Midterm Quiz 2 - Attempt Review

11/3/22, 5:35 PM Midterm Quiz 2: Attempt review
Started on Monday, 17 October 2022, 4:25 PM

State Finished
Completed on Monday, 17 October 2022, 4:37 PM
Time taken 11 mins 52 secs
Marks 20.00/20.00
Grade 100.00 out of 100.00
semestral.amaes.com/2212/mod/quiz/review.php?attempt=125981&cmid=16741 1/18
Question 1
Complete
Mark 1.00 out of 1.00
Great Electronics, Inc. is operating at 70%

capacity. The plant manager is considering making component 501 now being
purchased for P110
each, a price that is projected to increase in the near
future. The plant has the equipment and labor force required to manufacture the
component. The design engineer estimates that each component requires P40 of
direct materials and P30 of direct labor. The plant overhead is
200% of direct
labor peso cost and 40% of the overhead is fixed cost. A decision to
manufacture component 501 will result to a gain or (loss)
for each component of
Select one:
a. P16
b. P4
c. P(20)
d.
P28

Question 2
Complete
Fortress Co. has a residual profit of P1.8

million. If the imputed interest rate is 16%, what is the return on investment?
Select one:
a.
5%

b. Not listed
c.
15%

d. 10%
Question 3
Complete
Woody Corporation, which manufactures slippers,

has enough idle capacity available to accept one-time only special order of
20,000 pairs of
slippers at P6 a pair. The normal selling price is P10 a pair.
Variable manufacturing costs are P4.50 a pair, and fixed manufacturing costs
are
P1.50 a pair. Woody will not incur any marketing costs as a result of the
special order. What would be the effect on operating profit if the
special
order would be accepted without affecting normal sales?
Select one:
a. P90,000
increase
b.
P120,000
increase

c. P30,000 increase
d. P0
Question 4
Complete
In a responsibility accounting, a center’s

performance is measured by controllable costs. Controllable costs are best
described as including
Select one:
a.
Incremental
and fixed costs

b. Only those costs that the manager can influence in the current
time period
c.
Differential
costs

d. Only
discretionary costs
Question 5
Complete
In a decision-making case, which of the following costs is not likely to contain a relevant cost component?
Select one:
a. Labor cost
b. Selling cost
c. Depreciation cost of an existing asset
d. Factory overhead cost
Question 6
Complete
The basic purpose of a responsibility accounting

system is
Select one:
a.
Authority

b. Motivation
c.
Variance
analysis

d. Budgeting
Question 7
Complete
In a make or buy decision analysis, the cost to buy is compared with the
Select one:
a. Relevant cost to make
b. Variable manufacturing costs
c. Cost to purchase
d. Total cost to make
Question 8
Complete
Union Company manufactures plugs used in its

electrical gadgets at a cost of P108 per unit that includes P24 of fixed
overhead. It needs 30,000
of these plugs yearly, and Divisive Corp. offers to
sell these items to Union at P99 per unit. If Union decides to purchase the
plugs, P180,000 of
the annual fixed overhead applied will be eliminated, and
the company may be able to rent the facility previously used for manufacturing
the
plugs. If Union purchases the plugs but does not rent the unused facility,
the company would
Select one:
a. Lose
P18.00 per unit
b.
Save
P9.00 per unit

c. Lose P9.00 per unit
d. Save
P6.00 per unit
Question 9
Complete
Division A of Division Experts Corporation is

being evaluated for elimination. It has contribution to overhead of P400,000.
It receives an
allocated overhead of P1 million, 10% of which cannot be
eliminated. The elimination of Division A would affect pre-tax income by
Select one:
a. P400,000
increase

b. P500,000
increase
c.
P500,000 decrease

d. P400,000
decrease
Question 10
Complete
Which of the following must be considered in determining the relevance of a particular cost to a decision?
Select one:
a. Amount of cost
b. Riskiness of the decision
c. Potential effect of the cost on the decision
d. Verifiability and accuracy of the cost
Question 11
Complete
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 cost is 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 outside customers and Division B’s demand. What is the
minimum price that Division A should charge Division B for this
product?
Select one:
a. P7.00 per unit
b.
P13.00
per unit

