The Review School of Accountancy Final Pre-Board Examination 7:00 AM - 10:00 AM (09 April 2011. : db ‘ : «s- Management Services ~ INSTRUCTIONS: Select the correct answer for each of the following «questions. Mark only one answer for each item by shading the box corresponding to the letter of your choice on the answer sheet provided. “STRICTLY NO ERASURES ALLOWED. Use pencil no? 2 only. Set Bae Lady Company is considering a capital investment project with the following projected cash flows: Year Net Cash Flows oO (P 600,000) 7 P 240,000 2 p 2io,o00 ) 46% 3 P 200,000 ~ 15 4 P 185,000 Assuming project cash flows are evenly generated throughout the year, how many months of cash flows is needed in year_3 for the purposes of computing the payback period? a, 3 months b. 4 months (-& 6 months ( ay 9 months 2. The usual cause of difference between current ratio and quick ratio. a. Cash bh, Receivable c) Inventories ; Marketable Securities 3. A.20% markup on price is equivalent to a markup on cost of a, 2am F (ww “pl 338 c. 508 ou d. 1008 Te 4. JIT, TOM, ABM and TOC all make a contribution to 2. Encourage competition b) Eliminate all costs + &. Continuous improvement - d. ‘Assign costs differently than before 5. In 2011, Gaga Company has produced 20,000 units and sold 18,000 units. Assuming that the difference between absorption costing profit and variable costing profit is P 5,000, then how much is that total Fixed manufacturing overhead’ costein 20117 gy sepia ss 3 y VANE SUR HS b. P 45,000 e P 10,000 d. Cannot be determined from the given information Bruno Company orders 15 times during’ a year. Assuming an annual videmand of 18,090 units and a”'saféty*stock of °30C units, what is the average inventory in units? Late: lag 1,500 units : SiGer4 Ste = leek Were Krsee 4 1,200 units ovieh! 900 units Tore Ty aes dp 600 unite Cenof kiply dockoS) Final ‘Exam (May 2011 Batch) SS=Z7 09 April 2011 * 7:00 AM to 10:00 AM Page 2 px Aen 2011-7 ee @ Questions 7 through 12 are based on the following information _Maraj,Industries has recently developed, two new products, a cleaning unit Woe BvDs and a tape duplicator for reproducing home ‘movies taken with a ‘video camera. However, Mars has only enough plant capacity to introduce one fof these products during the current year. The company controller has jgathered the following data to assist management in deciding which product b@'should be.selected for production: Sag baad Tape Cleaning : | puplicator unit Raw: materials 4 P 44.00 P 36.00 oMachine @ P 12/br. |y. Jae F 18.00 15.00 -UAgsémbly @ P 10/hr: op ARR 30.00 10.00 “Variable overhead @ P 8/hr: er, «36.00 18.00 + \Pixed overhead @ P 4/hr. \ 18.00 9.00 Total cost : 2146.00 P88..00 i Suggested selling price PB 169.95 P'99.98 Actual research & development costs Pp 240,000' . P 175,000 Proposed advertising & promotion costs P 500,000 —P_350,000 Mars’s fixed overhead’ includes rent and utilities equipment depreciation and supervisory salaries. Selling and’ administrative expenses are not @llocated to products. 7. For Mars tape duplicator, the unit costs for raw materials, machining, and assembly represent y @. Conversion costs — 0% *Pu b. Separable costs c. Committed costs (@.) Prime costs - aon +m. 8. The difference between the P 99.98 suggested selling price for Mars DVD cleaning unit and its total unit cost of P 88.00 represents the unit's = Contribution margin ratio 7 . (2) Gross profit — + Contribution d. Gross profit margin ratio 9. The total overhead cost of P 27.00 for Mars DVD cleaning unit is a a. Carrying cost b. Discretionary cost c. Sunk cost d. Mixed cost~ 10.Research and development costs for Mars ‘two new