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Assessment 3 (Week 13) /
Assessment 3

Started on Thursday, 3 June 2021, 2:52 PM

State Finished
Completed on Thursday, 3 June 2021, 3:47 PM
Time taken 55 mins 30 secs
Marks 73.00/75.00
Grade 97.33 out of 100.00

Question 1
Rabee Manufacturing Company has two departments, A and B. Department A manufactures the Part A. Department B
Correct
processes the Part A into the final goods. No inventories exist in either department at the beginning or end of 2020.
Mark 3.00 out of During the year, Department A produced 80,000 kgs. of Part A at a cost of P800,000. All the Part A's were transferred to
3.00
Department B where additional operating costs of P5 per kg. were incurred. The finished goods was sold for P3,000,000.

Determine the gross profit for Department A  if the transfer price is P12 per kg.

Answer: 160,000 

The correct answer is: 160,000

Question 2
The Assembly Division of Bee Company sells all of its output to the Finishing Division of the company. The only product of
Correct
the Rabee Division is Part A that are used by the Finishing Division. The retail price of the Part A is P20 per unit. Each unit
Mark 3.00 out of
completed by the Finishing Division requires four Part A's. Production quantity and cost data for 2021 are as follows:
3.00
Part A units                                           30,000

Direct materials                                 P135,000

Direct labor                                        P90,000

Factory overhead (25% is variable)      P90,000

Operating expenses (20% is variable)P150,000

Compute for the transfer price for 1 unit of Part A using variable costs.

Answer: 9.25 

The correct answer is: 9.25

Question 3
Global Company has two departmentss that report on a decentralized basis. Their results for 2020 were as follows:
Correct
                                                                        Pencil             Calculator

Mark 2.00 out of

2.00 Sales                                                                P150,000       P300,000

Income                                                            P 15,000        P 45,000

Asset base                                                       P 75,000        P150,000

Weighted average cost of capital                        12%               12%

Compute for the Turnover of Pencil.

Answer: 2 

The correct answer is: 2

Question 4
Rabee Manufacturing Company has two departments, A and B. Department A manufactures the Part A. Department B
Correct
processes the Part A into the final goods. No inventories exist in either department at the beginning or end of 2020.
Mark 3.00 out of
During the year, Department A produced 80,000 kgs. of Part A at a cost of P800,000. All the Part A's were transferred to
3.00
Department B where additional operating costs of P5 per kg. were incurred. The finished goods was sold for P3,000,000.

Determine the gross profit for the company as a whole  if the transfer price is P12 per kg.

Answer: 1,800,000 

The correct answer is: 1,800,000

Question 5
Global Company has two departmentss that report on a decentralized basis. Their results for 2020 were as follows:
Correct
                                                                        Pencil             Calculator

Mark 2.00 out of

2.00 Sales                                                                P150,000       P300,000

Income                                                            P 15,000        P 45,000

Asset base                                                       P 75,000        P150,000

Weighted average cost of capital                        12%               12%

Compute for the Residual Income for Calculator if the desired rate of return is 20%.

Answer: 15,000 

The correct answer is: 15,000

Question 6
The Part B Division of Furbee Company has just revised its actual cost data for 2020. Part B Division transfers goods to the
Correct
Finishing Division. Finishing Division can buy the same parts in the open market for P122 each. Part B division's new cost
Mark 5.00 out of
data are as follows:
5.00
Direct materials                                           P40

Direct labor                                                   30

Variable overhead                                         10

Fixed overhead                                              16

Variable selling expenses                                 6

Fixed selling and administrative expenses     12

Total costs                                                     P114

Desired return                                                   20

Sales price                                                     P134

Current production is 200,000 units, and the Part B Division has a capacity of 300,000 units.

What is the highest price the Finishing Division should pay for the units?

