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MANAGEMENT ADVISORY SERVICES OCTOBER 2022 BATCH

FIRST PRE-BOARD EXAMINATION AUGUST 1, 2022; 8:00AM-11:00AM

INSTRUCTIONS: This examination consists of 70 items. Time allotted is 180 minutes.

1. 1st- Management accounting provides data for internal uses.

2nd- The chief accounting executive in an organization is often called the controller.
a. First statement is True; second statement is False
b. First statement is False; second statement is True
c. Both statements are False
d. Both statements are True

2. 1st- Management carries out four broad functions in an organization namely, planning, coordinating,
controlling, and decision-making.
2nd- Financial accounting is mainly concerned with providing information for external users such as
stockholders and creditors.
a. First statement is true; second statement is false
b. First statement is false; second statement is true
c. Both statements are true
d. Both statements are false

3. Integrity is an ethical requirement for all management accountants. One aspect of integrity requires
a. Performance of professional duties in accordance with applicable laws.
b. Avoidance of conflict of interest.
c. Refraining from improper use of inside information.
d. Maintenance of an appropriate level of professional competence.

4. If a distinction made between costs accounting and managerial accounting, managerial accounting is
more oriented toward
a. Valuation of inventory
b. Analysis of variances including spoilage
c. Financial reporting to third parties
d. The planning and controlling aspects of the management process

5. What kind of authority is exercised over subordinates?

a. Functional
b. Line
c. Company
d. Staff

6. Which one is a characteristic of management accounting?

a. Focused on details
b. Governed by GAAP
c. No unifying model
d. Periodic reporting

7. Which of the following is not the controller’s function?

a. General accounting
b. Credit approval
c. Government reports
d. Systems
8. In managerial accounting which is considered most useful
a. Full cost accounting
b. Normal costing
c. Differential costing
d. Accrual accounting

9. Just-in-time manufacturers are more likely than conventional manufacturers to

a. prepare production budgets without a sales forecast.
b. budget materials purchases equal to the current month's needs for production.
c. budget unit production for the month at greater than budgeted unit sales for the month.
d. experience cash shortages.

10. The Japanese use the term kaizen when referring to

a. scarce resources.
b. pro forma financial statements.
c. continuous improvement.
d. the sales forecast.

11. Hambly Corporation currently sells a product for P75 per unit. Its market share is 20 percent. The
marketing manager feels that the market share can be increased to 30 percent with a reduction in
price to P65. The product is currently earning a profit of P12 per unit. The president of Hambly
Corporation feels that the P12 profit per unit must be maintained. What is the target cost per unit?
a. P75
b. P65
c. P63
d. P53

12. The just-in-time manufacturing system:

a. Contrasts with the supply push system.
b. Complements the supply push systems.
c. Neither complements nor contrasts with the supply push system.
d. Contrasts the demand pull system.

13. Target costing is directed toward:

a. Increasing the activity costs associated with existing products.
b. Identifying the amount by which the costs of existing products must be reduced to achieve a
target profit margin.
c. The creation and design of products that will provide adequate profits.
d. The improvement of existing production processes by eliminating non-value adding activities.

14. The value chain usually starts with the _________ and ends with the ____________.
a. Supplier, customer.
b. Retailer, wholesaler.
c. Customer, retailer.
d. Retailer, customer.

15. Kaizen Costing helps to:

a. Keep profit margin relatively stable as product price declines over the product’s life cycle.
b. Reduce the cost of engineering change orders during each stage of the product life cycle.
c. Reduce the cost of products in the design and development stage
d. Keep the target cost as the primary focus after a product enters production

16. Kanban is the Japanese word for

a. Production
b. Just-In Time
c. Card
d. Target Costing
17. Under Theory of Constraints, goods will flow through a production process at the rate of the
a. Slowest part of the process
b. Fastest part of the process
c. Average of all the parts of the process
d. Time standards set using externally calibrated benchmarks

18. The quality costs that are incurred to determine whether particular units of product meet quality
standards are
a. appraisal costs.
b. external failure costs.
c. internal failure costs.
d. prevention costs.

19. The cost of downtime on machines while rework is being performed is a(n)
a. appraisal cost.
b. external failure cost.
c. internal failure cost.
d. prevention cost.

