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**CPA REVIEW 2013-14
**

MANAGEMENT ADVISORY MANAGEMENT – FIRST PRE-BOARD

JACF

EXAM

__________________________________________________________________________________________________

1.

Answer: C

Oct.

Nov.

Dec.

Sales

200,000

210,000

220,500

Beginning inventory

(150,000)

(168,000)

(176,400)

Ending inventory: (210,000 x 80%)

168,000

(220,500 x 80%)

176,400

(220,500 x 1.05 x 80%)

______

______

185,220

Required production

218,000

218,400

229,320 =

665,700

2.

Amswer: C Nyclyn: 24 / 0.80 x 15

=

450

Salex: 19.2 / 0.80 x 21 =

504

Protet: 10 x 28

=

280

1,234

3.

Answer: D Spending: (AT x AVR) – (AT x SVR)

[53,500 x (P315,000 / 53,500)] – [(53,500 x (P3,600,000 / 600,000)]

P315,000 – P321,000 = 6,000 F

Efficiency: (AT x SVR) – (ST x SVR)

P321,000 – [(26,000 units x 2 DLH) x P6] = 9,000 U

4.

Answer: C

Fixed Spending: (AFxOH – BFxOH)

P260,000 – (P3,000,000 / 12) = 10,000 U

Fixed Volume: [BFxOH – (ST x SFxOH)]

P250,000 – (26,000 x 2 x P5) = 10,000 F

5.

Answer: B

Budgeted Fixed Overhead

=

P108,000

Less: Std. Time x Std. Fixed Overhead: [24,000 x (108,000 / 27,000)

=

96,000

Unfavorable volume variance

P

12,000

6.

Answer: D

Variable production cost: Total variable cost – variable selling expense

(50,000 – 30,000) = 20,000

Unit VC: (20,000 / 20,000) + (30,000 / 12,000) = 3.5

Variable income = 12,000 (12 -3.5) – 100,000 = 2,000

7.

Answer: D

**Variable costing: 7,000 [(22,500 / 7,500) + (30,000 / 7,500) + 2] = P63,000
**

Absorption costing: 7,000 [(22,500 / 7,500) + (30,000 / 7,500) + 2 + (40,000 /

8,000)] + 2,500* = P100,500

*Capacity (volume) variance: (NP – AP) FFOH / u = (8,000 – 7,500) 5 = 2,500 U

8.

Answer: A

Absorption Costing: (25 – 16) 16,000 – 64,000 = 80,000 + 8,000 F** - 12,000 UF

= P76,000

** Favorable: Actual production > Normal Production

9.

000 / P2.140.000.000 Net income P 650.000 Less: Loan payable 520. Answer: Sales (P4.200.000) + .080.5%) P6.500.000) – 21.000 / P2.000 20. of units 20.500.000] / (50.000 P650. 3 2 CM/hr. Answer: Rate of return on average total assets is net income divided by average total assets P650.25% 16.000.000 P650.000 Less: Income tax – 35% 350. Answer: D 17.500.000 x 162.000 Relevant cost that would be saved 85.000 = (18 – 8) X x = 3.5 times 15. [(34.000 / P2.000 Operating costs 1. Answer: P6.000 – 4.000 1.30(30.BALIUAG UNIVERSITY CPA REVIEW 2013-14 MANAGEMENT ADVISORY MANAGEMENT – FIRST PRE-BOARD JACF EXAM __________________________________________________________________________________________________ Answer: B Relevant Cost to Make Relevant Cost to Buy Purchase price P60 DM P 6 DL 30 VOH 12 Relevant FOH 9 P57 P60 X no.600.8) 4.080.000 1. Answer: Average total assets P2. P18 P16 Multiply by no.000 11. available 2.000 Net income before tax P1.000 = 25% 14.000 10.000) .500.500.000 – 20.30 Chk: Y = (15.000 = 60.600. Answer: C (16 .000.000 5. CM 36.000 = 10% 13.000) = .000 Less: Costs and Expenses: Materials and labor P4. of hrs.000 Max. Answer: A PM PR SP/u P50 P75 VC/u: DM 26 38 DL 10 18 FOH 8 11 CM/u P 6 P 8 Multiply by units produced / hr.000 / P6.000 +4.000 = 31.000 = 2.600.000 Stockholders’ equity P2.000 + Savings 25.200 units 12.

