ABC Corp. is producing bicycles.

Its expenses are as follows:

variable manufacturing - 2,000
fixed manufacturing - 3,000
variable selling & admin expenses - 4,000
fixed selling & admin expenses - 5,000
By the end of its first month of operation, the Company was able to sell all of its
inventory. Given the information, its cost is lower by 4,000 under period costing.

True

False

Given that a company's production is greater than sales, its inventory would

None in the choices

Increase

Decrease

Remain the same

If production is less than sales, then inventory increases, and absorption costing is less
than variable costing

True

Fals
ABC Corp. is producing bicycles. Its expenses are as follows:
variable manufacturing - 2,000
fixed manufacturing - 3,000
variable selling & admin expenses - 4,000
fixed selling & admin expenses - 5,000
By the end of its first month of operation, the Company was able to sell all of its
inventory. Given the information, its cost is higher by 4,000 under period costing.
Incorrect

True

False

If there is no beginning inventory and sales volume is less than production volume,
then expenses under period costing is higher

True

False

If there is beginning inventory and fixed manufacturing overhead in ending inventory is

greater, then profit under absorption costing is lower Incorrect

True

False

ABC Corp had a sales revenue of 1,000,0000. Its variable and fixed manufacturing
expenses are 123,000 and 435,000 respectively. Its variable, and fixed selling and
administrative expenses are 18,000 and 15,000 respectively. At the end of the month,
the company's ending inventory is 12,000. How much is its net income under variable
costing?
499,000.00

None in the choices

501,000.00

409,000.0

ABC Corp had a sales revenue of 1,000,0000. Its fixed and variable manufacturing
expenses are 123,000 and 345,000 respectively. Its variable, and fixed selling and
administrative expenses are 18,000 and 15,000 respectively. At the end of the month,
the company's ending inventory is 12,000. How much is its contribution margin under
variable costing?

None in the choices

637,000.00

859,000.00

862,000.00

ABC Corp had a sales revenue of 1,000,0000. Its variable and fixed manufacturing
expenses are 132,000 and 345,000 respectively. Its variable, and fixed selling and
administrative expenses are 15,000 and 18,000 respectively. At the end of the month,
the company's ending inventory is 12,000. How much is the net difference between
variable and absorption costing Incorrect

None in the choices

15,000.00

18,000.00

12,000.00

Committed cost is an example of irrelevant cost Incorrect

True

Fals

ABC Corp. manufactures keyboards used in its production cycle at a cost of Php 1,300
per unit which includes Php 500 FOH. ABC Corp needs 30,000 units of keyboards
annually and Typist Company has offered to sell these keyboards at Php 1,000 per unit.
If ABC purchases the keyboards, Php 600,000 of its annual fixed cost applied will be
eliminated, and the company may be able to rent the facility previously used for
manufacturing keyboards. Should the company purchase the keyboard? Why? Incorrect

ABC should buy the product with savings of 6,600,000

ABC should make the product with savings of 5,400,000

None in the choices

ABC should make the product with savings of 8,400,000

ABC Corp manufactures Coin purses. The projected income statement for the year
before the special order is as follows:
Amount Per Unit
Sales Php 880,000 Php 20
Cost of goods sold Php 210,000 Php 16
Selling Expense Php 23,000 Php 3
Fixed costs included in the above-projected income statement are Php 80,000 in the
cost of goods sold and Php 9,000 in admin expenses.
A special order offering to buy 2,000 caps for Php 12 each was made to ABC. No
additional selling expenses will be incurred if the special order is accepted. ABC has the
capacity to manufacture 2,000 caps more. As a result of the special order, how much
would the operating income increase? Incorrect

27,734.94

None in the choices

18,090.91

17,734.94

ABC Corp had a sales revenue of 1,000,0000. Its variable and fixed manufacturing
expenses are 123,000 and 435,000 respectively. Its variable, and fixed selling and
administrative expenses are 18,000 and 15,000 respectively. At the end of the month,
the company's ending inventory is 21,000. How much is its net income under full
absorption costing costing?

521,000.00

511,000.00

None in the choices

430,000.00

ABC Corp had a sales revenue of 1,000,0000. Its variable and fixed manufacturing
expenses are 123,000 and 435,000 respectively. Its variable, and fixed selling and
administrative expenses are 15,000 and 18,000 respectively. The company's ending
inventory is 12,000. How much is its cost of goods sold under full absorption costing?

None in the choices

654,000.00

546,000.00

456,000.00

Sunk cost is irrelevant because it changes when you choose a different alternative

True

False

Differential approach is better because ALL information will be given all the time

True
False

Pochita is considering which is the best way for him to go to school. He usually takes a
tricycle going to the terminal for 30 pesos. From there, he can either take a jeep or ride
a train. If he will take a jeep, he needs to ride Quiapo jeepney which will cost him 20
pesos. Then, he will ride the Divisoria jeepney and alight to Morayta. It will cost him 12
pesos to ride the Divisoria jeep. If he rides a train, he will alight in Cubao, costing him 16
pesos. Then, he will ride LRT 2 going to Legarda, costing him 16 pesos. From there, he
will ride the Divisoria jeepney and alight to Morayta which will cost him 12 pesos. He
purchased a beep card worth 100 pesos early this month just in case he needs to ride a
train going to school. Pochita's relevant cost in riding a jeep is 32 pesos Incorrect

True

False

Pochita is considering which is the best way for him to go to school. He usually takes a
tricycle going to the terminal for 30 pesos. From there, he can either take a jeep or ride
a train. If he will take a jeep, he needs to ride Quiapo jeepney which will cost him 18
pesos. Then, he will ride the Divisoria jeepney and alight to Morayta. It will cost him 12
pesos to ride the Divisoria jeep. If he rides a train, he will alight in Cubao, costing him 16
pesos. Then, he will ride LRT 2 going to Legarda, costing him 16 pesos. From there, he
will ride the Divisoria jeepney and alight to Morayta which will cost him 12 pesos. He
purchased a beep card worth 100 pesos early this month just in case he needs to ride a
train going to school. Pochita's relevant cost in riding a train is 62 pesos

True

False
ABC Inc. manages five products in the market. Shown below are the summary income
statements of each product (in million):
One Two Three Four Five
Sales Revenue 120 230 430 430 560
Expenses 120 200 480 480 580

Included in the expenses is Php 120,000,000 of corporate overhead allocated to the

products based on sales revenue. The product(s) that ABC should consider dropping is
(are)?

Products One, Two, and Five

Products Three and Four

Products Two, Four, and Five

None in the choices

ABC Corporation has the following annual costs for its food business for its one branch:
Food Php 200,000.00
Labor Php 80,000.00
Overhead Php 300,000.00
20% of the overhead is fixed. Of the total fixed overhead, Php 25,000 is the salary for
the cafeteria supervisor. The remainder of the fixed overhead has been allocated from
the total company overhead. Identify the relevant cost assuming the cafeteria supervisor
will remain, and that ABC will continue to pay her salary. Incorrect

480,000.00

None in the choices

490,000.00

530,000.00