The next two (2) items are based on the following information: The management of Metropolis
Inc. has performed costs studies and projected the following annual costs based on 40,000 units of
production and sales:
Total Annual Costs Percent of Variable
Portion
of Total Annual Costs
Direct material P400,000 100%
Direct labor 360,000 75
Manufacturing overhead 300,000 40
Selling, general and adm. 200,000 25

20. What unit selling price will yield at 10% profit from sales of 40,000 units?
a. P33.50/unit
b. P35/unit
c. P40/unit
d. P30/unit

21. What is the total variable cost for Metropolis Inc.?

a. P1,260,000
b. P840,000
c. P420,000
d. P960,000

22. In cost terminology, conversion costs consist of

a. Direct and indirect labor
b. Direct labor and direct materials
c. Direct labor and factory overhead
d. Indirect labor and variable factory overhead

23. Wages of the security guard for a small plant are an example of
Indirect Labor Fixed Factory Overhead
a. No No
b. Yes Yes
c. Yes No
d. No Yes
The next two (2) items are based on the following information:
Walter Company had the following inventories at the beginning and end of March 2022:
March 1, 2022 March 31, 2022
Direct Materials P 36,000 P 30,000
Work-in-process 18,000 12,000
Finished goods 54,000 72,000
The following additional manufacturing cost data were available for the month of March 2022:
Direct materials purchased P 84,000
Direct-labor payroll 60,000
Direct-labor rate per hour 7.50
Factory overhead rate per direct labor hour 10.00

24. During March 2022 conversion cost added to production was

a. P 60,000
b. P80,000
c. P140,000
d. P150,000

25. The cost of goods manufactured for March 2022 was

a. P212,000
b. P218,000
c. P230,000
d. P236,000

26. JJ Motors, Inc. employs 45 sales personnel to market its line of luxury automobiles. The average car
sells for P23,000, and a 6% commission is paid to the salesperson. JJ Motors is considering a change
to a commission arrangement that would pay each salesperson a salary of P2,000 per month plus a
commission of 2% of the sales made by that salesperson. The amount of total monthly car sales at
which JJ Motors would be indifferent as to which plan to select is
a. P2,250,000.
b. P3,000.000.
c. P1,500,000.
d. P1,250,000.

27. The controller of Masikap Inventions has just received the following results from the company’s
statistics officer about the monthly energy cost:
y= P 108,796.33 + 2.875 x
Standard of determination (r2) = 71.2%
The statistician included in his report that this data is true for the range of 10,000 to 20,000 machine
hours. Which of the following is false?
a. If the machine hours is equal to 30,000, the monthly energy cost can be predicted to be at
P195,046.33.
b. Y is equal to the monthly energy cost composed of both variable and fixed component.
c. If the machine hours equal to 12,000, the variable cost is P 34,500.
d. If the machine hours 18,000, the fixed cost per hour is P 6.04.

28. The industrial engineering approach to cost analysis.

a. is the inspection of historical cost data recorded at different volumes
b. is scientific conjecture concerning what cost behavior patterns should be based on studies of the
physical aspects of operations.
c. makes a separation of components by comparing costs incurred at two different volumes, one
high level volume and one low level volume.
d. none of the above
29. The following data were collected from the records of the shipping department of a company
Month Units Shipped Cost Of Shipping
Supplies
1 7,000 P35,000
2 5,000 25,000
3 3,000 14,900
4 13,000 65,000
5 11,000 55,200
6 10,000 50,200
7 15,000 74,900
Based upon the above information, the cost of shipping supplies is most likely to be a
a. Variable cost
b. Fixed cost
c. Mixed cost
d. Cannot be determined with the given information.

The next three (3) items are based on the following information:
The following information is available regarding the total manufacturing overhead of Holmes Company
for a recent four-month period.
Machine Mfg.
Hours Overhead
April 85,000 PhP167,000
May 75,000 150,000
June 105,000 195,000
July 90,000 178,000

30. Refer to the above information. Using the high-low method, compute the variable element of
manufacturing overhead cost per machine hour.
a. PhP0.87 per machine hour.
b. PhP1.50 per machine hour.
c. PhP1.40 per machine hour.
d. PhP2.10 per machine hour.

31. Refer to the above information. Using the high-low method, compute the fixed element of Holme's
monthly overhead cost.
a. PhP37,500.
b. PhP35,000.
c. PhP30,000.
d. PhP40,000.

32. Refer to the above information. Holme 's projected August operations will require approximately
110,000 machine hours. Using the high-low method, compute total manufacturing overhead
estimated for August.
a. PhP177,500.
b. PhP187,500.
c. PhP197,500.
d. PhP202,500.