the unit cost of ending inventory is P25 (P12 direct materials + P9 direct labor + P4 variable overhead). a 21.000 – 750.000 – 60. b 22.000 units (35.000 + 2. These cost are expensed during the period incurred under variable costing.000 CM = 15.67% = 75.000.775) = 16. ending inventory was P1.000 (1-0.000b = b=3 18. Thus. 000 (P25x 40.300 27. Hence.000 ÷ 6. Answer: D (4.000b 287.000 – 11. C 24. 000) 32.525 – 75) / (625 + 1.700) P38.25 = 280.000 (35%) = 341. 31. Given beginning inventory of 35.000 20. Answer: B CMR x MSR = NPR 20% x 33. 000 units.000b) 1. Answer: B Costs (cash outflows): 50. 000 units. Discussion: Absorption costing results in a higher income figure than variable costing capitalizes some fixed factory overhead as part of inventory.000 Savings (cash inflows): 11. Answer: C 28. Answer : C Required: The actual finished goods ending investment using variable costing.000 = P52. ending inventory was P1. 000 units (35. Discussion : Using variable costing. B 29.000) + 2. Answer: A CMR = FxC / BES CMR = ∆FxC ÷ ∆BES = 78. Answer: B Required : The actual finished goods ending inventory using absorption costing. the ending inventory equals 40. A 26. Answer: C 2. the ending inventory equals 40.67% S= 5.000 + 0. 000 PI + 130.000 BI + 130. 200. Given beginning inventory 35. 30.2M) = P25.000 – 60.500b = 280.000 FC = 10. Answer: D Required: The cost estimation method that should be used to generate a function expressed as Y=a+bX Discussion: Regression analysis can be used to find an equation for the linear relationship among variables.15M 25. Discussion : Under the absorption method unit cost is P30 (P12 direct materials+P9 direct labor+ P4 variable overhead + P5 fixed overhead).250 19. 000 produced – 125.33% = 6.000 – 3.67% 23.35) = (13. 000 sold). . multiple regression is not used to generate an equation of the type Y=a+bX because multiple regression has more than one independent variable. Consequently. a multiple regression equation would take the form:Y=a+bX1+cX2+dX3n .000 – 50.BALIUAG UNIVERSITY CPA REVIEW 2013-14 MANAGEMENT ADVISORY MANAGEMENT – FIRST PRE-BOARD JACF EXAM __________________________________________________________________________________________________ Answer: C y = a + bx or a = y – bx (230. variable costing recognizes greater . 0000 units). Answer : A Required: The true statement comparing absorption costing and variable costing income. 000 produced – 125. However.35 (15.8M + 17. 000.000) = 35% BES: FxC ÷ CMR FxC = BES x CMR = 975.500 – 62.000 = (30M – COST) – 15% (1. . 000 (P30x40.750 ÷ (975. In other words. 000 sold.000 BES = 50.

000 / 0.20 / 1 = 0.000 / 0. or theft in the production areas. Answer: D Processing hours per unit: XY – 7: 0. The materials usage (or material quantity) variance.75 / 1 = 0. Which of the following is true of managerial accounting rather than financial accounting? D 54.20 x P0.000 59. Answer: D 44. when unfavorable. A 34. Traditional managerial accounting systems are often criticized for A 57. 38. Inventories increased by 5.000 hours: XY – 7: 100. Recognizing P25. B 55. D 50. D 35. P25. 000 of fixed manufacturing overhead would have been capitalized. C 42. B Discussion: The production control supervisor has the most control over the material usage variance. A 49. C 40. is often attributable to waste. D 43. B 46. The excess usage occurs under the supervision of the production department.75 or 45 minutes BD – 4: 0. 000 of fixed cost in the balance sheet instead of the income statement results in a P25. D 39. Answer B 41. D 52.20 or 12 minutes Additional contribution margin using 100. In a broad sense. the absorption method capitalizes that overhead and transfer it to future periods. A 48.333 BD – 4: 100.50 = P250. 000 difference in income between the two costing methods. Answer: B . When inventories increase during the periods. 37.75 x P1 = P133. cost accounting can be defined within the accounting system as C 56. A 36. shrinkage. and each of those units would have included P5 of fixed manufacturing overhead under absorption costing. 000 units during the period.BALIUAG UNIVERSITY CPA REVIEW 2013-14 MANAGEMENT ADVISORY MANAGEMENT – FIRST PRE-BOARD JACF EXAM __________________________________________________________________________________________________ expenses and lower income because some fixed costs of previous periods absorbed by the beginning inventory are expensed in the current period is never burdened with fixed costs of previous periods 33. A 51. The primary objective of management accounting is C 53. D 45. Accordingly. The variable costing method expenses it in the current period. B Required: The difference between absorption costing and variable costing income Discussion : The difference is caused by the capitalization of some of the fixed manufacturing overhead. Strategic cost management has emerged from a blending of D 58. The material usage variance measures the excess amount of materials used over the amount specified in the standards. B 47.

