POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

College of Accountancy and Finance

Sta. Mesa, Manila

ACCO3133 MANAGEMENT ACCOUNTING PART 2

Final Departmental Examination
October 8, 2017

THEORIES (1 POINT) PROBLEMS (2 POINTS)

1 A 31 C
2 B 32 D
3 B 33 B
4 E 34 B
5 A 35 C
6 B 36 A
7 C 37 D
8 C 38 D
9 B 39 B
10 C 40 A
11 D 41 A
12 D 42 B
13 E 43 B
14 C 44 E
15 E 45 D
16 C 46 B
17 A 47 C
18 D 48 D
19 A 49 A
20 D 50 A
21 C 51 A
22 C 52 A
23 D 53 A
24 B 54 C
25 D 55 A
26 B 56 B
27 B 57 B
28 D 58 B
29 C 59 B
30 C 60 B
61 B
62 A
63 D
64 C
65 B
 POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
College of Accountancy and Finance
Sta. Mesa, Manila

ACCO3133 MANAGEMENT ACCOUNTING PART 2

Final Departmental Examination
October 8, 2017

THEORIES (1 point each)

1. Kena Corporation is in the process of overhauling the performance evaluation system for its Aren
manufacturing division, which produces and sells parts that are popular in the aerospace
industry. Which of the following is least likely to be chosen to evaluate the overall operations of
the Aren division?
a. Cost center
b. Profit center
c. Investment center
d. Responsibility center
e. The profit center and investment center are equally unlikely to be chosen

2. A cost center manager

a. often oversees divisional operations
b. does not have the ability to produce revenue
c. may be the manager who oversees the operations of a retail store
d. may be involved with the sale of new marketing programs to clients
e. would normally be held accountable for producing an adequate return on invested capital

3. Performance reports help managers

a. design their organizational hierarchy
b. use management by exception and effectively control operations
c. decide whether a cost, profit, or investment center framework is appropriate
d. all of the above
e. none of the above

4. Which of the following statements about performance reports is/are false?

a. Many performance reports have budget, actual, and variance data.
b. Performance reports provide feedback to managers and allow them to better control
operations.
c. Performance reports are often structured around a firm's organizational hierarchy—that is,
data relating to lower-level units (e.g., departments) are combined and flow into higher-level
units (e.g., stores).
d. All of the above
e. None of the above

5. Statement 1: Property tax expense for a department store's store equipment is a direct cost.
Statement 2: Supplies used by the accountants are considered as direct cost of the accounting
department.
a. True, True c. False, False
b. True, False d. False, True

6. Which of the following statements about residual income is/are true?

a. Residual income is a percentage measure, not a peso measure.
b. Residual income incorporates a firm's cost of acquiring investment capital.
c. If used correctly, residual income may result in division managers making decisions that are
in their own best interest and not in the best interest of the entire firm.
d. All of the above
e. None of the above

7. Statement 1: ROI will decrease if there is an increase in the interest expense for that segment
Statement 2: ROI will increase if there is an increase in the interest expense for that segment

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 a. True, True c. False, False
b. True, False d. False, True

8. Statement 1: Cost-based transfer prices are best for the company when the selling division is
operating at capacity
Statement 2: Given an idle capacity, the optimal transfer price would be equal to the sum of
outlay cost and opportunity cost
a. True, True c. False, False
b. True, False d. False, True

9. Statement 1: If the transfer price between two divisions was increased, there will be no effect
on the overall profit of the organization
Statement 2: If the transfer price will be decreased, there will also be a decrease in the profit of
the entire organization.
a. True, True c. False, False
b. True, False d. False, True

10. Which of the following is not incorrect about transfer pricing?

a. Multinational companies must use transfer prices based on actual costs
b. Differences in tax rates between countries will not affect the transfer pricing decision.
c. If sales increase, while income and investment remain constant, ROI remains the same.
d. The transfer price used for internal transfers between divisions of the same company can
neither increase nor decrease each division's reported profits.

11. This year, Division A made sales to Division B at a higher transfer price than was used last year.
All other things equal, which of the following is true?
a. B's profit this year should be about the same as last year.
b. A's profit this year should be about the same as last year.
c. The company's total profit should be higher this year than last year.
d. The company's total profit should be about the same this year as last year.

