed cost, low unt variable cost 1. High fxed cost, high unt variable cost \vian Corporation sells sets of encyclopedias, Vivian sold 4,000 sets last year at P 250 a set. Ifthe vanable cost Brant P17, hid enV ere P 100,000, what isthe Vivian's degree of operating leverage (001)? a 067 ce 1s b. 075 a 30 ‘Ube Company's variable costs are 75% of sales. At a sales level of P 400,000, the company’s degree of operating leverage Is 8. At this level, fixed costs equal 2. 87,500 P-$0,000 b. 100,000 J.P 75,000 ‘Ahigher degree of operating leverage compared with industry average implies that the firm ‘2, Has higher variable costs Bb. Has profits that are more sensitve to changes in sles volume c_Is more profitable d._ Isles nsky “Terry Company/s variable costs are 70% of sales. At 2 P 303,000 sales level, the degree of operating leverage is 10. If sales increase by P 60,000, what wil be the degree of operating leverage? a 2 © 6 b. 10 a4 1 used in cost-volume-profit analysis, senstivty analysis ', Determines the most proftable mix of products to be sold . Allows the decision maker to use probabilities in the evaluation of decision alternatives ‘c. _Ts-done through vanous possible scenarios and computes the impact on profit of various predictions of future events 1d. Is limited because in cost-volume-proft analysis, costs are not separated into fixed and variable ‘components |. The indifference point is the level of volume at which @ company 2. Eams.no prof Fam large amount of profit Ears ts target profit __Ezmms the same proft under different schemes ‘Machine XX hes fixed costs of P 225,000 and a variable cost of P 20. Machine YY has fixed costs of P 300,000 and ‘a variable cost of P14. What isthe inference point n units? 2. 11,250 21429 b. 12,500 1d. Cannot be determined from given information Bona Motors employs 40 sales personnel to market Its hne of automobiles. The average car sell for P 1,200,000 ‘and a 6% commission is paid to the salesperson. Bona Motors is considering a change to a scheme that would pay ‘ach salesperson a salary of P 24,000 per month plus a 2% commission of the sales made by that salesperson, Whats the amount of total carsales at which Bong Motors would be iniflerent as to which plan to select? '2. 30,000,000 P22,500,000, 'b._ P 24,000,000 é.P 12,000,000 ‘SOLUTION “656 commission: 1.2M (6%) = 72,000 vs. 2% convmission: 1.2M (29%) = 24,000 72,000 X = 24,000 X + 24,000 (40) X » 960,000 + 48,000 = 20 units Indifference Point: 20 units x P 1,200,000 per unit John Corporation submitted to you the folowing condensea income statement: Sales (80% capacty) 300,000 Vanable costs » 180,000 Foeed costs 82500 __262,500 ‘Net income 232,500 ‘What is the break-even point 3s a percentage of capacity? 2. 45% © 67.85% b._ 55% 6. 58.75% “100% capacty: 300,000 +80% = P 375,000 VCR: 180,000 = 300,000 = 60% (CMR = 4056) Breakeven sales: 82,500 + 40% = P 206,250 -1 based on 100% capacty: 206,250 + 375,000 Contribution margin ratio multiplied by the margin of safety ratio equals '2. Variable cost rato ‘c Break even sales ratio b. Fixed cost ratio 1d. Net profit rato Page 8 of 16 pagesReSlh. The Rerew School of Uaconmtoncy MAS Module 1 MCOs: MAS - 01, 02, 03 49. The following ts Cello Company/s cost behavior S.000 units oriess More than 5,000 units Foret costs 35,000 45,000 Contribution margin ratio 20% 12.5% If selling pice is set at P40, then how many unis must be sold to earn a proft of P 25,0007 2. 7,500 © 12,500 11,000 4 14,000 50, The management of Rhea Company performed cost shies and projected the following annual costs based on 40,000 units of productions and sales: Totalcosts of variabie costs to total costs Dect materials 400,000, 10% wee lavor 360,000 75% Factory overeat 300,000 40% Seling and aorinsratwe expense 200,000 5% wat unt-seing pace wil yd 3 10% prof rom sales of 40,000 uns? 3. P3350 © P4000 b._P35.00 4. 50.00 ‘SOLUTION GUIDE ‘Total Costs: Variable Costs Fixed Costs Direct materials ? 