50 Direct labor 10.70 x 0.750 Computation of net present value: PV of ATCF: 88.250 Add back depreciation 62. Answer: C Direct material 2. Answer: C Before-tax cash flow 100.000 x 0.952 units which are within the first range.00 Direct labor 2.560 Total 517.40 Variable overhead 1.00 Required selling price 26.500 Book income before tax 37. 64.000 62.54 7. 60.00 Additional profit (40. .000 x 0.000. Answer: C Std.750 x 5.500 Less income tax (37.60 Avoidable marketing cost (0.000 Net present value 17.00 Variable overhead 3.000 x 0.500 x 0. Answer: B Budgeted fixed overhead (30. if ever the company has to decide buying the product. Any amount higher than P6.30) = P88.75 The maximum purchase price.000 x 2) 60. is P6.BALIUAG UNIVERSITY CPA REVIEW 2013-14 MANAGEMENT ADVISORY MANAGEMENT – FIRST PRE-BOARD JACF EXAM __________________________________________________________________________________________________ Units sold to earn P1M = (1.000 Applied FOH (25.000 Unfavorable volume variance 10.50) 1. The best characterization of an opportunity costs is that it is A 63.606 Investment 500.00 Variable selling expense 1.000 x 2) 50.000 + 1.50 65.000 35 Std.75 Relevant cost to make 7.75 will necessarily increase the unit cost of the product.250 Net book income 26.3) 11. Answer: D Direct materials 4.000) 8.7 x 2.200.046 PV of after-tax salvage value: 20. unit cost P65 61.000 / 8) 62.50) / 160.000 P30 Fixed OH (11. Which of the following statement is true? A 66.500 x . The problem did not include among the choices the assumption that salvage value will be deducted from the cost in computing the amount of annual depreciation.70) + (62.000 x .000.000 / 5.75.000) / 5.60) / 140.000 Less annual depreciation (500.25 = 380.747 510.952 The use of P1M fixed costs will require 380.500 Annual after-tax cash inflow 88.606 The problem assumed that the salvage value is ignored in the computation of annual depreciation so that the annual cash inflows will be greater.000.750 Alternative computation for ATCF: (100. unit cost: Variable (7. 67.

quality items among those aged 6 – 12 months would be the same as the proportion for the entire sample (30 / 130 = 23%).000 = 26.0M Inventory turnover 36M / 5M 7.000 36. Answer: A Annual sales 360 days x 100.4 (45 x 23%).BALIUAG UNIVERSITY CPA REVIEW 2013-14 MANAGEMENT ADVISORY MANAGEMENT – FIRST PRE-BOARD JACF EXAM __________________________________________________________________________________________________ Answer: D The amount of investment: the PV of annuity at IRR = 4. Answer: B Since the expected value is positive. Accordingly. Given the relationship between stock age and stock quality. The expected number of lowquality items aged 6 – 12 months is 10. the company should expect to make a profit if the product is introduced.0 days 69. the number regarding the age of the inventory for specific qualities are irrelevant.2x Inventory conversion period 360 / 7. one would expect that the proportion of low.130 68.355 x 6.2 = 50. END 1 2 3 4 5 6 7 8 9 1 0 Theor y of Accou nts Set B (Mock Board) 1 A 1 1 A 2 1 A 3 1 B 4 1 C 5 1 A 6 1 B 7 1 B 8 1 A 9 2 B 0 C A D A C B D A A C 2 1 2 2 2 3 2 4 2 5 2 6 2 7 2 8 2 9 3 0 A A C A B D D C B D 3 1 3 2 3 3 3 4 3 5 3 6 3 7 3 8 3 9 4 0 4 D 1 4 B 2 4 D 3 4 B 4 4 D 5 4 B 6 4 B 7 4 B 8 4 A 9 5 D 0 D D A D D D C D C D 5 1 5 2 5 3 5 4 5 5 5 6 5 7 5 8 5 9 6 0 D C C B C D D D A C 6 1 6 2 6 3 6 4 6 5 6 6 6 7 6 8 6 9 7 0 C B C B D A B D C D 7 1 7 2 7 3 7 4 7 5 7 6 7 7 7 8 7 9 8 0 B C D B C A B C D B 8 1 8 2 8 3 8 4 8 5 8 6 8 7 8 8 8 9 9 0 D 91 D A 92 C A 93 B A 94 C D 95 B A 96 A D 97 C D 98 C D 99 10 0 B D B . 70.

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