MIDTERM EXAM AFAR1 (AY 2021-

2022)
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*Choose the best answer for multiple choice questions.

*Supply the final answers for straight problems.
A. Omit descriptions and other symbols (comma, peso sign, percent, etc.) on final answers.
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B. Guidelines on Rounding of Final Answers
GENERALLY, round-off final answers to TWO DECIMAL PLACES.
However, For proportions, number of times and peso amounts (absolute numbers).
*Upload screenshots of your solutions (Separate assignment)
Points:
44/100
Correct
3/3 Points
1
The following information was taken from ABC Company's accounting records for
the year ended December 31, 2021. There was no work in process inventory at
the beginning or end of the year. ABC's 2021 cost of goods sold is:

Correct
3/3 Points
2
ITEMS 2-3: are based on the following information pertaining to BCD Co.'s
manufacturing operations:
For the month of March 2021, conversion cost was

Correct
3/3 Points
3
For the month of March 2021, cost of goods manufactured was
Correct
2/2 Points
4
Costs are accumulated by responsibility center for control purposes when using
JOB ORDER COSTING: Yes     PROCESS COSTING: Yes
JOB ORDER COSTING: Yes     PROCESS COSTING: No
JOB ORDER COSTING: No     PROCESS COSTING: No
JOB ORDER COSTING: No     PROCESS COSTING: Yes
Incorrect
0/3 Points
5
JKL produces summer wear. The management prepares a budget and provide the
following information:
Production output 25,000 units; Direct material cost P50,000; Direct labor cost
(2,000hours at P10 per hour); Factory overhead P2 per outfit plus P40,000 a
month; Selling expenses P1 per outfit plus P50,000 a month. Under full costing
how much is the total unit cost of the product?

Correct answers:
6.4
Correct
2/2 Points
6
The most likely strategy to reduce the breakeven point, would be to 
Increase both the fixed costs and the contribution margin.
Decrease both the fixed costs and the contribution margin.
Decrease the fixed costs and increase the contribution margin.
Increase the fixed costs and decrease the contribution margin.
Correct
3/3 Points
7
During 2020, TWX Lab supplied with a comprehensive diagnostic kit for P120. At
a volume of 80,000 kits, TWX  had fixed costs of P1,000,000 and a profit before
income taxes of P200,000. Due to an adverse legal decision, TWX's 2021 liability
insurance increased by P1,200,000 over 2020. Assuming the volume and other
costs are unchanged, what should the 2021 price be if TWX is to make the same
P200,000 profit before income taxes? 
Correct
3/3 Points
8
In its first year of operations, MJK Manufacturers had the following costs when it
produced 100,000 and sold 80,000 units of its only product:
How much lower would MJK's net income be if it used variable costing instead of
full absorption costing?

Correct
2/2 Points
9
A manufacturing company prepares income statements using both absorption
and variable costing methods. At the end of a period actual sales revenues, total
gross profit and total contribution margin approximated budgeted figures,
whereas net income was substantially greater than the budgeted amount. There
were no beginning or ending inventories. The most likely explanation of the net
income increase is that, compared to budget, actual
Manufacturing fixed costs had increased.
Selling and administrative fixed expenses had decreased.
Sales prices and variable costs had increased proportionately.
Sales prices had declined proportionately less than variable costs.
Correct
2/2 Points
10
Which measures would be useful in evaluating the performance of a
manufacturing system?

I. Throughput time.
II. Total setup time for machines/Total production time.
III. Number of rework units/Total number of units completed.
I and II only.
II and III only.
I and III only.
I,II and III.
Correct
3/3 Points
 11
CFF Caterers quotes a 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 the service charge. The service charge is computed on the food
only. At what amount does CFF price the food?(round off your answer to two
decimal places)

Correct
2/2 Points
12
Which changes in costs are most conducive to switching from a traditional
inventory ordering system to a just-in-time ordering system?
COST PER PURCHASE ORDER: Increasing     INVENTORY UNIT CARRYING COSTS: Increasing
COST PER PURCHASE ORDER: Decreasing     INVENTORY UNIT CARRYING COSTS: Increasing
COST PER PURCHASE ORDER: Decreasing     INVENTORY UNIT CARRYING COSTS: Decreasing
COST PER PURCHASE ORDER: Increasing     INVENTORY UNIT CARRYING COSTS: Decreasing
Correct
2/2 Points
13
To determine the inventory reorder point, calculations normally include the
Ordering cost
Carrying cost
Average daily usage
Economic order quantity
Correct
2/2 Points
14
As a consequence of finding a more dependable supplier,DEE Co. reduced its
safety stock of raw materials by 80% What is the effect of this safety stock
reduction on Dee's economic order quantity?
80% decrease.
64% decrease.
20% increase.
No effect.
Correct
2/2 Points
15
KLM Company has three sustaining engineers, each of whom is paid P50,000 per
year and is able to process 2,500 change orders. Last year, 6,000 change orders
were processed by the three engineers.

Calculate the activity rate per change order.

Incorrect
0/2 Points
16
How much is the unused capacity?