Answer: 122 

The correct answer is: 122

Question 7 Global Company has two departmentss that report on a decentralized basis. Their results for 2020 were as follows:
Correct
                                                                        Pencil             Calculator

Mark 2.00 out of

Sales                                                                P150,000       P300,000

2.00
Income                                                            P 15,000        P 45,000

Asset base                                                       P 75,000        P150,000

Weighted average cost of capital                        12%               12%

Compute for the Return on Investment of Pencil.

Answer: 20% 

The correct answer is: 20%

Question 8
Global Company has two departmentss that report on a decentralized basis. Their results for 2020 were as follows:
Correct
                                                                        Pencil             Calculator

Mark 2.00 out of

2.00 Sales                                                                P150,000       P300,000

Income                                                            P 15,000        P 45,000

Asset base                                                       P 75,000        P150,000

Weighted average cost of capital                        12%               12%

Compute for the EVA of Calculator.

Answer: 27,000 

The correct answer is: 27,000

Question 9 Jerbee Incorporated sells a product for P400 per unit. The market share of the product is twenty two percent of the units
Correct sold. The marketing manager feels that the market share can be increased to 28 percent of the units sold with a reduction
Mark 3.00 out of in price to P340. The product is currently earning a profit of P64 per unit. The president of Jerbee Inc feels that his
3.00 company needs to maintain the same profit level per unit. The market share consists of P4,000,000 (10,000 units).

How many units does Jerbee Incorporated currently sell of the product?

Answer: 2,200 

The correct answer is: 2,200

Question 10 Rabee Manufacturing Company has two departments, A and B. Department A manufactures the Part A. Department B
Correct processes the Part A into the final goods. No inventories exist in either department at the beginning or end of 2020.
Mark 3.00 out of During the year, Department A produced 80,000 kgs. of Part A at a cost of P800,000. All the Part A's were transferred to
3.00 Department B where additional operating costs of P5 per kg. were incurred. The finished goods was sold for P3,000,000.

Determine the gross profit for Department A  if the transfer price is P8 per kg.

Answer: (160,000) 

The correct answer is: (160,000)

Question 11
The Assembly Division of Bee Company sells all of its output to the Finishing Division of the company. The only product of
Correct
the Rabee Division is Part A that are used by the Finishing Division. The retail price of the Part A is P20 per unit. Each unit
Mark 3.00 out of
completed by the Finishing Division requires four Part A's. Production quantity and cost data for 2021 are as follows:
3.00
Part A units                                           30,000

Direct materials                                 P135,000

Direct labor                                        P90,000

Factory overhead (25% is variable)      P90,000

Operating expenses (20% is variable)P150,000

Compute for the transfer price for 1 unit of Part A using full cost plus 10 percent markup.

Answer: 17.05 

The correct answer is: 17.05

Question 12 The Assembly Division of Bee Company sells all of its output to the Finishing Division of the company. The only product of
Correct the Rabee Division is Part A that are used by the Finishing Division. The retail price of the Part A is P20 per unit. Each unit
Mark 3.00 out of completed by the Finishing Division requires four Part A's. Production quantity and cost data for 2021 are as follows:
3.00
Part A units                                           30,000

Direct materials                                 P135,000

Direct labor                                        P90,000

Factory overhead (25% is variable)      P90,000

Operating expenses (20% is variable)P150,000

Compute for the transfer price for 1 unit of Part A using market price

Answer: 20 

The correct answer is: 20

Question 13
Rabee Manufacturing Company has two departments, A and B. Department A manufactures the Part A. Department B
Correct
processes the Part A into the final goods. No inventories exist in either department at the beginning or end of 2020.
Mark 3.00 out of
During the year, Department A produced 80,000 kgs. of Part A at a cost of P800,000. All the Part A's were transferred to
3.00
Department B where additional operating costs of P5 per kg. were incurred. The finished goods was sold for P3,000,000.

Determine the gross profit for the company as a whole  if the transfer price is P8 per kg.