products are a. Conversion costs bj Sunk costs « c. Relevant costs- d. Avoidable costs “11 {The advertising and promotion costs/ifor the product selected by’ Mars will be : : _avs Discretionary costs> b.F Opportunity costs Ci. Committed costs dy--Incremental costa’ ¢ 1! osts included in Mars fixed overhead are Joint costs «+ oli j Committed costs ~ ae Opportunity costs Bcime costsce operates a. fleet of delivery trucks in a large JS petropolitan area. A careful: study by the company’s cost analyst tas ‘G etermined that if truck is driven 120,000 miles during a year, the Mvetage operating cost is 11.6 pesos per mile. If a truck is driven only 80,000 miles during a year, the average operating cost increases to 13.6 pesos per mile. ~ “13.Britney Parcel Servi © using the high-low method, estimate thesslope value of the cost line. 4 a...7.6 : b. 12.4 : ce 96,000 i - an d. 480,000 = Bes, ' eO- NO ‘Questions 14 to 18 are based on the following information: Spears Company ~nanufactures a line of. products distributed nationally through wholesalers. Presented below are planned manufacturing data for the year and actual data for November of the current year. The company applies gverhead based on planned machine hours using a predetermiged annual rate? Planning Data Rnnual, November. Fixed manufacturing overhead 5 (P 1,200,060, P 100,000 Vv Variable manufacturing overhead. 2,400,000 220,000 “——~ Direct labor hours "48,000 4,000 Machine hours 240,000 22,000 November Direct labor hours (actual) 4,200 Direct labor hours (plan based on output) 4,000 Machine hours (actual) i Machine hours (plan based on output) 90 Fixed manufacturing overhead P 101,200 variable manufacturing overhead P 214,000 14.The predetermined overhead application rate for Spears Company is a. P 25.00 : 3 b,) P 15.007 \of P 10.00 sd. P 5.00 15.The total amount of overhead applied production for November was (a. P 316,200 ‘chat ire ts b) P 315,000~ “e% BP 320,000 : a. P 300,000 ¢ 16.The amount of over-or-underapplied ‘variable manufacturing overhead for November was ‘2x P 6,000 overapplied (1) P 4,000 underapplied ~ P 20,000 overapplied d. P 6,000 underapplied 11. The. variable overhead spending variance for November was & a) B 2,000 favorable -~ 5 ViYyow Uo : BZ. P 6,000 favorable 4) Ses. P 14,000 unfavorable i 4 8s, P 6/000 unfavoraple 94 I RPO 18.Tho fixed overhead volume Variance for November was c =a. P 1,200 unfavorable wba. P.5,,000 unfavorable Dy P 10,000 favorable P 5,000 favorable ~ \e Yea 1v0gs weS77 09 April 2011 « 7:00 AM to 10:00 AM to.cristina placed’ P 300,000 in 2 tén-year capital investnent project. grcristina Ditash flow inflow after income ‘taxes from this project was Jestinated to be P 58,500. The company’s Sat-off cate on investments Petite type was 14%, Information on the present value factors \ follows: = 14s @ 158 Present value of P 1 for 10 periods 0.270 0.247 | ereeen value of af annutty"of P L'for 40 periods 5.216 5.019 \ qhe’company’s internal rate of return’on this investment: is: a, 148 b. 158 \taz ¢. Less than 14% but more than 0% @. Less than 15% but wore than 14% 7~ 20.The long-term goal of financial management is to a. Avoid risk b. Maximize profits ‘ E ©. Maximize shareholders’ wealth — ¥ d. Maximize the book value of assets 21.The following data pertains to Aguilera Company? Total cost Unit cost 3 sales (40,000 units) P 1,000,000- P25 ; Raw materials 160,000. at ' Direct labor 280, 000- rv Factory overhead variable a0,000° 2 V Fixed oD" 2 Selling and general expenses g Variable 120,00 5G § Fixed < 228,00 nat is the maximum that Ascuming that Aguilera sells 60,000 units, €an be paid for an advertising campaign while