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ACC 223A /
Assessment 2 (Week 8) /
Assessment 2

Started on Thursday, 22 April 2021, 2:55 PM

State Finished
Completed on Thursday, 22 April 2021, 4:49 PM
Time taken 1 hour 54 mins
Marks 52.00/55.00
Grade 94.55 out of 100.00

Question 1
The management of Furbee Co. would
like to earn 20% on its invested capital of P4,500,000.  The company estimates
Correct
sales of 100,000 pots
during the coming year ending December 31. 
Sales commissions are paid at the rate of 10% of the
Mark 2.00 out of sales price. Other
expenses are as follows:
2.00
Variable manufacturing expenses                   30% of sales

Fixed manufacturing expenses                       100,000

Fixed general and administrative expenses      25,000

How much is the target income

Answer: 900,000 

The correct answer is: 900,000

Question 2 2. How much should be the sales to earn the target income?
Correct

Mark 2.00 out of Answer: 1,708,333 

2.00

The correct answer is: 1,708,333

Question 3 3. How much is the budgeted variable manufacturing expenses?

Correct

Mark 2.00 out of Answer: 512,500 

2.00

The correct answer is: 512,500

Question 4 4. How much is the budgeted Sales commission?

Correct

Mark 2.00 out of

Answer: 170,833 
2.00

The correct answer is: 170,833

Question 5 5. How much is the budgeted contribution margin?
Correct

Mark 3.00 out of Answer: 1,025,000 

3.00

The correct answer is: 1,025,000

Question 6 6. How much is the budgeted gross profit?

Correct

Mark 3.00 out of Answer: 1,095,833 

3.00

The correct answer is: 1,095,833

Question 7 7. how much is the budgeted cost of goods sold?

Correct

Mark 2.00 out of

Answer: 612,500 
2.00

The correct answer is: 612,500

Question 8 Rabee  Co. prepared the following figures as a basis for its 2021 budget:
Correct
Product                     Expected Sales        SP per unit                Required materials per unit

Mark 2.00 out of

                                                                                                        X                    Y

2.00
A                                 40,000 units            P9.00                            2kgs             4kgs

B                                 20,000                      P12.00                         4 kgs             1 kg    

Estimated inventories at the beginning and desired quantities at the end of 2021 are:

Material                  beginning                Ending             Price per kg

H                            5,000 kgs                  6,000 kgs                   P1.20

I                             6,000                         7,500                            0.60

Product                    Beginning            Ending            DLH per 1,000 units

A                              3,000 units             2,500 units           150

B                               1,000                     2,000                    375

The direct labor cost is budgeted at P16 per hour and variable factory overhead at P12 per hour of direct labor. Fixed
factory overhead, estimated to be P120,000, is a joint cost and is not allocated to specific products in developing the
manufacturing budget for internal management use.

a. In the preparation of the production budget, how much is product A's planned production?


Answer: 39,500 

The correct answer is: 39,500

Question 9
b. In the preparation of the production budget, how much is product B's planned production?
Correct

Mark 2.00 out of

2.00 Answer: 21,000 

The correct answer is: 21,000

Question 10 c. In the preparation of the purchase budget, how much is the budgeted quantities of materials to be purchased for
Correct material H?
Mark 2.00 out of
2.00
Answer: 164,000 

The correct answer is: 164,000

Question 11 d. In the preparation of the purchase budget, how much is the budgeted quantities of materials to be purchased for
Correct material I?

Mark 2.00 out of

2.00
Answer: 180,500 

The correct answer is: 180,500

Question 12 e. In the preparation of the purchase budget, how much is the budgeted peso amount of materials to be purchased for
Correct material H?
Mark 2.00 out of
2.00
Answer: 196,800 

The correct answer is: 196,800

Question 13 f. In the preparation of the purchase budget, how much is the budgeted peso amount of materials to be purchased for
Correct material I?
Mark 2.00 out of
2.00
Answer: 108,300 

The correct answer is: 108,300

Question 14 g. In the preparation of the manufacturing budget, how much is the cost of materials needed for product A?
Correct

Mark 2.00 out of

Answer: 189,600 
2.00

The correct answer is: 189,600

Question 15 h. In the preparation of the manufacturing budget, how much is the cost of materials needed for product B?
Correct

Mark 2.00 out of Answer: 113,400 

2.00

The correct answer is: 113,400

Question 16 i. In the preparation of the manufacturing budget, how much is the total variable manufacturing cost for Product A?