c. P12.00
per unit
d.
P10.40
per unit

Question 12
Complete
The performance of an investment center should be evaluated based on
Select one:
a. Residual value of investment
b. Average investment
c. Return on investment
d. Amount of investment
Question 13
Complete
In determining whether to manufacture a part or

buy it from an outside vendor, a cost that is irrelevant to the short-run
decision is
Select one:
a.
Direct
labor

b. Fixed overhead that will continue even if the part is bought from an
outside vendor
c.
Variable
overhead

d. Fixed
overhead that will be avoided if the part is bought from an outside vendor
Question 14
Complete
In a make or buy decision analysis, which of the following qualitative factors is/are usually considered?
Select one:
a. Skilled labor
b. All of the above
c. Special technology
d. Assurance of quality control
Question 15
Complete
Responsibility accounting works best in decentralized firms where the organization is structured into responsibility centers. A responsibility
center that is most like an independent business is called a
Select one:
a. Investment center
b. Profit center
c. Revenue center
d. Cost center
Question 16
Complete
In a decision-making case, which of the following costs is generally not relevant to the decision?
Select one:
a. Differential cost
b. Opportunity cost
c. Avoidable cost
d. Historical cost
Question 17
Complete
It relates accounting to the budgetary system, thus acting as a control device. Management reports give details of budgeted and actual
performances and show responsibilities at all levels of Management.
Select one:
a. Accounting system
b. Programming
c. Responsibility accounting
d. Budgeting
Question 18
Complete
Which of the following formulas best describes the return on investment calculation?
Select one:
a. Sales ÷ Total assets
b. Sales × Profit ratio
c. Net income ÷ Sales
d. Return on sales × Assets turnover
Question 19
Complete
The format for internal reports in a responsibility accounting system is prescribed by
Select one:
a. Generally Accepted Accounting Principles
b. The Philippine Institute of Certified Public Accountants
c. The Board of Accountancy
d. Management
Question 20
Complete
It is the name given to a unit or a function of

an organization that is headed by a manager who has direct responsibility for
its performance.
Select one:
a.
Business
entity

b. Cost
unit
c.
Responsibility center

d. Budget
center

Midterm Quiz 2 - Attempt Review

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11/3/22, 5:35 PM Midterm Quiz 2: Attempt review

Started on Monday, 17 October 2022, 4:25 PM

Mark 1.00 out of 1.00

Great Electronics, Inc. is operating at 70%

Mark 1.00 out of 1.00

Fortress Co. has a residual profit of P1.8

Mark 1.00 out of 1.00

Woody Corporation, which manufactures slippers,

Mark 1.00 out of 1.00

In a responsibility accounting, a center’s

Mark 1.00 out of 1.00

c. Depreciation cost of an existing asset

d. Factory overhead cost

Mark 1.00 out of 1.00

The basic purpose of a responsibility accounting

Mark 1.00 out of 1.00

b. Variable manufacturing costs

d. Total cost to make

Mark 1.00 out of 1.00

Union Company manufactures plugs used in its

c. Lose P9.00 per unit

Mark 1.00 out of 1.00

Division A of Division Experts Corporation is

Mark 1.00 out of 1.00

b. Riskiness of the decision

c. Potential effect of the cost on the decision

d. Verifiability and accuracy of the cost

Mark 1.00 out of 1.00

Division A of a company is currently operating

Mark 1.00 out of 1.00

The performance of an investment center should be evaluated based on

Mark 1.00 out of 1.00

In determining whether to manufacture a part or

Mark 1.00 out of 1.00

b. All of the above

d. Assurance of quality control

Mark 1.00 out of 1.00

Mark 1.00 out of 1.00

Mark 1.00 out of 1.00

Mark 1.00 out of 1.00

b. Sales × Profit ratio

c. Net income ÷ Sales

d. Return on sales × Assets turnover

Mark 1.00 out of 1.00

The format for internal reports in a responsibility accounting system is prescribed by

b. The Philippine Institute of Certified Public Accountants

c. The Board of Accountancy

Mark 1.00 out of 1.00

It is the name given to a unit or a function of

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