still breaking even? i a) P 135,000> ee i » P 535,000 [20h oe bse ye é ¢ ©. P 695,000 “Seale ae me i ea st ve d.. P 1,015,000 = oe ae gos % ATX 22.Which combination of ratios can be used to derive return on equity?” vo” Market value to book value ratio and total debt to total assets 4 jy Rs ratio NI b. Price to earnings ratio, earnings per share, and net profit yf margin ; Sac . Price to earnings ratio and return on assets (@ Nee profit margin, asset turnover, and equity multiplier gu 23.A company is in ‘need of a short-term source of funds. Local banks aad a finance company have offered the needed funds under each of the following sets of terms. All involve a one-year note. <'"e.;Bank one: P 100,000 note, 12% interest. * 2 “Seo pank two: 2 100,000 note, 10% interest, 20% compensating balance Tequired. Bank thrée: P°110,000, noninterest-bearing note, discounted.at 11%, Finance company: P 100,000 note; ii¥ interest, with an up-front ‘eharge of six points (68). / © i ‘ Which option is the most cost=efficient alternative? ) = taker atoce cron ing eli[09 April 2011 * 7:00 AM to 10:00 AM Questions! 24 and 25 are based on the following information. é Justin’ Company has common and preferred. shares outstanding with the ‘following ‘characteristics: I 3 Commo Shares Preferred Shares ‘number of shares outstanding 50,000 Dividends paid during the year —_P-_ 1), 000 Year-end market per share P10 Book value of equity P 500,000 P 250,0000 ©. For the year just ended, the company had the following statement income: saies revenue P 1,000,000 Cost of goods “sold 300,000 Depreciation expense 100,000 ; Earnings before interest and tax PF 600,000 Interest expense 100, 000 Earnings before tax P 500,000 ‘ Tax expense 250,000 Net income E250, 000 24. Justin Company has earnings per share of a. P 2.67 eo pet Ineore ase os bl P3133 i a Serre e,) P 4.00- phen Sere Me Cat p s100 25.dustin Company has a rate of return on common equity of ; a. 26.678 ow b. 33.338 22 +p ce. 40.008 OO a. 50.008 ~ ° ND 26.A company that has a profit can increase its return on savestaae'by i ~a, Increasing sales and operating expenses by the same amount ‘a, ‘Increasing average operating assets and operating expenses by the same amount sc. Increasing sales and operating expenses by the same percentage ss. de Decreasing operating assets and sales by the same percentage “©27.Management of a4 bookkeeping company observed that the average time spent to perform identical tasks using a new software package 4 decreases as the number of tasks performed increases. The following information on the utilization of the new software was collected. Number ‘of Total time to Average time to tasks performed perform all tasks Perform each task v 10 minutes 10 minutes 2 18 minutes 9 minutes 4 32.4 minutes 8.1 minutes 7 If this learning effect continues, what is the total time required to | perform the first eight tasks? a, 58.324 b. 64.80 cea) €., 72.00 | | ote! Hl stpe nia Xr are g “appraisal cost Prevention cost \Internal failure cost “+ GieycExternal failure cost«AE MANAGEME “(854)}) Final Pre-Board Exam (May 2011 Batch) S) (09 April 2011 © 7:00 AM to 10:00 AM Page 6 © (/e9.Gdher “company has 10,000 outstanding shares with a market value of P ae Seach. It just paid a P 1 per stare dividend. Dividends are Diva Bosked vo grow at a constant rate’ of 10%, If flotation costs ‘are |S of the selling price, the cost of new equity financing is ‘as 14,008 = qovth vet b. 14,218 See ie e. 14.408 a. 14.63% — 30.ddentify the incorrect statement regarding cost estimation. ‘a. In interpreting regression results, the higher the ° Gorrelation, the better cost predictions are likely