12. Goal congruence is especially relevant to all of the following, except

a. setting transfer prices for an investment center
b. setting transfer prices for an artificial profit center
c. selecting costs to be included in performance reports
d. quoting prices for outside customers of an investment center

13. Which of the following is not a major influence on pricing decisions?

a. Costs d. Political and legal issues
b. Competitors e. Planning & control policies of the
c. Customer demand firm

14. If a company uses a cost-plus approach to pricing, it will find

a. it is in violation of generally accepted accounting principles (GAAP)
b. there are several different definitions of cost and the higher the cost, the higher the markup
percentage
c. there are several different definitions of cost and the higher the cost, the lower the markup
percentage
d. there is one definition of cost, and there is no relationship between cost and the markup
percentage used
e. there is one definition of cost, and there is no markup percentage with the cost-plus approach

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15. Under the time and material pricing method, a customer would be charged for
a. material costs
b. material and labor costs
c. material, labor, and overhead costs
d. material and labor costs, plus a profit margin
e. material, labor, and overhead costs, plus a profit margin

16. Statement 1: The opportunity cost of making a component part in a factory with excess
capacity for which there is no alternative use is equal to the contribution margin lost
Statement 2: Costs relevant to a make-or-buy decision include variable manufacturing costs as
well as unavoidable fixed costs
a. True, True c. False, False
b. True, False d. False, True

17. Statement 1: Marginal revenue, by definition, is the change in total revenue associated with
producing and selling one more unit.
Statement 2: In a decision analysis situation, depreciation is not likely to contain a variable
cost component.
a. True, True c. False, False
b. True, False d. False, True

18. Statement 1: The disposal price of the old equipment is irrelevant to a manufacturing
equipment replacement decision.
Statement 2: Some fixed costs may vary among the alternatives and would be relevant, but
not all fixed costs are relevant
a. True, True c. False, False
b. True, False d. False, True

19. Statement 1: Discretionary costs are costs that can be deferred to future periods without
creating a significant impact on the current period's results.
Statement 2: General office costs will generally not differ among the options, therefore they
are not relevant.
a. True, True c. False, False
b. True, False d. False, True

20. Management accountants are frequently asked to analyze various decision situations. The
following describes relevant costs include except:
a. Alternative uses of plant space, to be considered in a make/buy decision.
b. The cost of a special device that is necessary if a special order is accepted.
c. Research and development costs incurred in prior months, to be considered in a product-
introduction decision.
d. The cost of obsolete inventory acquired several years ago, to be considered in a keep-versus-
disposal decision.

21. Tokyo, Inc. produces Xylose in a joint manufacturing process. The company is studying whether
to sell Xylose at the split-off point or upgrade the product to become Xylene. In making upgrade
decision, information below should be reviewed except:
a. Selling price per pound of Xylose.
b. Selling price per pound of Xylene.
c. Joint manufacturing costs to produce Xylose.
d. Avoidable fixed costs of the upgrade process.
e. Variable manufacturing costs of the upgrade process.

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22. When a decision is made in an organization, it is selected from a group of alternative courses of
action. The loss associated with choosing the alternative that does not maximize the benefit is the
a. Net realizable value. c. Opportunity cost.
b. Incremental cost. d. Expected value.

23. Which of the following capital budgeting techniques does not routinely rely on the assumption
that all cash flows occur at the end of the period?
a. Internal rate of return c. Profitability index
b. Net present value d. Payback period

24. Statement 1: Both the net present value method and the internal rate of return method can be
used as a screening tool in capital budgeting decisions
Statement 2: When considering a number of investment projects, the project that has the best
payback period will also always have the highest net present value.
a. True, True c. False, False
b. True, False d. False, True

25. Some investment projects require that a company increase its working capital. Under the net
present value method, the investment and eventual recovery of working capital should be treated
as:
a. a future cash inflow
b. an initial cash outflow
c. irrelevant to the net present value analysis
d. both an initial cash outflow and a future cash inflow

26. Statement 1: In calculating payback where new equipment is replacing old equipment, any
salvage value to be received on disposal of the old equipment should be deducted from the cost
of the new equipment.
Statement 2: When cash flows are uneven and vary from year to year, the internal rate of
return method is easier to use than the net present value method
a. True, True c. False, False
b. True, False d. False, True

27. Many firms use the payback method as a guideline in capital investment decisions. Reasons they
do so include all of the following except
a. it gives an implicit consideration to the timing of cash flows
b. it recognizes cash flows which occur after the payback period
c. it is a measure of risk exposure
d. it is easy to calculate

28. The payback method assumes that all cash inflows are reinvested to yield a return equal to
a. The discount rate. c. The internal rate of return.
b. The hurdle rate. d. Zero.