33. Which of the following statement is correct?

a. In the standard regression equation y = a + bx, the letter a is best described as a constant
coefficient.
b. The letter x in the standard regression equation is best described as the dependent variable.
c. 𝑟 2 is the coefficient of correlation
d. In the standard regression equation y = a + bx, the letter y is best described as the letter that
follows x.

34. Crookston Company breaks even at P300,000 sales and earns P40,000 at P400,000 sales. Which of
 the following is true?
a. Fixed costs are P120,000.
b. Profit at sales of P500,000 would be P50,000.
c. The selling price per unit is P4.
d. Contribution margin is 10% of sales.

35. Ruben intends to sell his customers a special round-trip airline ticket package. He is able to purchase
the package from the airline carrier for P150 each. The round-trip tickets will be sold for P200 each
and the airline intends to reimburse Ruben for any unsold ticket packages for 95% of the amount
paid by Ruben. Fixed costs include P5,000 in advertising costs. If he purchases 200 packages, how
many ticket packages will Ruben need to sell in order to break even?
a. 114 packages
b. 82 packages
c. 100 packages
d. 200 packages

36. Atlantic Pacific Clothing generates sales of P10 million. The firm’s selling price per unit is P10;
variable operating costs per unit are P5 per unit. After deducting fixed operating costs of P2.5 million,
Atlantic Pacific generates an operating profit (earnings before interest and taxes) of P2.5 million. If
sales were to increase to P15 million, operating profit (earnings before interest and taxes) would
increase to P5 million. What is Atlantic Pacific’s degree of operating leverage?
a. 1.25
b. 1.50
c. 1.75
d. 2.00

37. Below is an income statement for Gerber Co. for 200A:

Sales P 400,000
Variable costs (125,000)
Contribution margin P275,000
Fixed costs (200,000)
Profit before tax 75,000
Assuming that the fixed costs are expected to remain at P200,000 for 200B, and the sales price per
unit and variable costs per unit are also expected to remain constant, how much profit before tax will
be produced if the company anticipates 200B sales rising to 130% of the 200A level?
a. P97,000
b. P195,000
c. P182,500
d. P157,500

38. The Alumnae Association is planning an annual homecoming. The committee has listed the following
expected costs for the event:
Dinner per person P 70
Programs and souvenir per person 30
Orchestra 15,000
Tickets and advertising 7,000
Rental 48,000
Other costs 10,000
The committee would like to charge P300 per head for the event. Assume that only 250 persons are
expected to attend the homecoming. What ticket price must be charged to breakeven?
a. P420
b. P320
c. P350
d. P390

39. Which of the following is not an assumption underlying cost-volume-profit analysis?

a. All costs can be identified as fixed or variable.
b. Only one product is sold.
c. Inventory balances do not change.
 d. Production volume is within the relevant range.

40. Forde Co. has an operating leverage of 4. Sales are expected to increase by 8% next year.
Operating income is:
a. unaffected
b. expected to increase by 2%
c. expected to increase by 32%
d. expected to increase by 4 times

41. A product sells for PhP120, variable costs are PhP78 and fixed costs are PhP35,000. If the selling
price can be increased by 20% with a similar increase in variable costs, how many less units would
have to be sold to earn PhP200,000?
a. 5,595
b. 4,662
c. 933
d. 10,257

42. Management expects total sales of PhP40 million, a margin of safety of PhP10 million, and a
contribution margin ratio of 45%. Which of the following estimated amounts is not consistent with
this information?
a. Variable costs, PhP22 million.
b. Fixed costs, PhP18 million.
c. Operating income, PhP6 million.
d. Break-even sales volume, PhP30 million.

43. Stewart International’s breakeven point is 8,000 racing bicycles and 12,000 5-speed bicycles. If the
selling price and variable costs are P570 and P200 for a racer, and P180 and P90 for a 5-speed
respectively, what is the weighted average contribution margin?
a. P100
b. P 202
c. P145
d. P 179

The next two (2) items are based on the following information:
Cardinals Company reported the following information about the production and sales of its only product
during its first month of operations:
Sales (P225 per unit) P360,000
Direct materials used P176,000
Direct labor P100,000
Variable factory overhead P44,000
Fixed factory overhead P80,000
Variable selling and administrative
expenses P20,000
Fixed selling and administrative
expenses P10,000