to be. =~ b. High-low, scatter diagram, end regression analysis are methods, of developing formulas to predict mixed costs. ~ c. An r-squared of 0.91. with a. regression. equation means that predictions will be accurate 91% of the time. d. The scatter diagram method is supérior over Wigh-low as‘ the former considers more thah just two points of activity level. ~ Questions 31 through 34 are based on the following information. Bieber Company sells its single product at a price of P 0 per unit and incurs the following variable costs per unit of product: Direct’ material p16 23, Direct labor tee 6 Manufacturing overhead 7 Total variable manufacturing costs P35 a Selling expenses 5 Total variable costs P40 Bieber’s annual fixed costs are P 880,000 and Bieber is subject to a 30% income tax rate. 31.A production and sales volume of 4,000 units of product per month would result in an annual after-tax income (loss) for Bieber Company of” P 56,000 — Beoue P 80,000 — gat cc. {BP $60,000) Ro a. (P 800,000) - “yuu “re0N) 32.The number of units of product that Bieber Company must sell annually to break even is a. 22,000 units b. 30,800 units ce. 35,200 units Seo @ 44,000 units — ae 33.The: annual sales revenue required by,Bieber: Company. in order'='to achieve after-tax net income of P 224,000 for the year is P 3,600,000 TaT a P 3,312, 000° SSP 3,110, 400 ‘ Eat dav: P 1,656,000 If!prime costs increased by 20% and all other ‘values remained the zsame,..Bieber Company's contribution” margin ratio (roundedto the Shearest whole percentage) would be; to iFinal Pre-Board Exam (May 2011 Batch) "A wat Page 7 (09 April 2011 * 7:00 AM to 10:00 AM PPR 08 apr 2011 7:00 AM to 10:00 +g purdle rate ‘of 15%, @ prospective investment has a pased on this information, it can be © 35.At a company’ | "profitability index of 1.15. | | “Concluded that = eee accounting rate of recur 4g, greater ‘they 158 o.. The internal rate of return is lesa_than 25% cy The payback period ‘is shorter than the life of the asset @)) The internal rate of return is greater than 15% f 46.chrts Manufacturing, tne. used to assign factory overhead costs to products based on 800% of labor cost. _ 7s company’ just implemented products based on Svaces overhead to pracucts, based op, consuytlo® of major activities as indicated below: SEEN i ‘Activity pool Total activities Traceable overhead - e 7 Labor PB 300,000 Pp 30,000 - 2 i Machining 20,000 hours p.500,000- 2 sO : ‘Setup ~ 10,000 setups p100,000° 10 Ww : Production order 2,000 orders P 200,000 90 |> P 20,000 2 5 Material handling 1,000 requisitions among the products manufactured by Chris, product sprown” posted the rigndst profit margin. Further study on product Drown shows that its weeieity consumptions were: P 2,000 worth of Jabor/ 5 requisitions; 32 orders; 800 machining hours; 100 setups. under-applied if the By how much is product Bréwn overhead cost mm instead of activity~ cémpany were to use traditional costing syste based costing system? a. P 6,500 ~ baa I b. P 8,300 Jeo c. P 15,500 r da. P 16,000 j 37.The balanced scorecard approach does | not require looking at performance from which of the following perspectives? a: Owners b. Competitors + 4 c. Employees and managers d. Internal business processes 3,200 machine hours of plant capacity and 38.Katie Perry Company has failable for manufacturing two products with infinite labor hours avi the following characteristics: x " Selling price P 200 P 165 Costs: Direct materials Pp B0~ P 40 Direct labor* a ~407 -35 Variable overhead** 3?*~ itis ~~ 2480 Fixed overhead** 37 foe operating expenses (variable) ApS Total ie Net income ena. oo 18 es * applied on the basis of labor-hours. 