MANAGEMENT ACCOUNTING PART 1: ADVANCED CVP ANALYSIS ODM

1. Multiple regression analysis involves studying the relationship of (2pts)

a. One independent variable c. Two or more dependent variable
b. Two dependent variables d. Two or more independent variables

2. When computing the number of units that must be sold to earn a certain amount of profit before income tax, the
profit is treated as if it were
a. A slope cost b. A variable cost c. A fixed cost d. A controllable cost

3. If a company’s variable cost ratio is 60%, which formula represents the computation of peso sales that will yield
a profit equal to 20% of the contribution margin when S = sales in pesos and F = fixed cost? (2pts)
a. S = F / 1.2 b. S= F / 0.32 c. S = F / 0.2 d. S = F / 0.12

4. Total production costs for Dan company are budgeted at P230,000 for 50,000 units of budgeted output and at
P280,000 for 60,000 units of budgeted output. Because of the need for additional facilities, budgeted fixed costs
for 60,000 units are 25% more than budgeted fixed costs for 50,000 units. How much is Dan’s budgeted variable
cost per unit of output? (3pts)
a. P 1.60 b. P 1.67 c. P 3.00 d. P 5.00

5. Heather company has a contribution margin ratio of 20%, a margin of safety ratio of 33 1/3% and an income of
P5,000. Heather company’s break-even peso sales was (3pts)
a. P 15,000 b. P 50,000 c. P 60,000 d. P 75,000

6. At 40,000 units of sales, Roger corporation had an operating loss of P3.00 per unit. When sales were 70,000
units, the company had a profit of P1.20 per unit. The number of units to break-even is (4pts)
a. 35,352 b. 65,747 c. 52,574 d. 57,647

7. A retail company determines selling price by marking up variable costs 60%. In addition, the company uses
frequent selling price markdowns to stimulate sales. If the markdowns average 10%, what is the company’s
contribution margin ratio? (3pts)
a. 27.5% b. 30.6% c. 37.5% d. 41.7%

8. Sales for a retail shop were P250,000. Income for the period totaled P30,000 and cost of goods sold was P110,000.
If the contribution margin was P110,000, total variable selling and administrative expenses must have been (Note:
cost of goods sold is purely variable for a retail shop)
a. P40,000 b. P30,000 c. P100,000 d. P150,000

9. Ian company’s gross margin exceeded its contribution margin by P25,000. If sales equaled P120,000 when income
equaled P20,000 and total selling and administrative expenses equaled P55,000, then the contribution margin
exceeds income by
a. P30,000 b. P50,000 c. P75,000 d. P80,000

“Concentrate all your thoughts upon the work at hand.

The sun’s rays do not burn until brought to a focus.”
-Alexander Graham Bell