Ending inventories:
Direct materials -0-
WIP -0-
Finished goods 400 units

44. The cost of producing one unit of product using variable costing is:
a. P160
b. P200
c. P225
d. P170

45. The operating income (loss) under absorption costing is:

a. P0
 b. P10,000
c. (P6,000)
d. (P70,000)

The next two (2) items are based on the following information: The following is available for
Kefir Corporation's new product line and shall be used for the next two items:
Selling price per unit P15
Variable manufacturing cost per unit of production 8
Annual fixed manufacturing costs 25,000
Variable administrative costs per unit of production 3
Total annual fixed selling and administrative expenses 15,000
There was no inventory at the beginning of the year. During the year, 12,500 units were produced and
10,000 units were sold.
46. The total variable costs charged to expense for the year, assuming that Kefir uses direct costing
would be
a. P110,000
b. P100,000
c. P117,500
d. P80,000

47. The total fixed costs charged against the current years operations assuming that Kefir uses
absorption costing is
a. P35,000
b. P40,000
c. P25,000
d. P15,000

48. Lorna Inc. manufactured 700 units of Product A, a new product, in 1999, Product A's variable and
fixed manufacturing costs per unit were P6 and P2 respectively. The inventory of Product A on
December 31, 200A consisted of 100 units. There was no inventory on January 1, 200A. What would
be the change in the peso amount of inventory on December 31, 200A if the direct costing method
was used instead of the absorption costing method was used instead of the absorption costing
method?
a. P800 decrease
b. P200 decrease
c. P0
d. P200 increase

The next two (2) items are based on the following information: Pedro Company's records for the
year ended December 31, 200A includes the following:
Net sales P1,400,000 Units manufactured 70,000
Cost of goods manufactured: Units sold 60,000
Variable P 630,000 Finished goods
Fixed P 315,000 inventory, Jan. 1 None
Operating expenses:
Variable P 98,000
Fixed P 140,000
49. What would be Pedro's finished goods inventory at December 31, 200A under the variable costing
method?
a. P90,000
b. P140,000
c. P105,000
d. P135,000
50. Under the absorption costing method, Pedro's operating income for 200A would be
a. P217,000
b. P307,000
c. P352,000
d. P374,000
51. Finland Inc. manufactured 700 units of Product A, a new product, during the year. Product A’s
variable and fixed manufacturing costs per unit were P6.00 and P2.000, respectively. The inventory
of Product A on December 31, consisted of 100 units. There was no inventory of Product A on
January 1. What would be the change in peso amount of inventory on December 31 if direct costing
were used instead of absorption costing?
a. P800 decrease
b. P200 decrease
c. P0
d. P200 increase

52. Clint Division of XYZ Corp. sells 80,000 units of part X to the outside market. Part X sells for P40, has
a variable cost of P22, and a fixed cost per unit of P10. Clint has a capacity to produce 100,000 units
per period. Robert Division currently purchases 10,000 units of part X from Clint for P40. Robert has
been approached by an outside supplier willing to supply the parts for P36. What is the effect on
XYZ's overall profit if Clint ACCEPTS the outside price and Robert continues to buy inside?
a. no change
b. P140,000 decrease in XYZ profits
c. P80,000 decrease in XYZ profits
d. P40,000 increase in XYZ profits

53. The Nicholson and Cage Divisions are part of the same company. Currently the Cage Division buys a
part from Nicholson for P82. The Nicholson Division wants to increase the price of the part it sells to
Cage to P100. Cage Division can buy the part from an outside supplier for P94. The cost data for
the Nicholson Division is as follows:
Direct materials P25.50 Direct labor P32.50
Variable overhead 22.50 Fixed overhead 9.60

If Nicholson ceases to produce the parts for Cage, it will be able to avoid one-fourth of the fixed
manufacturing overhead. The Nicholson Division has excess capacity but no alternative uses for its
facilities. From the standpoint of the company as a whole, should Cage continue to buy from
Nicholson?
a. Yes, for an overall advantage of P6.30 per unit.
b. Yes, for an overall advantage of P11.10 per unit.
c. No, for an overall advantage of P6 per unit.
d. No, for an overall advantage of P24.30 per unit.

54. A company's approach to a make-buy decision

a. Depends on whether the company is operating at or below breakeven.
b. Depends on whether the company is operating at or below normal volume.
c. Involves an analysis of avoidable costs.
d. Should use absorption (full) costing.

