ACCOUNTING REVIEW WORKSHOP

QUIZIGNMENT #1
Instruction: First, on a one-fourth sheet of paper, write ONLY THE LETTER (or answer if there are no
choices) of the correct answer for each of the corresponding questions. On a separate one-whole
sheet/s of paper (yellow pad may do), write your solutions for each of the questions. No solution means
your answer will not be credited. For any inquiries, you can text (09177309202) or chat me through
facebook messenger (ALIEDDINE HABBI).

MANAGEMENT ADVISORY SERVICES

COST-VOLUME-PROFIT ANALYSIS

PROBLEM 1. AJ Corporation wants to know the breakeven sales on their company. Presented below is
the results of the operations of the firm for the whole year:

Sales (200,000 units) P 1,000,000

Manufacturing Cost of Goods Sold

Fixed P 200,000
Variable P 400,000 (P 600,000)

Selling and Administrative

Fixed P 49,750
Variable P 60,000 (P109,750)

Profit P 290,250

REQUIRED:

1. What is the selling price of Won’s product?

a. 4.7 b. 5 c. 6 d. 5.5
2. What is the variable cost per unit of Won’s product?
a. 3 b. 2 c. 2.3 d. 3.5
3. What is its contribution margin per unit?
a. 3 b. 2.7 c. 2.3 d. 1.7
4. What is the contribution margin ratio?
a. 0.54 b. 0.57 c. 0.46 d. 0.45
5. What is the breakeven point in units?
a. 83,250 b. 92,500 c. 108, 587 d. 146,912
6. What is the breakeven point is pesos?
a. 462,500 b. 438,158 c. 542,935 d. 555,000

PROBLEM 2. Basic Illustration Corp. produces and sells a single product. The selling price is P25 and the
variable costs is P15 per unit. The corporation’s fixed costs is P100,000 per month. Average monthly
sales is 11,000 units.
REQUIRED:

1. Contribution margin per unit.

2. Contribution margin ratio.
3. Variable cost ratio.
4. Breakeven point in units.
5. Breakeven point is pesos.
6. Target sales if desired profit is P2.00 per unit
a. in units
b. in pesos
7. Target sales if desired after-tax profit is 21,000 (tax rate is 30%)
a. in units
b. in pesos
8. Target sales if desired profit is 8% of sales
a. in units
b. in pesos
9. Margin of safety
a. in units
b. in pesos
c. ratio
10. Degree of Operating Leverage
11. If the company wants to increase sales by 10%, what is its effect on the profit?

STANDARD COSTING
PROBLEM 1. CC has the following cost data in its production:
Standard Cost per hour, P2.00
Standard hours per unit, 3 hours
Actual units, 10,000 units
Actual hours, 28,000 hrs.
Actual Cost per hour, P1.50
Budgeted units, 9,500 units
REQUIRED:
1. What is the standard hours?
a. 30,000 b. 20,000 c. 15,000 d. 28,500
2. What is the budgeted hours?
a. 28,500 b. 30,000 c. 20,000 d. 17,000
3. What is the budgeted cost?
a. 57,000 b. 60,000 c. 35,000 d. 28,500
4. What is the actual cost?
a. 42,000 b. 56,000 c. 57,000 d. 35,000
5. What is the standard cost?
a. 80,000 b. 60,000 c. 56,000 d. 57,000
PROBLEM 2. Consider the following data:
Cost standards for product no. C77:
Direct material 3 pounds at P2.50 per pound P 7.50
Direct labor 5 hours at P7.50 per hour 37.50
Actual results:
Units produced 7,800 units
Direct material used 23,100 pounds at P2.70 62,370
Direct labor 40,100 hours at P7.30 292,730
REQUIRED:
(U = unfavorable ; F = favorable)
1. What is the direct material price variance?
a. 4,620 U b. 4,620 F c. 4,520 U d. 4,520 F
2. What is the direct material quantity variance?
a. 750 F b. 230 U c. 4,620 U d. 8,250 U
3. What is the total direct material variance?
a. 3,870 U b. 3,870 F c. 4,620 F d. 8,200 F
4. What is the labor rate variance?
a. 8,020 F b. 8,020 U c. 8,200 F d. 8,200 U
5. What is the labor efficiency variance?
a. 8,250 U b. 8,250 F c. 8,020 U d. 8,020 F
6. What is the total direct labor variance?
a. 230 U b. 230 F c. 220 F d. 220 U