Answer: 1,800,000 

The correct answer is: 1,800,000

Question 14
Global Company has two departmentss that report on a decentralized basis. Their results for 2020 were as follows:
Correct
                                                                        Pencil             Calculator

Mark 2.00 out of

2.00 Sales                                                                P150,000       P300,000

Income                                                            P 15,000        P 45,000

Asset base                                                       P 75,000        P150,000

Weighted average cost of capital                        12%               12%

Compute for the EVA of Pencil.

Answer: 6,000 

The correct answer is: 6,000

Question 15
Rabee Manufacturing Company has two departments, A and B. Department A manufactures the Part A. Department B
Correct
processes the Part A into the final goods. No inventories exist in either department at the beginning or end of 2020.
Mark 3.00 out of
During the year, Department A produced 80,000 kgs. of Part A at a cost of P800,000. All the Part A's were transferred to
3.00
Department B where additional operating costs of P5 per kg. were incurred. The finished goods was sold for P3,000,000.

Determine the gross profit for Department B  if the transfer price is P12 per kg.

Answer: 1,640,000 

The correct answer is: 1,640,000

Question 16
Global Company has two departmentss that report on a decentralized basis. Their results for 2020 were as follows:
Correct
                                                                        Pencil             Calculator

Mark 2.00 out of

2.00 Sales                                                                P150,000       P300,000

Income                                                            P 15,000        P 45,000

Asset base                                                       P 75,000        P150,000

Weighted average cost of capital                        12%               12%

Compute for the Residual Income for Pencil if the desired rate of return is 20%.

Answer: 0 

The correct answer is: 0

Question 17
The Assembly Division of Bee Company sells all of its output to the Finishing Division of the company. The only product of
Correct
the Rabee Division is Part A that are used by the Finishing Division. The retail price of the Part A is P20 per unit. Each unit
Mark 3.00 out of
completed by the Finishing Division requires four Part A's. Production quantity and cost data for 2021 are as follows:
3.00
Part A units                                           30,000

Direct materials                                 P135,000

Direct labor                                        P90,000

Factory overhead (25% is variable)      P90,000

Operating expenses (20% is variable)P150,000

Compute for the transfer price for 1 unit of Part A using variable product costs plus a fixed fee of 20 percent.

Answer: 9.90 

The correct answer is: 9.90

Question 18
Jerbee Incorporated sells a product for P400 per unit. The market share of the product is twenty two percent of the units
Correct
sold. The marketing manager feels that the market share can be increased to 28 percent of the units sold with a reduction
Mark 3.00 out of in price to P340. The product is currently earning a profit of P64 per unit. The president of Jerbee Inc feels that his
3.00
company needs to maintain the same profit level per unit. The market share consists of P4,000,000 (10,000 units).

What is the target cost per unit?

Answer: 276 

The correct answer is: 276

Question 19
Global Company has two departmentss that report on a decentralized basis. Their results for 2020 were as follows:
Incorrect
                                                                        Pencil             Calculator

Mark 0.00 out of

2.00 Sales                                                                P150,000       P300,000

Income                                                            P 15,000        P 45,000

Asset base                                                       P 75,000        P150,000

Weighted average cost of capital                        12%               12%

Compute for the EVA of Calculator.

Answer: 27,000 

The correct answer is: 2

Question 20
The Assembly Division of Bee Company sells all of its output to the Finishing Division of the company. The only product of
Correct
the Rabee Division is Part A that are used by the Finishing Division. The retail price of the Part A is P20 per unit. Each unit
Mark 3.00 out of
completed by the Finishing Division requires four Part A's. Production quantity and cost data for 2021 are as follows:
3.00
Part A units                                           30,000

Direct materials                                 P135,000

Direct labor                                        P90,000

Factory overhead (25% is variable)      P90,000

Operating expenses (20% is variable)P150,000

Compute for the transfer price for 1 unit of Part A using full cost plus 20 percent markup.