The next four (4) items are based on the following account:
You have been engaged to assist the management of the Arcadia Corporation in arriving at certain
decisions. Arcadia has its home office in Manila and leases factory buildings in Malinta, Bulacan, and
Pasig, all of which produce the same product. The management of Arcadia has provided you with a
projection of operations for 200Z, the forthcoming year, as follows (in ‘000 of pesos):
Total Malinta Bulacan Pasig
Sales 4400 2200 1400 800
Factory Overhead- fixed 1100 560 280 260
Administration -fixed 350 210 110 30
Variable costs 1450 665 425 360
Allocated home office costs 500 225 175 100
Net Profit from operations 1000 540 410 50

The sales price per unit is P25.

Due to the marginal results of operations of the factory in Pasig, Arcadia has decided to cease operations
and sell the factory’s machinery and equipment by the end of 200Y. Arcadia expects that the proceeds
from the sale of these assets would be greater than their book value and would cover all terminating
costs.

Arcadia, however, would like to continue serving its customers in that area if it is economically feasible
and is considering one of the following three alternatives:
(1) Expand the operations of the Bulacan factory by using space presently idle. This move would
result in the following changes in that factory’s operations:
Increase over factory’s current operations
Sales 50%
Factory overhead- fixed 20%
Administration - fixed 10%
Under this proposal, variable costs would be P8 per unit sold.
(2) Enter into a long-term contract with a competitor who will serve that area’s customers. This
competitor would pay Arcadia a royalty of P4 per unit based upon an estimated of 30,000 units
being sold.
(3) Close the Pasig factory and not expand the operations of the Bulacan factory.
55. What will be the effect on the Arcadia’s net profit if it decides to expand the Bulacan factory?
a. Increase of P236,000
b. Increase of P370,000
c. Increase of P46,000
d. Increase of P150,000

56. What will be Arcadia’s net profit if it decides to enter into a long-term contract with a competitor who
will serve that area’s customers?
a. (P30,000)
b. P970,000
c. P1,070,000
d. P780,000

57. What will be Arcadia’s net profit if it decides to close the Pasig factory and not expand the operations
of the Bulacan factory?
a. P1,236,000
b. P660,000
c. P850,000
d. P950,000

58. What is the shutdown point in units of the Pasig factory (rounded to nearest unit)?
a. 22,942
b. 21,091
c. 16,657
d. 17,059

59. AAA Company makes two products from a common input. Joint processing costs up to the split-off
point total P38,400 a year. The company allocates these costs to the joint products on the basis of
their total sales values at the split-off point. Each product may be sold at the split-off point or
processed further. Data concerning these products appear below:
Product X Product Y Total
Allocated joint processing P20,800 P17,600 P38,400
costs
Sales value at split-off point P26,000 P22,000 P48,000
Costs of further processing P22,600 P20,400 P43,000
Sales value after further P45,000 P45,900 P90,900
processing
What is the minimum amount the company should accept for Product X if it is to be sold at the split-
off point?
a. P22,400
b. P43,400
c. P20,800
d. P45,000
60. Ames Cleaning Products had the following unit costs:
Direct materials P12
Direct labor 5
Variable factory overhead 4
Fixed factory overhead (allocated) 9
A one-time customer has offered to buy 1,000 units at a special price of P24 per unit. Because of
capacity constraints, 1,000 units will need to be produced during overtime. Overtime premium is P4
per unit. How much additional profit (loss) will be generated by accepting the special order
a. P6,000 profit
b. P4,000 loss
c. P24,000 profit
d. P4,000 profit

61. A business needs a computer application that can be either developed internally or purchased.
Suitable software from a vendor costs P29,000. Minor modifications and testing can be conducted by
the systems staff as part of their regular workload. If the software is developed internally, a systems
analyst would be assigned full time, and a contractor would assume the analyst's responsibilities. The
hourly rate for the regular analyst is P25. The hourly rate for the contractor is P22. The contractor
would occupy an empty office. The office has 100 square feet, and occupancy cost is P45 per square
foot. Other related data are as follows. Computer time is charged using predetermined rates. The
organization has sufficient excess computer capacity for either software development or
modification/testing of the purchased software.
Internal Purchased
Development Software
Systems analyst time in hours
Development 1,000 N/A
Modifications and testing N/A 40
Computer charges P800 P250
Additional hardware purchases P3,200 N/A
Incidental supplies P500 P200

Based solely on the cost figures presented, the cost of developing the computer application will be
a. P3,500 less than acquiring the purchased software package.
b. P500 less than acquiring the purchased software package.
c. P1,550 more than acquiring the purchased software package.
d. P3,550 more than acquiring the purchased software package.