29. As to a capital investment, net cash inflow is equal to the

a. Cost savings resulting from the investment.
b. Sum of all future revenues from the investment.
c. Net increase in cash receipts over cash payments.
d. Net increase in cash payments over cash receipts.

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 30. The time value of money is considered in long-range investment decisions by
a. Investing only in short-term projects.
b. Assuming equal annual cash flow patterns.
c. Assigning greater value to more immediate cash flows.
d. Ignoring depreciation and tax implications of the investment.

PROBLEMS (2 points each)

31. Evaluate the following projects using the payback method assuming a rule of 3 years for payback

Year Project A Project B

0 -10,000 -10,000
1 4,000 4,000
2 4,000 3,000
3 4,000 2,000
4 0 1,000,000

a. Both projects can be accepted because the payback is less than 3 years.
b. Project B should be accepted because you get more money paid back in the long run.
c. Project A can be accepted because the payback period is 2.5 years but Project B cannot be
accepted because its payback period is longer than 3 years
d. Project B should be accepted because even though the payback period is 2.5 years for project
A and 3.001 project B, there is a P1,000,000 payoff in the 4th year in Project B

32. Should ABC Mining company accept a new project if its maximum payback is 3 years and its
initial after tax cost is P5,000,000 and it is expected to provide after-tax operating cash inflows of
P1,800,000 in year 1, P1,900,000 in year 2, P700,000 in year 3 and P1,800,000 in year 4?
a. Yes, payback period is 3.33 years
b. No, payback period is less than 3 years
c. Yes, payback period is less than 3 years
d. No, payback period is more than 3 years

For items 33 – 36:

A firm must choose from six capital budgeting proposals outlined below. The firm is
subject to capital rationing and has a capital budget of P1,000,000; the firm's cost of capital is 15
percent

Project Initial Investment IRR (%) NPV

1 P 200,000 19 P 100,000
2 400,000 17 20,000
3 250,000 16 60,000
4 200,000 12 (5,000)
5 150,000 20 50,000
6 400,000 15 150,000

33. Using the internal rate of return approach to ranking projects, which projects should the firm
accept?
a. 1, 2, and 5 c. 1, 2, 3, 5, and 6
b. 1, 2, 3, and 5 d. 1, 2, 3, 4, 5, and 6

34. Using the net present value approach to ranking projects, which projects should the firm accept?

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 a. 1, 3, and 6 c. 1, 2, 3, 5, and 6
b. 1, 3, 5, and 6 d. 1, 2, 3, 4, 5 and 6

35. What is the profitability index of Project 4?

a. -1.025 c. 0.975
b. 0.025 d. 1.025

36. Using profitability index to rank, which project would be the most preferred?
a. Project 1 c. Project 4
b. Project 2 d. Project 6

For items 37 – 39:

Project A Project B
Initial End of Year Initial End of Year
Investment Cash Flows Investment Cash Flows

400,000 200,000 900,000 400,000

200,000 400,000
200,000 800,000

37. The new financial analyst does not like the payback approach and determines that the firm's
required rate of return is 15 percent. Using NPV approach, his recommendation would be to
a. reject both c. accept project A and reject B
b. accept projects A and B d. reject project A and accept B

38. Using profitability index, what would be his recommendation?

a. reject both c. accept project A and reject B
b. accept projects A and B d. reject project A and accept B

39. If the firm has a required discounted payback of two (2) years, it should
a. accept both c. accept project A and reject B
b. reject both d. reject project A and accept B

Porky, Inc. bought a piece of machinery with the following data:

Useful life 6 years

Yearly net cash inflow P45,000
Salvage value –0–
Internal rate of return 18%
Cost of capital 14%

40. The initial cost of the machinery was

a. P157,392.
b. P165,812.
c. P174,992.
d. Impossible to determine from the information given.