4+ applied on the basis of machine hours ‘Assuming that there is.no market limit, ‘could be attained under the scenario? <-~say -P 96,000 * b. “P80, 000th 1c, :P 72,000 d. “P 64,000 what is the maximum CM that CM [YAR® bos cal ~, Creat te a By Page 8 ———= 3geWhich:of these represents 4 firm's av@¥age gross receivables balance? a. Days’ sales in receivables x accounts receivable turnover b, Average daily sales x average collection period Candid sap c.. Net sales + average gross receivables f d. Cash conversion cycle - normal operating cycle erty 40.Pitbull Shop. is preparing its cash budget for the month of May. Pitbull pays 60% of purchases in the month of purchase and the remainder the next month. Operational information follows: Beginaing inventory, May 1 P( 20, 008 4 ‘ Estimated May cost of goods sold 100,000" Estimated May ending inventory ~ £35,000) \ere April purchases 90,000 / What are Pitbull’s estimated cash payments for shoes in -May? a. P 115,000 oy doy. 4 b. P 105,000- ‘ % c. P 87,000 gD a. P 70,000 lic 468 ‘41.Which one of the following would not be considered a carrying cost associated with inventory? a. Insurance costs b. Cost of capital invested in inventory €. Cost of obsolescence d. Shipping costs ~ 5 42:Enrique Company reported salaries expense of P 95,000 for 2011. The following data were extracted from the company’s financial records: 31_Dec-2010 31 Dec 2011 Prepaid Salaries

4,000") Labor efficiency variance, (favorable) s}) nel Pre-Boord Exem (Hay 2041 Batch) S=¢7 09 April 2011 * 7:00 AM to 10:00 AM 45.Throughput time is 12 days; lead time is 15 days: value-added time is "°3 days; manufacturing cycle efficiency ratio is iy Pas Le b. 208 - : Ci 25%) a. 808 46.The economic value of a firm will rise following an increase in 2 vag Net cash flow? “sb, Systeniatic risk Q c. Unsystematic risk d. The discount rate 47.4 company with P 280,000 of fixed cost has the following data: Product A Product B unit sales price PS P6 _ Unit variable costs P3 8,5. 2, Assume 3 units of A are sold for each unit of B, ‘How much will be sales in pesos of product B at the breakeven point? a. P 200,000 b. P 240,000, ce. P 600,000 d. P 840,000 48.The emergence of electronic data interchange (EDI) as standard fi operating practice increases the risk of FE a. Unauthorized third-party access to systems ° r b. Systematic programming errors P c. Inadequate knowledge bases d. Unsuccessful system use 2 E 49.A firm has the following capital structure: 70% debt and 30% equitys E interest rate on debt is 12% and on common stock is 14%. If the WACC : is 9.66%, then what is the marginal tax rate? Ih a. 358 . b. 408 ey 608 euy + 4a q d. 65% 7 50.A fixed cost is considered relevant if it is a. A future cost b. A product cost c. Sunk d.. Avoidable ~ © 51.A company has 100,000 outstanding common shares with a market value of P 20, per share. Dividends of P.2 per share were paid in the "cy eurrent year and the company has-a dividend payout ratio of 408. The price to earnings ratio of the company is =p a, 2.5 ,) RS an MPS epe ¢. 10 ay 50- ner go. ® kit '52.An. executive information system | (BIS) has all the following characteristics, except : Focusing on obtaining strategic objectives Giving iamediate information ahout an organization’s critical success factors Providing information from nontyaditionally computer sources ~: “Providing advice and answers to top management from a@ “knowledge-based systenMANAGEMENT SERVICES = (es) Final Pre-Board Exam (May 2011 Batch) (09 April 2011 #.7:00 AM to 10:00 AM Page 10 53.A target in the balanced scorecard ramework is va. A statement of what the strategy must