62. Juice Company budgeted P148,000 sales on account for June, P120,000 for July, P211,000 for
August, P198,000 for September, and P164,000 for October. Collection experience indicates that 60%
of the budgeted sales will be collected the month after the sale, 36% will be collected the second
month, and 4% will be uncollectible. Which month should have the largest amount of cash receipts
from accounts receivable budgeted?
a. August.
b. October.
c. September.
d. November.

63. A company has P10,000 in cash and P150,000 in merchandise inventory on March 31. The desired
cash and merchandise inventory balances on June 30 are P20,000 and P250,000, respectively. Sales
for the quarter are expected to be P300,000, all in cash. Gross margin is 40% of sales. Cash
operating expenses are expected to be P50,000. All merchandise inventory purchases are paid for in
cash at the time of purchase. What amount of financing will the company need during the quarter?
a. 50,000
b. 40,000
c. 30,000
d. 20,000
64. Carmel, Inc. pays out sales commissions to its sales team in the month the company receives cash
for payment. These commissions equal 5% of total (monthly) cash inflows as a result of sales.
Carmel has budgeted sales of P300,000 for August, P400,000 for September, and P200,000 for
October. Approximately, half of all sales are on credit, and the other half are all cash sales.
Experience indicates that 70% of the budgeted credit sales will be collected in the month following
the sale, 20% the month after that, and 10% of the sales will be uncollectible. Based on this
information, what should be the total amount of sales commissions paid out by Carmel in the month
of October?
a. P8,500
b. P13,500
c. P17,000
d. P22,000

65. In preparing its cash budget for April, Brown Co. made the following projections:
Sales P4,000,000
Gross margin (based on sales) 25%
Decrease in inventories 160,000
Decrease in accounts payable for inventories 275,000

For April, the estimated cash disbursements for inventories were

a. P3,275,000
b. P3,115,000
c. P2,840,000
d. P2,565,000

The next three (3) items are based on the following account:
Hejlik Company manufactures wooden wagons. To manufacture a wagon, it takes 20 units of wood
and 1 unit of steel. Scheduled production of wagons for the next two months is 500 and 600 units,
respectively. Beginning inventory is 4,000 units of wood and 30 units of steel. The ending inventory
of wood is planned to decrease 500 units each of the next two months, and the steel inventory is
expected to increase 5 units each of the next two months.
66. How many units of wood are expected to be used in production during the second month?
a. 12,500 units
b. 10,000 units
c. 12,000 units
d. 10,750 units

67. How many units of steel are expected in the raw material inventory at the end of the second month?
a. 30 units
b. 40 units
c. 35 units
d. 20 units

68. What is the number of units of wood that need to be purchased by Hejlik Company during the first
month?
a. 1,000 units
b. 9,500 units
c. 10,000 units
d. 10,500 units

The next two (2) items are based on the following account:
Table 1 shows Dorian Industries’ projected sales for the first six months of 2022:
Jan. P200,000 April P400,000
Feb. P240,000 May P320,000
March P280,000 June P320,000
Additional information describing patterns of cash flow:
25% of sales is collected in cash at the time of the sale,
50% is collected in the month following the sale, and the remaining
25% is collected in the second month following the sale.
Cost of goods sold is 75% of sales. Purchases are made in the month prior to the sale, and payments for
purchases are made in the month of the sale. Total other cash expenses are P60,000/month. The
company’s cash balance as of February 28, 2022 will be P40,000. Excess cash will be used to retire
short-term borrowing (if any). Dorian has no short-term borrowing as of February 28, 2022. Assume that
the interest rate on short-term borrowing is 1% per month. The company must have a minimum cash
balance of P25,000 at the beginning of each month.”
(Note to candidate: Round all Answers to the nearest P100.)
69. Based on the information in Table 1, what are Dorian Industries’ total cash receipts (collections) for
April 2022?
a. P400,000
b. P300,000
c. P100,000
d. (P60,000)

70. Based on the information in Table 1, what is Dorian Industries’ total disbursement in May (not
including interest on short-term borrowing)?
a. P300,000
b. P240,000
c. P25,900
d. (P60,000)