41. LBC Shipment Co. is considering the purchase of a new ocean-going vessel that could potentially
reduce labor costs of its operation by a considerable margin. The new ship would cost P500,000
and would be fully depreciated by the straight-line method over ten years. At the end of ten

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 years, the ship will have no value and will be sunk in some already polluted harbor. The LBC
Shipment Co.’s cost of capital is 12%, and its marginal tax rate is 40%. What is the present value
of the depreciation tax benefit of the new ship? (Note: Round to the nearest peso.)
a. P113,004 c. P200,000
b. P169,506 d. P282,510

42. Adidas Co. is considering the purchase of a new ocean-going vessel that could potentially reduce
labor costs of its operation by a considerable margin. The new ship would cost P500,000 and
would be fully depreciated by the straight-line method over ten years. At the end of ten years,
the ship will have no value and will be sunk in some already polluted harbor. Adidas Co.’s cost
of capital is 12%, and its marginal tax rate is 40%. If the ship produces equal annual labor cost
savings over its ten-year life, how much do the annual savings in labor costs need to be to
generate a net present value of P0 on the project? (Note: Round to the nearest peso.)
a. P68,492 c. P114,154
b. P88,492 d. P147,487

43. Toyota Co. is considering an investment in a machine that would reduce annual labor costs by
P30,000. The machine has an expected life of ten years with no salvage value. The machine
would be depreciated according to the straight-line method over its useful life. Assume the
company pays P250,000 for the machine. What is the expected internal rate of return on the
machine?
a. Less than 1% c. Between 8% and 9%
b. Between 3% and 4% d. Between 17% and 18%

ABD Realty manages five apartment complexes in a three-state area. Summary income
statements for each apartment complex are shown below. Included in the expenses is P1,200,000
of corporate overhead allocated to the apartment complexes based on rental income.

ABD Realty Summary Income Statements

One Two Three Four Five
Rental income P1,000,000 P1,210,000 P2,347,000 P1,878,000 P1,065,000
Expenses 800,000 1,300,000 2,600,000 2,400,000 1,300,000
Profit P 200,000 (P 90,000) (P 253,000) (P 522,000) (P 235,000)

44. What would be the effect in the profit of ABD if apartment complexes Two and Three were sold?
a. increase by P116,880 d. decrease by P116,880
b. increase by P226,120 e. decrease by P226,120
c. increase by P343,000

45. What would be the effect in the profit of ABD if apartment complexes Three and Five were sold?
a. increase by P57,920 d. decrease by P57,920
b. increase by P488,000 e. decrease by P545,920
c. increase by P545,920

46. The apartment complex/es that ABD should consider selling is/are
a. Four only c. Three, Four and Five
b. Four and Five d. Two, Three, Four and Five

Boston Corporation makes two types of motors for use in various products. Operating data and
unit cost information for its products are presented below. Boston has 40,000 productive machine
hours available.

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 Product A Product B
Selling price P100 P80
Variable manufacturing cost 53 45
Fixed manufacturing cost 10 10
Variable selling & administrative 10 11
Fixed selling & administrative 5 4
Fixed other administrative 2 0
Unit operating profit P20 P10
Machine hours per unit 2.0 1.5

47. If the annual unit demand is 10,000 for A and 20,000 for B, What is the maximum total
contribution margin that Boston can generate in the coming year?
a. P333,333 c. P690,000
b. P665,000 d. P740,000

48. If the annual unit demand is 14,000 for A. What is the maximum total contribution margin that
Boston can generate in the coming year?
a. P280,000 c. P400,000
b. P360,000 d. P710,000

49. Fitzpatrick Corporation uses a joint manufacturing process in the production of two products,
Gummo and Xylo. Each batch in the joint manufacturing process yields 5,000 pounds of an
intermediate material, Valdene, at a cost of P20,000. Each batch of Gummo uses 60% of the
Valdene and incurs P10,000 of separate costs. The resulting 3,000 pounds of Gummo sells for P10
per pound. The remaining Valdene is used in the production of Xylo which incurs P12,000 of
separable costs per batch. Each batch of Xylo yields 2,000 pounds and sells for P12 per pound.
Fitzpatrick uses the net realizable value method to allocate the joint material costs. The company
is debating whether or not to process Xylo further into a new product, Zinten, which would incur
an additional P4,000 in costs and sell for P15 per pound. If Zinten is produced, income would
increase by
a. P2,000 per batch produced. c. P14,000 per batch produced.
b. P5,760 per batch produced. d. P26,000 per batch produced.