400,000 Direct labor 360,000 Factory overhead 300,000 S& A expense 200,000 _ Total 1,260,000 MAS 03: VARIABLE & ABSORPTION COSTING (35 MCQs) 1. Which method of inventory costng teats direct manufacturing costs and manufacturing overhead costs, both variable and feed, a5 inventoriable costs? ‘@. Direct costing Absorption costing b._ Variable costing 4. Conversion costing 2. What isthe costing methd that treats all fed costs as period costs? '2. Absorption costing Vanable costing b._Job-order costing 1d. Process costing 3. Black Co's 2018 fered manufacturing overhead costs totaled P 100,000 and variable selling costs totaled P 80,000. Under direct (variable) cosing, how should these costs be classified? Product Costs 180,000 P 100,000 P 80,000 Po are based on the folowing information ‘Amanufacturer at the end ofits fiscal year recorded the data below: Prime cost 800,000 \Vanable manufacturing overhead 100,000 Fixed manufacturing overhead 160,000 arable sling and other expenses 80,000 Fixed seling and other expenses 40,000 If the manufacturer uses variable costing, the inventoriable costs fr the fiscal year are ‘2. P-800,000, ‘< P-980,000 '.P-900,000 dP 1,060,000 5. Using absorption (ful) costing, inventorable costs are ‘a. P 800,000
. 45,000 a $7647 it Company has fixed costs of P 300,000. It produces two products, X and Y. Product X has a variable cost percentage equal to 60% of #s P 10 per unt sling pice. Product Y has a variable cost percentage equal to 70% OF ts P 30 selling price. For the past several years, sales of product X have averaged 66.67% of the sales of Product Y. That rato isnot expected to change, What i i's breakeven point in pesos? ‘2. 300,000 © Pes7.ta2 b._°750,000 a p942.857 When sales level reaches P 100,000, return on sales is 109. How much the margin of safety the operating leverage at this sles level is 4 umes? a. P2500 25% of sakes 25,000 unts . Cannot be determined from the gwven information Jack Company sels $0,000 units of a gadget. These were taken fram the company’s records! ‘Accounts recenvable: P 123,000 Days sales outstanding: 15 days ‘Contribution margin ratio: 489% Profit forthe period: P 485,040, “The ending receivables balance the average balance during the year. Using @ 360-day year and assuming thet al sales are made on credit, what isthe company’s breakeven point? 3. P 1,032,000 P.2,061,122 b P1,320,000 dP 2,106,122 Julie Company, which 1s subject to 40% income tax rate, had the following operating data for the penod just ended Seling price per writ P60 arable cost per unt p22 Faced cons 504,000 Management plans ta improve the qualty of sole product by way of implementing the following changes: (1) Replaang 2 component that costs P 3.50 witha higher-grade unt that costs P 5.50, and (2) Acquinng 2 P 180,000 packaging mactine. Jue wil deprecate the machine over 3 10-year period with no ‘estimated salage value by the straght-ine method of deprecation. pooe 3 1 poses ®RSQ. lhe Review School of Uecortancy, MAS Module 1 MCas: 18, 19. 20 a. 2, 2, 2s. MAS — 01, 02, 03 Ifthe company wants to eam after-tax of P 172,800 inthe coming yea, then how many units must sot? 10,300 units © 22,500 unts b. 21,316 units 4. 27,000 units are based on the following information Ginger Co. is involved in selling an exclusive toy in the marke. It sold 1,800 units of toys during the current year. The manufacturing capacty of Gingers facies is 3,000 units of toys.’ The operating results of Ginger Co. Gurng the current year show the following, sales 900,00 Varabe costs Monufactusng P3150 Seteg "1,00. _a95o00 Contribution margin 405,000 Fixed coats: Menufoctuing 90,000 Seling 1125500 Adminstration __ 45000. _ 247,500 Net income before tases P1s7,500 Income tax (40%) {63,000 Net income ater taxes 94,500 Wat is the break-even volume i uns of toys forthe year? 2420 pe b 495 @ 1.100 If the sales volume is estimated to be 2,100 units in the next year, and i the prices and costs stay atthe same levels and amounts next year, the after-tax income that Ginger can expect for next year is a P 110,250 =P 184,500 b. 135,000 783,500 Ginger has a potential foreign customer that has offered to buy 1,500 units at P 450 per unt. Assume that all of Gingers costs would be at the same levels and rates as last year. What net income after taxes would Ginger ‘expect if took this order and rejected some business from regular customers 50 as not to exceed capacity? @ P211,500,