Correct answers:
30000
Incorrect
0/3 Points
17
QRS  Company installs computerized patient record systems in hospitals and
medical centers. QRS has noticed that each general type of system is subject to
an 80 percent learning curve. The installation takes a team of professionals to set
up and test the system. Assume that the first installation takes 1,000 hours and
the team of professionals is paid an average of P50 per hour. If QRS is budgeting
labor cost for next year based on the installation of 16 additional system, How
much is the total budgeted labor cost for a team that had previously completed
16 systems the prior year?

Correct answers:
196640
Incorrect
0/3 Points
18
Calculate the budgeted labor cost for a new team that had not completed any
systems to date

Correct answers:
327680
Incorrect
0/3 Points
19
TSS Company is noted for its full line of quality lamps. The company operates one
of its plants in TARLAC. That plant produces two types of lamps: classical and
modern. JD,the president of the company, recently decided to change from a
unit-based, traditional costing system to an activity-based costinf system. Before
making the change companywide, she wanted to assess the effect on th product
cost of the TARLAC plant. This plant was chosen because it produces only two
types of lamps; most other plants produce at least a dozen.
   To asses the effect of the change, the following data have been gathered (for
simplicity, assume one process):
 

Under the current system, the costs of operating equipment, materials handling
and set-ups are assigned to the lamps on the basis of machine hours. Lamps are
produced and moved in batches. How much is the difference in total unit cost of
classical lamp between traditional and ABC costing system ?

Correct answers:
0.25
Correct
3/3 Points
20
How much is the difference in total unit cost between ABC and traditional costing
of modern lamp ?

Incorrect
0/3 Points
21
In May, BMW Inc.  sold 50 electric fans for P200 each. Costs included materials
costs of P50 per unit, direct labor costs of P30 per unit and factory overhead at
100% of direct labor cost. Interest expense on an 8% bank loan was equivalent to
P2 per unit. Income tax at a 30% rate was equivalent to P15 per unit.
   Effective June 1, materials costs decreased 5% per unit and direct labor costs
increased 20% per unit. Also effective June 1, the interest rate on the bank loan
increased from 8% per annum to 9% per annum.
Assume that the expected June sales volume is 50 units, the same as for May.

How much is the sales per unit that will produce the same gross profit ratio
assuming no changes in the FOH rate in relation to direct labor costs. (round off
your answer to the nearest peso) ex. 20.35  =20

Correct answers:
217
Incorrect
0/3 Points
22
What will be the sales price per unit that will produce the same ratio of gross
profit, assuming that P10.00 of the June Factory Overhead consists of fixed costs
and that the variable factory overhead ratio to direct labor costs is unchanged
from June.(round off your answer to the nearest peso) 

Correct answers:
214
Incorrect
0/5 Points
23
JKL Products, Inc. a small manufacturing company, produces a highly flammable
cleaning fluid. On May 31, 22Y, the company had a fire which completely
destroyed the processing building and the work in process inventory; some of the
equipment was saved. 

After the fire, a physical inventory was taken. The materials were valued at
P30,000 the finished goods at P60,000 and supplies at P5,000.
The sales for the first five months of 22Y were P150,000; materials purchases were
P50,000; freight on purchases was P5,000; direct labor for the first five months
eas P40,000. For the past five years, factory overhead was 50% of direct labor
cost. What is the value of work in process inventory destroyed by fire?

Correct answers:
55000
Correct
1/3 Points
 24
JZZ Inc., had the following inventories on March 1:
Finished goods : P15,000; Work in Process; P19,070; Materials: P14,000; 
The work in process account is supported by these job order cost sheets:
JOB 001 (BALLS) Direct Mat: P2,800; Direct Labor: P2,100; Factory overhead
P1680 
JOB 002 (VEST) Direct Mat: P3,400; Direct Labor: P2,700; Factory overhead P2,160
JOB 003 (VEST) Direct Mat: P1,800; Direct Labor: P1,350; Factory overhead P1,080

The following information pertains to March operations:

(a) Materials purchased and received, P22,000; terms, n/30.

(b) Materials requisitioned for production, P21,000. Of this amount, P2,400 was
for indirect materials; the difference was distributed: P5,300 to Job 001, P7,400 to
Job 002 and P5,900 to Job 003.

(c) Materials returned to the storeroom from the factory, P600 of which P200 was
for indirect materials the balance from Job 002.

(d) Materials returned to vendors P800.

(e) Payroll, after deducting 3.25% for SSS; 1.25% for Medicare; 2% for Pag-ibig
and 12% for employees' income tax, was P30,970. The payroll amount due the
employees was paid during March.

(f) Of the payroll, direct labor represented 55%, indirect labor, 20%; sales salaries,
15%; administrative salaries, 10%. The direct labor cost was distributed: P6,420 to
Job 001; P8,160 to Job 002 and P6,320 to Job 003.

(g) An additional 9.9% was entered for employer payroll taxes, representing the
employer's 5.65% SSS, 1.25% medicare, 1% ECC and 2% Pag-ibig contributions.
Employer payroll taxes related to direct labor are charged to the factory overhead
control account.