50. California Company plans to discontinue a product line segment that has a P48, 000 contribution
margin and P96, 000 of fixed costs. Of these fixed costs, P42, 000 cannot be eliminated. What
would be the effect of discontinuance on California’s profit?
a. Increase of P 6, 000 c. Decrease of P 6, 000
b. Increase of P48, 000 d. Decrease of P48, 000

51. Troy Instruments uses ten units of Part Number S1798 each month in the production of scientific
equipment. The unit cost to manufacturing one unit of S1798 is presented below.

Direct materials P 4,000

Materials handling (10% of direct materials cost) 400
Direct manufacturing labor 6,000
Indirect manufacturing (200% of direct labor) 12,000
Total manufacturing cost P22,400

Materials handling represents the direct variable costs of the Receiving Department that are
applied to direct materials and purchased components on the basis of their cost. This is a
separate charge in addition to indirect manufacturing cost. Troy’s annual indirect manufacturing

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 cost budget is one-fourth variable and three-fourths fixed. Duncan Supply, one of Troy’s reliable
vendors, has offered to supply Part Number S1798 at a unit price of P17,000. If Troy purchases
the S1798 units from Duncan, the capacity Troy used to manufacture these parts would be idle.
Should Troy decide to purchase the parts from Duncan, the unit cost of S1798 would
a. increase by P3,600 c. decrease by P3,700
b. increase by P5,300 d. decrease by P5,600

52. Quest Company produces a part that has the following costs per unit
Direct material P8
Direct labor 3
Variable overhead 1
Fixed overhead 5
Total P17

Zest Corporation can provide the part to Quest for P19 per unit. Quest Company has determined
that 60 percent of its fixed overhead would continue if it purchased the part. However, if Quest
no longer produces the part, it can rent that portion of the plant facilities for P60,000 per year.
Quest Company currently produces 10,000 parts per year. Which alternative is preferable and by
what margin?
a. Buy - P10,000 c. Make – P20,000
b. Buy - P40,000 d. Make - P50,000

53. A business received an offer from an exporter for 20,000 units of product at P15 per unit. The
acceptance of the offer will not affect normal production or domestic sales prices. The following
data are available:
Domestic unit sales price P21
Unit manufacturing costs:
Variable 12
Fixed 5

What would be the effect to the profit if the offer is accepted?

a. increased by P60,000 c. decreased by P40,000
b. increased by P300,000 d. decreased by P120,000

54. Motor Company manufactures 10,000 units of Part M-l each year for use in its production. The
following total costs were reported last year:
Direct materials .................................................... P 20,000
Direct labor ........................................................... 55,000
Variable manufacturing overhead..................... 45,000
Fixed manufacturing overhead .......................... 70,000
Total manufacturing cost .................................... P190,000

Valve Company has offered to sell Motor 10,000 units of Part M-l for P18 per unit. If Motor
accepts the offer, some of the facilities presently used to manufacture Part M-l could be rented to
a third party at an annual rental of P15,000. Additionally, P4 per unit of the fixed overhead
applied to Part M-l would be totally eliminated. Should Motor Company accept Valve
Company's offer? Why?
a. Yes, because it would be P10,000 cheaper to buy the part
b. Yes, because it would be P20,000 cheaper to buy the part
c. No, because it would be P5,000 cheaper to make the part
d. No, because it would be P20,000 cheaper to make the part

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 Five years ago, the Broadway Dairy Queen bought a frozen yogurt machine for P80,000.
A salesman has just suggested to the Broadway manager that she replace with a new, P90,000
machine. The manager has gathered the following data:

Old Machine:
• Useful life is 8 years
• Disposal value now is P5,000
• Disposal value after useful life is zero
• Annual operating cost is P37,500

New machine
• Useful life is 3 years
• Disposal value after useful life is zero
• Annual operating cost is P12,500

55. Would you recommend replacing or retaining the old machine?

a. Replace, if the old machine can be disposed with proceeds of more than P15,000.
b. Replace, because for three years, the total operating cost to use the new machine is only
P37,500 compare with using the old machine that would give total operating cost P112,500.
c. Retain, because for three years, the total relevant cost to use the old machine is only P142,500
d. Retain, because for three years, the total relevant cost to use the new machine is only
P152,500