. P54,000 . 2,000 30. The following data are avaiable for Monte Carlo Corporation: Direct materials used 22,500 Payrot 30,000, ‘Variable overheas (budgeted and actual) 2 per unit Fixed overhead (budgeted and actual) 40,000, Units produced 7,500 nts Units sold 7,000 units Beginning inventory None ‘Normal capacity 8,000 units ‘Any capacity variance is dosed to cost of sales, How much isthe cost of sles under (1) ful costing and (2) direct costing? ’2. (1) 98,000 (2) 63,000 (1) 103,333 (2) 65,500 b. (1) 100,310 (2) 65,500 4. (4) 100,500 (2) 63,000 31, The folowing information pertains to Italy Company/s Product A-B10: ‘Standard costs: ‘Variable manufacturing P12 per unt Fixed manufacturing (based on normal production of 20,000 unts) _P4 per unit Variances: Variable manufacturing ~ unfavorable 12,000 Capacity 8,000 (Other data: Production 22,000 units Sales (P 25/unit) 16,000 units Operating costs 64,000 ‘All variances are dosed to cost of goods sold. What isthe company’s profit under GAAP costing? a. 76,000 < P44,000 b.P-52,000 6. 42,000 32. Universal, Inc. began operations on January 1. Standard costs were established in early January assuming a normal production volume of 160,000 units. lH::never, Unive'sal, Inc. produced only 140,000 units of product 3nd ‘01d 100,000 units at a seling price of P 180 per unit dunng the year. Vanable costs amounted to 7,000,000, of which 60% were manufacturing and 40% were saling. Fixed costs totaled P 11,200,000, of which 50% were manufacturing and 50% were-seling. Unwversal, Inc. had no raw materials or workein-process inventories at December 31. Actual input prices and quantities per unit of product were equa to standard Using absorption casting, what wil be the (1) standard cost of goods sold and (2) overhead volume variance? (1) P 8,200,000 (2) P 800,000 U (1) P6,500,000 (2) P 700,000 U . (1) P 7,200,000 (2) P 800,000 F 4. (2) P 7,000,000 (2) P 700,000 F page 1816 aps ©REO The Review Schocl of Ueconetnrreg MAS Module 1 MCQs: MAS - 01, 02, 03 P18 per une P32 per unt PS per unt 2 per unt 40,000 {35 Bereo, 13,000 unts were produced.” In the cument penod, 15,000 unts were produced. In each pened, 72.200 wes were sid, Wat te otference in reported come Under BDxOION Cosng and vara Cost fox the coven perce? ‘The vanate cosing income e-eeded absorption cong come 3yP 4,000 ‘The vanable cosang come exceeded abserpban cing come BY P 6000 ‘The absorpeen costing income exceedad varaise cosing income By 800 [The absorpoen costing income exceeded variable costing income Dy P 10,000 ems 4 to 40 etormaton Sosa Corporaton enpioys an absorption costing system for internal reporting purposes; however, the SSmRRNY 's considering using vanable coming. Dats regarang Fuchsa's planned and aco! operaoans Yor Oe ‘lena year are presented below: Planned Aciwty Actual Actnty Beginning finshed goods inventory in unts 35,000 ‘Sees in unas | t 125,000 Producton in uns 10,300 330,000 [The folowng planned per unt cost figures were based on the estmated production and sale of 140,000 unts ‘fo De year. Fuchsa uses a predetermined manufacturing overhead rae for applying manufacturing overhead 1 IS Product; thus, @ combined manufacturing overhead rate of P 9.90 per unt was employed for absorgbon costng Burpeses. Any over. or under apples marvfartunng overnead & Cima to the cost Of goods sold account at the er Of the reportng year eect materiais Direct laser Vanable manufactunng overhead Fored manufacturing overhead 70.00 per une. 34. The value of Fuchsia Corporation's actual ending fnished goods inventory on the absorption costing basis was ‘2. 900,000