Correct

Mark 2.00 out of Answer: 355,500 

2.00

The correct answer is: 355,500

Question 17 j. In the preparation of the manufacturing budget, how much is the total variable manufacturing cost for Product B?

Correct

Mark 2.00 out of Answer: 333,900 

2.00

The correct answer is: 333,900

Question 18 k. In the preparation of the manufacturing budget, how much is the total manufacturing cost? (total for Products A and B)

Correct

Mark 2.00 out of Answer: 809,400 

2.00

The correct answer is: 809,400

Question 19
Jerbee, Inc.
was contacted to manufacture a special order of 10,000 units for an international company.  The special order
Correct
asked for a price that will not exceed P50. 
No sales commission is needed for the special order but a handling cost of
Mark 2.00 out of
P2.00 per unit need to be incurred for export. Regular sales will not be affected if special order is to be accepted.
2.00
 The company is currently operating at 80,000 units even its maximum capacity is at 100,000 units. This is still true
regardless of the special order. 

The following are the unit selling price and costs on estimated actual capacity for the coming  year:

Selling price                          P65.00

DM                                                     P15

DL                                                         20

VOH                                                       7.50

FOH                                                       3.00

Commission                                          5.00

Other Variable marketing expenses    1.50

Other fixed marketing expenses          0.50

General Variable expenses                   3.00

General fixed expenses                        1.00

a. How much is the differential cost per unit?

Answer: 49 

The correct answer is: 49.00

Question 20 b. How much is the differential profit per unit if the special order will be accepted?
Correct

Mark 3.00 out of Answer: 1 

3.00

The correct answer is: 1

Question 21 c. If the special order is to be accepted, how much will be the increase or decrease in the profit of the company?
Correct

Mark 3.00 out of Answer: 10,000 increase 

3.00

The correct answer is: 10,000 increase

Question 22 d. Based on your differential analysis, should the company accept or reject the special order?
Correct

Mark 3.00 out of Answer: accept 

3.00

The correct answer is: accept

Question 23
The management of Ogie Inc. is considering the entry of its new Foldable tablet product line in the market.  Because its
Incorrect
existing product line, Cellular phone,
has similar characteristics to the new product line, management expects the Foldable
Mark 0.00 out of
tablet sales to require a minimum of additional expense.  It is also anticipated that Cellular phone sales
will increase if
3.00
both product lines are offered in a package deal.  The Foldable tablet product line would be manufactured
in a
company‑owned facility that is now being rented to another firm for P600,000 per year.  Depreciation on this
facility and
all other building expenses are presently P100,000 per year.  In addition, the company will need to rent
equipment to
manufacture the new product line at an additional cost of P150,000
per year.  The contribution margin for
the Foldable
tablet product line would be P50 per unit, and annual sales are estimated at
10,000 units.  Last year, sales for the
Cellular
phone product line amounted to 40,000 units. 
Other relevant per unit sales and cost data were:

Selling price..................................................................... P100

Variable cost of goods

sold.......................................... 25

Fixed cost of goods sold................................................ 20

Variable marketing and

administrative expenses. 10

Fixed marketing and

administrative expenses...... 15

If the new Foldable tablet product

line is undertaken, the company expects a 10% increase in Cellular phones sales. 
Otherwise, Cellular phone sales will remain
unchanged.  Additional facilities will
not be needed to manufacture the
additional Cellular phone units.

a. How much is the increase or decrease in the total profit of the company if it decides to add the new Foldable tablet
product libe?

Answer: 610,000 increase 

The correct answer is: 10,000 increase

Question 24 b. Based on your differential analysis, should the company add or not the new Foldable tablet product line?
Correct

Mark 3.00 out of Answer: add 

3.00

The correct answer is: add

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