56. Judy Corporation operates two stores: J and V. The following information relates to store J

Sales revenue 920,000

Variable operating expenses 400,000
Fixed expenses:
Traceable to A and controllable by A 225,000
Traceable to A and controllable by others 100,000

The amount of profit that would be used to evaluate the segment officer is
a. P195,000 c. P420,000
b. P295,000 d. P520,000

57. The following data relate to Department B of Reverente Corporation:

Segment contribution margin 750,000

Profit margin controllable by the segment manager 420,000
Segment profit margin 160,000

On the basis of this information, fixed costs traceable to Department B but controllable by
others are
a. P170,000 c. P330,000
b. P260,000 d. P590,000

PUP Trading operates a retail store in Mabini, Hasmin, and CEA. PUP’s corporate headquarters
is located in Sta. Mesa, and the company uses responsibility accounting to evaluate performance.
The following information relates to the Mabini facility:

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 • The store sold 100,000 units at P20.00 each, after having purchased the units from various
suppliers for P13. Mabini salespeople are paid a 12% commission based on gross sales pesos.
• Mabini’s sales manager oversees the placement of local advertising contracts, which totaled
P88,000 for the year. Local property taxes amounted to P15,000.
• The sales manager’s P95,000 salary is set by Mabini’s store manager. In contrast, the store
manager’s P120,000 salary is determined by PUP’s vice president.
• Mabini incurred P20,000 of other noncontrollable costs along with P10,000 of income tax
expense.
• Nontraceable (common) corporate overhead totaled P68,000.

58. The segment contribution margin is

a. P340,000 c. P580,000
b. P460,000 d. P700,000

59. The income that will be used to evaluate Mabini facility

a. P54,000 c. P242,000
b. P122,000 d. P362,000

60. The controllable margin is

a. P157,000 c. P397,000
b. P277,000 d. P517,000

The following data from Division A of Bagets Inc were gathered:

Budget at Actual at
Costs
5,000 units 4,600 units
Sales P 500,000.00 P 470,000.00
Variable COGS 190,000.00 187,000.00
Fixed Manufacturing Cost 48,000.00 46,500.00
Variable Selling 34,000.00 30,000.00
Fixed Admin 25,000.00 22,000.00
Fixed Selling 56,000.00 53,000.00
Net Income P 147,000.00 P 131,500.00

61. If the performance report is prepared, it can be seen that Division A is

a. P3,740 below expectation c. P15,000 above expectation
b. P6,580 above expectation d. P15,500 below expectation

62. The net income that would be shown on the flexible budget at 4,000 units is
a. P91,800 c. P135,240
b. P117,600 d. P147,000

63. Division A of a company is currently operating at 50% capacity. It produces a single product and
sells all its production to outside customers for P13 per unit. Variable costs are P7 per unit, and
fixed costs are P6 per unit at the current production level. Division B, which currently purchases
this product from an outside supplier for P12 per unit, would like to purchase the product from
Division A. Division A will operate at 80% capacity to meet the outside customer’s and Division
B’s demand. What is the minimum price that Division A should charge Division B for this
product?

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 a. P10.40 per unit c. P13 per unit
b. P12 per unit d. P7 per unit

64. The AAA Division of a company, which is only operating at 80% of capacity, produces and sells
1,000 units of a certain electronic component in a perfectly competitive market. Sales, variable
costs, and fixed costs are P50,000, P34,000, and P12,000, respectively. What is the minimum
transfer price that should be charged to BBB for each component if BBB would order for 400 units
and P2 per unit of shipping cost shall be saved?
a. P32 c. P38
b. P34 d. P40

65. Jenner Company developed its annual manufacturing overhead budget for its master budget for
2016 as follows:

Expected annual operating capacity 120,000 Direct Labor Hours

Variable overhead costs:
Indirect labor P420,000.00
Indirect materials 90,000.00
Factory supplies 30,000.00
Total variable P540,000.00
Fixed overhead costs:
Depreciation P180,000.00
Supervision 120,000.00
Property taxes 96,000.00
Total fixed P396,000.00
Total costs P936,000.00

Which of the following is correct?

a. Flexible budget for a monthly activity level of 8,000 is P36,000
b. Flexible budget for a monthly activity level of 9,000 is P73,500
c. Flexible budget for a monthly activity level of 8,000 is P432,000
d. Flexible budget for a monthly activity level of 9,000 is P432,000

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