(h) Factory overhead, other than any previously mentioned, amounted to P5,500.
Included in this figure were P2,000 for depreciation of the factory building and
equipment and P250 for expired insurance on the factory. The remaining
overhead, P3,250, was unpaid at the end of March.

(i) Factory overhead applied to production: 80% of the direct labor to be charged
to the three jobs based on the labor cost for March.

(j) Jobs 001 and 002 were completed and transferred to the finished goods
warehouse.

(k) Both Jobs 001 ans 002 were shipped and billed at a gross profit of 40% of the
cost of goods sold.

(l) Cash collections from accounts recievable during March were P69,450.

How much is the cost of goods manufactured?

Feedback:
no soln
Correct
3/3 Points
25
How much is the material inventory end?

Incorrect
0/3 Points
26
 How much is the factory overhead variance? state whether FV or UF .. ex 3000UF

Correct answers:
1401.5UF
Correct
3/3 Points
27
How much is the cost of work in process end?

Incorrect
0/2 Points
 28
JMB , a factory worker in one of the factories in Tarlac Province . her daily rate
was P600, What will be her earnings for the day is she render 12 hours service on
a regular day.

Correct answers:
975
Incorrect
0/2 Points
29
Assuming its a labor day, and it is her rest day at thesame time

Correct answers:
2574
Incorrect
0/2 Points
30
The H&M Clothing Company produces several lines of women's fashions and has
exceptional success in selling its products to leading department store across the
country. H&M employees 20 production workers and pays them P2 per hour for
an eight-hour workday.

Since customer demand during the week ending May 17 was considerably
greater than the workers' average production, the production manager decided
to ask all production workers to work two hours overtime at 150% of regular
wages on the evening of May 17 in order to catch up with the backing in
customers' orders.

On May 27 a salesman called in a rush order for 280 dresses which needed to be
ready for delivery the following Monday. The company decided to work the
entire work force on Sunday, May 29, at 200% wages to fill this order. How much
of the payroll on May 17 charged to  the work in process account .

Correct answers:
400
Incorrect
0/2 Points
 31
For May 27, how much is the labor cost charged to Work in process account?

Correct answers:
640
Incorrect
0/3 Points
32
YWD Company had a production run of800 pairs of slacks during the last week of
June, at the following costs per pair:

Materials                                                                                            P50.00
Labor                                                                                                    40.00
Factory overhead (includes P7.00 allowance for spoiled work)            30.00

Final inspection reaveled 60 pairs not meeting quality standards, salable as

seconds at P40.00 per pair.
How much is the billing price of the remaining good unit if goods are billed at
50%above cost

Correct answers:
88800
Incorrect
0/3 Points
33
Assuming the spoilage is attributable to specific Job what will be the billing price?

Correct answers:
132000
Incorrect
0/3 Points
34
FTC manufacturers jacks and other lifting equipment. One order from Z KM
COMPANY for 600 jacks showed the following costs per unit: materials, P40.00;
labor, P17.50; factory overhead applied at 160% of direct labor cost (150% in
cases in which any defective unit costs are to be charged to a specific order.)
Final inspection revealed that 20% of good units  units were improperly riveted.
Correction of each defective unit requires P2.00 for materials , P3.00 for labor,
and factory overhead at the appropriate rate.

Assuming the defect are due to exacting specification of customer, How much is
the total cost of good units ?

Correct answers:
51200
Incorrect
0/2 Points
35
Assume the rework were charged to factory overhead, how much is the total cost
of finished units?

Correct answers:
51300
Incorrect
0/4 Points
36
Which of the following statements are TRUE?
a. If an employee earn P10 per hour and receives time and half hours in excess of
P40 per week, in a week when 45 Hours were worked the overtime premium
would be P25
b. If an employee earn P10 per hour and receives time and half hours in excess of
P40 per week, in a week when 45 Hours were worked the overtime pay would be
P75
c. If an employee earn P10 per hour and receives time and half hours in excess of
P40 per week, in a week when 45 Hours were worked , P475 will be charged to
work in process if the overtime is due TO shortage and delays of materials.
d.  If an employee earn P10 per hour and receives time and half hours in excess
of P40 per week, in a week when 45 Hours were worked , P400 will be charged to
work in process if the overtime is due to shortage and delays of materials.
A AND B
B AND C
A AND D
A, B AND D
Incorrect
0/3 Points
37
The following labor data for the past week were prepared for ZCC, an employee
of WXY Corp.:
 Day                                                                  Units Produced        Hours Worked

Monday.............................................................................           110                    8
Tuesday.............................................................................           125                    8
Wednesday........................................................................           120                   8
Thursday............................................................................           135                    8
Friday................................................................................             130                    8
ZCC's wage rate is 60 per hour, and the standard production rate is 15 units per
hour 
Assuming that the company is on a straight piecework incentive wage plan , how
much is the total earnings of ZCC in this week?

Correct answers:
2520
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