achieve and what is Aes es critical.to its success a —b. A key action program required to achieve strategic objectives i cS. A diagram of the cause-and-effect relationships between strategic objectives d. The level of performance or rate of improvement needed in the performance measure. | 54,The Rihanna Company manufactures and sells two products ~ a toddler | bike and toy high chair. Linear programming is employed to determine | the best production and sales mix of bikes and chairs. This approach i also allows Rihanna to speculate on economic changes. For example, p management is often interested in knowing how variations in selling prices, resource costs, resource availabilities, and marketing strategies would affect the company’s performance .; The demand for bikes and chairs is relatively constant throughout the i year. The following economic data pertain to the two products: Bike _(B) chair _(¢) Selling price per unit Piz P10 Variable cost per unit PB Pq { Contribution margin per unit Pe P3 ' Raw materials required es | Wood 1 board feet 2 board feet } Plastic 2 pounds 1 pound Direct labor required 2 hours: 2 hours i i Estimates of the resource quantities available in a non-vacation | month during the year are: | Wood 10,000 board feet } Plastic 10,000 pounds a | Direct labor 12,000 hours oy 2 Which of the following expressions will not be used in a linear programming model for the toddle bikes and toy high chairs? a. B,C 20 Hi b. B+ 2c $ 10,000 i @® 10,0002 28-c i d. 12,000 = 28 2 2c’ ake 55.The precautionary motive for maintaining cash is i" a. Holding money for the “rainy days” ; 5 b. Holding money for the bank requirements Br ¢. Holding money for the day-to-day transactions es d. Holding money while waiting for stock prices to rise i . ig 36.3 Lo company has the following information: S pig an Current ratio 2,5: Ee Return on sales y 308 ae a Inventory turnover 1,5 % eo Days sales outstanding 110 days os i ‘ Times interests earned 6x a HR cbr Payable deferral period. 2 months fs" Assuming a 360-day year, how long is: J:Lo’s cash conversion cycle? ge 350 days < et 290 days ~ pee 29) Ves, 270 days shee Pr! Wd. 250 days 4 iFinal Pre-Board Exam (May 2011 Batch) j ‘09 April 2011 © 7:00 AM to 10:00 AM Page 11 ———_—e | >'Ttems 57 to 60 are based on the following information In order to increase production cepacity, Taylor Industries is cdteidering replacing an. existing production machine with a! new technologically improved machine effective January 1. The following information is being considered by Taylor Industries: ‘The new machine would be bought for P 160,000 in cash. Shipping, ‘installation and testing would cost an additional P 30,000. > ‘The new machine is expected to increase annual sales by 20,000 units at a sales price of P 40 per unit. Incremental operating costs include P 30 per unit in variable costs and total fixed costs of P 40,000 per year. %, The investment in the new machine will require an immediate s)increase in working capital of P 35,000. This cash outflow will ‘pe recovered at the end of year 5. > Taylor uses ‘straight-line depreciation for financial reporting and tax reporting purposes. The new machifie has en estimated useful life of 5 years and zerd-salvage value. 77 4 > Taylor is subject to a(40% corporate income tax_rate. Taylor uses the net present value method to analyze investments and will employ the following factors and rates: PV of an ordinary Period Pv of P 1 at 108 annuity of P 1 at 108 tT 0.903 0.909 2 0,826 1.736 3 0.752 2.487 4 0.683 3.170 5 0.621 3.791 -57.Taylor’s net cash outflow in a capital budgeting decision is a. P 190,000 b. P 195,000 c. P 204,525 (P 1,000,000) a P 250,000 P 10,000 — (P 200,000) 2 P 250,000 P 10,000 - 5 P 250,000 P 10,000 - 4 P 250,000 P 10,000 - 5 P 250,000 P 10,000 = 6 P 250,000 P 10,000 - 7 P 250,000 P 10,000 - 8 P 250,000 P 10,000 - 9 P 250,000 P 10,000 7 10 P 250,000 P 10,000 ic 11 P 300,000 P 10,000 . 