QUEZON CITY UNIVERSITY

FINAL EXAMINATION
2nd Sem A.Y. 2020-2021
SBAC 3B

Name: ____________________________________ Section________ Date______

A. FPJ Company has budgeted the following unit sales:

2009 Units
January 10,000
February 8,000
March 9,000
April 11,000
May 15,000
The finished goods units on hand on December 31, 2008, were 1,000 units. Each
unit requires 2 pounds of raw materials that are estimated to cost an average of P4
per pound. It is the company's policy to maintain a finished goods inventory at the
end of each month equal to 10% of next month's anticipated sales. They also have
a policy of maintaining a raw materials inventory at the end of each month equal to
20% of the pounds needed for the following month's production. There were 3,920
pounds of raw materials on hand at December 31, 2008.

Instructions
For the first quarter of 2009, prepare (1) a production budget and (2) a direct
materials budget.

B. Marikina, Inc. manufactures three models of picture frames for a total of 5,000
frames per year. The unit cost to produce a metal frame follows:

Direct materials $ 6
Direct labor 7
Variable overhead 2
Fixed overhead (70% unavoidable) 5
Total $20
A local company has offered to supply Marikina the 5,000 metal frames it needs
for $16 each.

Instructions
Create an incremental analysis for the make-or-buy decision.

C. L & M Furniture currently manufactures rocking chairs as its main product.

Each chair uses one seat cushion and one back cushion with the following costs per
set of cushions (one seat and one back):

Direct materials $ 1
Direct labor 10
Variable overhead 5
Fixed overhead 8
Total $24

Shepherd Company has contacted L & M with an offer to sell it 5,000 sets of
cushions for $18 each. If L & M makes the cushions, $5 of the fixed overhead per
unit will be allocated to other products.

Instructions
Should L & M make or buy the cushions?

D. Revelation store has credit sales of P 750,000. Given the following ratios, fill in
the statement of financial position below:

Total Assets Turnover 2.5 times

Cash to Total Assets 2.0 percent
Accounts Receivable Turnover 10.0 times
Inventory Turnover 15.0 times
Current Ratio 2.0 times
Debt to Total Assets 45.0 percent
 Revelation Store
Statement of financial position
December 31, 2018

ASSETS LIABILITIES & OWNER’S EQUITY

Cash ________________ Current Debt _____________

Accounts receivable ________________ Long-term Debt _____________

Inventory ________________ Total Debt _____________

Total Current Assets ________________ Net Worth _____________

Fixed Assets ________________ Total liabilities &

Total Assets ________________ Owner’s Equity _____________

“ GOODLUCK ‘