Answer: 12.60 

The correct answer is: 12.60

Question 21
Global Company has two departmentss that report on a decentralized basis. Their results for 2020 were as follows:
Correct
                                                                        Pencil             Calculator

Mark 2.00 out of

2.00 Sales                                                                P150,000       P300,000

Income                                                            P 15,000        P 45,000

Asset base                                                       P 75,000        P150,000

Weighted average cost of capital                        12%               12%

Compute for the Return on Investment of Calculator.

Answer: 30% 

The correct answer is: 30%

Question 22
Global Company has two departmentss that report on a decentralized basis. Their results for 2020 were as follows:
Correct
                                                                        Pencil             Calculator

Mark 2.00 out of

2.00 Sales                                                                P150,000       P300,000

Income                                                            P 15,000        P 45,000

Asset base                                                       P 75,000        P150,000

Weighted average cost of capital                        12%               12%

Compute for the margin of Pencil Division.

Answer: 10% 

The correct answer is: 10%

Question 23 The Part B Division of Furbee Company has just revised its actual cost data for 2020. Part B Division transfers goods to the
Correct Finishing Division. Finishing Division can buy the same parts in the open market for P122 each. Part B division's new cost
Mark 5.00 out of data are as follows:
5.00
Direct materials                                           P40

Direct labor                                                   30

Variable overhead                                         10

Fixed overhead                                              16

Variable selling expenses                                 6

Fixed selling and administrative expenses     12

Total costs                                                     P114

Desired return                                                   20

Sales price                                                     P134

Current production is 200,000 units, and the Part B Division has a capacity of 300,000 units.

What is the lowest price the Part B Division should charge for the internal transfers of its goods?

Answer: 86 

The correct answer is: 86

Question 24
Jerbee Incorporated sells a product for P400 per unit. The market share of the product is twenty two percent of the units
Correct
sold. The marketing manager feels that the market share can be increased to 28 percent of the units sold with a reduction
Mark 3.00 out of
in price to P340. The product is currently earning a profit of P64 per unit. The president of Jerbee Inc feels that his
3.00
company needs to maintain the same profit level per unit. The market share consists of P4,000,000 (10,000 units).

What is the original cost per unit?

Answer: 336 

The correct answer is: 336

Question 25
Jerbee Incorporated sells a product for P400 per unit. The market share of the product is twenty two percent of the units
Correct
sold. The marketing manager feels that the market share can be increased to 28 percent of the units sold with a reduction
Mark 3.00 out of
in price to P340. The product is currently earning a profit of P64 per unit. The president of Jerbee Inc feels that his
3.00
company needs to maintain the same profit level per unit. The market share consists of P4,000,000 (10,000 units).

What is the target price per unit?

Answer: 340 

The correct answer is: 340

Question 26
Global Company has two departmentss that report on a decentralized basis. Their results for 2020 were as follows:
Correct
                                                                        Pencil             Calculator

Mark 2.00 out of

2.00 Sales                                                                P150,000       P300,000

Income                                                            P 15,000        P 45,000

Asset base                                                       P 75,000        P150,000

Weighted average cost of capital                        12%               12%

Compute for the margin of Calculator Division.

Answer: 15% 

The correct answer is: 15%

Question 27
Rabee Manufacturing Company has two departments, A and B. Department A manufactures the Part A. Department B
Correct
processes the Part A into the final goods. No inventories exist in either department at the beginning or end of 2020.
Mark 3.00 out of During the year, Department A produced 80,000 kgs. of Part A at a cost of P800,000. All the Part A's were transferred to
3.00
Department B where additional operating costs of P5 per kg. were incurred. The finished goods was sold for P3,000,000.

Determine the gross profit for Department B  if the transfer price is P8 per kg.

Answer: 1,960,000 

The correct answer is: 1,960,000

◄ Answers to Strategic Cost Management Assignment

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