12 P 300,000 P 10,000 - 13 P 300,000 P. 10,000 > 14 P 300,000 P 10,000 - 15 P 300,000 P 10,000 = a 16 P 400,000 P 20,000 - v7 P 400,000 P 20,000 - 18 P 400,000 P 20,000 - 19 PB 400, 000 P 20,000 - 20 P 400,000 P 20,000 - 21 P 500,000 P 20,000 - 22 P 500,000 20,000 = 23 P 500,000 P 20,000 a 2a P 590,000 P 20,000 = 25 P 500,000 P 20,000 = S6.The cash flow margin in year 21 is higher (lower) than the cash flow Margin in year 20 by a 18 rebe > 38 . o> (18) a. (38) ©2-Assuming thet year 8 serves as the- base year, what is the gross Fevenue index for year 16? a. 0.60 b. 1.25 : c.. 1.60 d. 2.00 Mo-mesuming a 2% cost of capital, what is’ the het present value of the Project? es 7a." P 265,570 Be gt “b. (P 734,430) Tae ae S- (P. 934,030) (P 1,213, 440) ~ END o£ Pawitrzon ~ : “tipi 1 mostly a matter of choice wil Hes longue that go with it.” = oneRequired cash flow from year 3: 000 ~ 240,000 ~ 210,000 = 150,000 (60,000 + 200,000) x 12 mos. = 9 mes. 3. Profit = 20%; Sales = 100%; Cost = 80% ‘Markup on cost: 20% + 80% = 25% 5. A Income = A Inventory x unit FFOH 5,000 = (20,000 ~ 18,000) unit FFOH ‘Total FFOH: 2.50 (20,000) = P 50,000 6. E0Q: 18,000 + 15 = 1,200 units Ave. inventory: (1,200 + 2) + 300 13. Unit variable costs (slope): AY = AX (4.392 M - 1.088 M) + (120,000 - 80,000) £14, SR: P 3,600,000 + 240,000 | 15. SHSR: 21,000 hours x P 15 per hour 1,000 (10) {6. AFOH (V): 214,000 SFOH (V): 17, AFOH (WV): 214,000 BAAH (V): 21,600 (10) "| 21, BEPus = Fixed costs ~ unit CM |, £0,000 (250,000 + 225,000 + x) + a1 16) a 2 x 4am (60 ~ 40) ~ 880,000} x 30% 800 (25) + 100 (10) = P 22,500 raditional: 800% (2,000) = P 16,000 138. Product X: 25 + 1 = 25 er hour. Product Y: 40 + 2 = 20 per hour Maximum CM: 25 x 3,200 hours 7-40. May purchases: 100,000 + 35,000 - 20,000 = 115,000 ‘May cash payments: 160% (115,000) + 40% (90,000) re-board examinat SOLUTIONS to SELECTED MS ITEMS oe 20,00 May 2011 batch 42, 95,000 + (23,000-20,000) ~ (85,000 - 70,000) 44, DL Variance: 4,000 U + 18,000 F = 14,000 F Payroll: SC ~ Variance = P 342,000 - 14,000 12 days 47, Wed. Ave. unit CM:-2.(75%) + 1 (25%) = 1.75 BES! 280,000 + 1.75 = 160,000 Product B: 160,000 (25%) P 6 45. MCE ratio: 3 days 49, 9.66% = 70% (x) + 30 % (14%) Tax rate: 100% ~ (7.8% + 12%) = 35% 51. Payout: 40% =P2+EPS EPS = PS Price-earnings ratio: P 20 = PS = 4 times 54, Constraint function: + .Non-negativity constraint: B,C 2 0 + Wood: B + 2C s 10,000 + Plastic: 2B + C < 10,000 = Direct labor: 2B + 2C < 12,000 56. 110 + (360/1.5) - 2(30) 57. 160,000 + 30,000 + 35,000 59. 40% (190,000 + 5) x 0.909 ; 59. 20,000 (40 - 30) x 60% x 3.791 460; 35,000 (0.621) - 35,000 a: 62, (60,000 (32 - 18)] 25% - 80,000 10.4 14.50 + 2.30 + 3.20 + 1,70 + + (9,000/20,000) (64. The production costs, though variable, .are ‘considered irrelevant because they are historical (sunk) costs. 65. Continue: (P 43,000) © €M: 60,000 (2/12) 30% (32 ~ 18) = P 42,000 Fixed costs: 60,000 (2/12) x 8.50 = P 85,000 wn: (P FFOH: 60,000 (2/12) x 5 x 60% = P 30,000 FSAA: 60,000 (2/12) x 3.5 x 80% = P 28,000 66. 10 + 4,50 + 2.30 + (0.75) 5 + 1.20 (1/3) 87. 0= 60) x 40% x 1,000 units xP 10 "Old AR balance: 10, 000 x 34 days = 340,000 "20; 20,000 + 400,000 = 5% 69. Year 8: 100% Year 16: 160% € 400,000 + 250,000 70. BV, inflows 10,000 (12.848) + 20,000 (19.523 ~ 12.649) PV, outflows i 1,000,000 + 200,000 (0.980) NPV: 261,970 ~ 1,196,000 = (P 934,030)