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3. A cost driver
a. causes fixed costs to rise because of production changes
b. has a direct cause-effect relationship to a cost
c. can predict the cost behavior of a variable, but not a fixed, cost
d. is an overhead cost that causes distribution costs to change
in distinct increments with changes in production volume
6. A local JPIA chapter wants to rent a half for P3,000 a day to hold
a Bingo fund raiser. Every session of bingo requires a caller for
P200. There are supplies that are needed that cost P3 per
person playing bingo. On average each bingo player spends
P20 and 1,000 people attend each session. P10,000 in prizes
are awarded each session. Total cost for 1 session can be
classified as:
Fixed Costs-Variable Costs FixedCosts-Variable
Costs
a. P 13,200-P 3 c. P 3,000-P 13,200
b. P 13,200-P 3,000 d. P 10,000-P 3,200
10. Using the high-low method, which one of the following is correct.
application
a. Variable costs is P 15 per unit c. Fixed costs is
P 1,250 per month
b. Variable costs is P 10 per unit d. Fixed costs is
P 1,000 per month
22. A beverage stand can sell either softdrinks or coffee on any given
day. If the stand sells softdrinks and the weather is hot; it will
make P2,500; if the weather is cold, the profit will be P1,000. If
the stand sells coffee and the weather is hot, it will make P1,900;
if the weather is cold, the profit will be P2,000. The probability of
cold weather on a given day at this time is 60%. The expected
payoff if the vendor has perfect information is:
a. P3,900 b. P1,360 c. P2,200 d. P1,960
23. Soft Inc. has a target total labor cost of P 3,600 for the first four
batches of a product. Labor is paid P10 an hour. If Soft expects
an 80% learning curve, how many hours should the first batch
take?
a. 360 hours b. 140.63 hours c. 57.6 hours
d. 230.4 hours
42. Refer to # 16; what would be the total annual carrying costs
assuming the carrying cost per unit is P8.40?
a. P 42,000 b. P 25,200 c. P 4,200 d. P
46,200
45. If a firm is given a trade credit terms of 2/10, net 30, then the cost
to the firm failing to take the discounts and pay instead its
obligation at the end of the maturity date is:
a. 2% b. 30% c. 36.7%
d. 10%
A. Is a cash inflow.
B. Is a cost of operations that cannot be avoided.
C. Reduces the cash outlay for income taxes.
D. Represents the initial cash outflow spread over the life of the
investment.
a. P27,000 inflow
b. P18,000 outflow
c. P45,000 outflow
d. P12,000 inflow
a. The lives of the multiple projects are equal and the size of the
required investments is equal.
b. The required rate of return equals the IRR of each project.
c. The required rate of return is higher than the IRR of each
project.
d. Multiple projects have unequal lives and the size of the
investment for each project is different.
52. All of the following items are included in discounted cash flow analysis
except
a. P534,000
b. P518,000
c. P544,000
d. P498,000
A. Excluded...Included...Excluded
C. Included...Excluded...Included
B. Excluded...Excluded...Included
D. Included...Included...Included
56. What is the study of the need for activities and whether they are
operating efficiently called?
a. Direct and indirect cost management
b. Activity-based management
c. Variable and fixed cost management
d. Total quality management
60. Sales for the coming year are expected to exceed last years by
1,000 units. if this occurs, Elvin’s sales volume in the coming year
will be:
c. 22,600 units b. 21,960 units c. 23,400 units d.
21,000 units
61. If Elvin wishes to earn P22,500 in net operating income for the
coming year, the company’s sales volume in pesos must be:
d. 217,750 b. P257,625 c. P207,000
d. P229,500
62. The selling price needed next year to maintain the same
contribution margin ratio as last year is:
e. P9.00 b. P8.25 c. P10.00 d.
P9.75
66. Shown below is the sales forecast for C Inc., for the first four
months of the coming year:
Jan Feb Mar Apr
Cash Sales P15,000 P 24,000 P 18,000 P 14,000
Credit Sales 100,000 120,000 90,000 70,000
On average, 50% of credit sales are paid for in the month of the
sale, 30% in the month following sale, and the remainder is paid
two months after the month of the sale. Assuming there are no bad
debts, the expected cash inflow in March is:
l. P138,000 b. P122,000 c. P119,000
d. P108,000
68. P Company budgets on an annual basis for its fiscal year. The
following beginning and ending inventory levels (in units) are
planned for the next year:
Beginning Ending
Raw Materials 40,000 50,000
Finished goods 80,000 50,000
69. B Company is preparing its budget for 2006. For 2005, the
following were reported:
Selling prices will increase by 10% and sales volume in units will
decrease by 5%. The cost of goods sold as a percent of sales will
increase to 62%. Other than depreciation, all operating costs are
variable. B will budget a net income for 2006 of
a. P167,100 b. P167,500
c. P168,000 d. P176,000
78. The fixed overhead applied in F’s production for the year is
a. P484,200 b. P575,000 c. P594,000
d. P800,000
86. F Caterers quotes price of P60 per person for a dinner party. This
price includes the 6% sales tax and the 15% service charge. Sales
tax is computed on the food plus service charge. The service charge
is computed on the food only. At what amount does F Caterers price
the food?
a. P55.40 b. P50.00 c.P47.40
d. P49.22
91. The cost to repair a unit of product that fails after it is sold is
a(n)
a. appraisal cost.
b. external failure cost.
c. internal failure cost.
d. prevention cost.
95. If the present value of the future cash flows for an investment
equals the required investment, the IRR is
a. equal to the cutoff rate.
b. equal to the cost of borrowed capital.
c. equal to zero.
d. lower than the company's cutoff rate of return.
Planned Actual
------- -------
Sales $80,000 $78,900
Variable costs 50,000 48,500
------- -------
Contribution margin $30,000 $30,400
======= =======
Planned sales were 10,000 units; actual sales were 9,700 units.
The sales price variance is
a. $1,100 U.
b. $1,000 F.
c. $900 U.
d. $400 F.
100. Alcatraz Division of XYZ Corp. sells 80,000 units of part X to the
outside market. Part X sells for $40, has a variable cost of $22,
and a fixed cost per unit of $10. Alcatraz has a capacity to
produce 100,000 units per period. Capone Division currently
purchases 10,000 units of part X from Alcatraz for $40. Capone
has been approached by an outside supplier willing to supply
the parts for $36. What is the effect on XYZ's overall profit if
Alcatraz REFUSES the outside price and Capone decides to
buy outside?
a. no change
b. $140,000 decrease in XYZ profits
c. $80,000 decrease in XYZ profits
d. $40,000 increase in XYZ profits
104. Variable costing and absorption costing will show the same
incomes when there are no
a. beginning inventories.
b. ending inventories.
c. variable costs.
d. beginning and ending inventories.
a. $230,000.
b. $299,000.
c. $506,000.
d. $529,000.