Managerial Accounting (MBA 209)

ANSWER SHEET

EXAMINEE CODE: DATE:

PROGRAM :
SUBJECT :

Instructions: Please write your answers after each question provided herein the answer sheet.
Your answers will be evaluated using the following criteria: content - 30%, organization - 20%,
analysis - 30% and use of language - 20%, total = 100%.

I. THEORY: Discussion (20 points - BONUS)

You are an MBA student taking up Managerial Accounting subject. You are
analyzing your costs and expenses in taking up this program. Identify at least two
examples of each of the following cost related in your taking up of the MBA program:

a. Direct cost e. Indirect cost i. Sunk cost

b. Common cost f. Controllable cost J. Mixed cost
c. Variable cost g. Fixed cost
d. Opportunity cost h. Avoidable cost

II. C-V-P Analysis: Single Product (40 points)

. The following information pertains to Etivac Company regarding its only product:

Selling price P 20.00/unit

Variable cost 12.00/unit
Total Fixed cost 60,000.00

a. Compute the contribution margin per unit

b. Compute the contribution margin ratio
c. Construct the company’s contribution approach income statement assuming that
it was able to sell 10,000 units.
d. Compute the company’s breakeven point in units
e. Compute the company’s breakeven point in pesos.
f. How many units does the company needed to sell if it wants to earn a profit of
P 20,000?

III. Special Order (10 points)

1
 Laguna Mftg Co. produces a product, "Print" and sells them to Metro Manila. The
following

information thereon is given:

Sales volume/yr 35,000 units

Practical capacity 50,000 units

Unit selling price P 50.00

Direct materials 12.00

Direct labor 6.00

Variable factory overhead 9.00

Fixed factory overhead per annum 100,000

Variable operating expenses/unit 5.00

Fixed operating expenses per annum 50,000

An order for 5,000 units have been received from Cebu City at P 46.00.

1. What is the total incremental income or (loss)?

2. What should be the decision of Laguna Mftg, accept or reject the offer? Explain
your answer.

IV. Understanding Budgets (35 points)

A. The Bohol Corp. is finalizing its financial plans for 2017 based on the following:

Desired inventory, Dec.31, 2017 3,000 units

Planned level of sales 60,000 units @ P 4.60

Merchandise inventory, Jan 1, 2017 5,000 units @ P 2.80

Estimated purchase cost in 2017 P 3.00

Variable operating expenses per unit P 1.00

Fixed operating expenses per annum P 25,000

Compute the
ff:

1. Budgeted purchases
 2. Budgeted cost of sales

3. Budgeted operating expenses

4. Budgeted net income, assuming interest expense is P 2,100 and income tax rate is
35%

B. Subic Corp. has the following information for its cash budget for 2017:

Sale of land (cost, P40,000) P 75,000

Acquisition of equipment 85,000

Annual amortization on loan, excluding interest 80,000

Collections on sales 450,000

Payments for purchases 280,000

Payments for operating expenses 80,000

Payments for income taxes 18,000

Dividends to be paid 15,000

Payments for interest on existing loans 9,000

Cash balance, January 1, 2017 42,000

Desired cash balance, December 31 20,000

In case of cash deficiency, the company can obtain one-year 16% loans on multiples of
P5,000.

Compute for the following:

5. Budgeted cash receipts

6. Budgeted cash payments

7. Budgeted ending cash balance