AnswerstoMultipleChoiceQuestions

MASbyCabrera
Chapter1:
1. D
11. D
21. B
31. D
41. A
51.
2. D
12. D
22. B
32. C
42. C
52.
3. D
13. D
23. A
33. D
43. D
53.
4. B
14. A
24. A
34. B
44. B
54.
5. D
15. A
25. B
35. D
45. C
55.
6. A
16. A
26. C
36. B
46. B
56.
7. B
17. D
27. B
37. C
47. A
57.
8. D
18. A
28. D
38. B
48. B
58.
9. D
19. D
29. B
39. A
49. C
59.
10. A
20. D
30. C
40. A
50. D
60.

Chapter2:

Chapter3:
21.
11. B
21. A
31. B
1. D
11. B
12. A
22. B
32. C
2. D
12. C
22.
13. D
23. C
33. C
3. D
13. D
23.
14. A
24. D

4. B
14. A
24.
15. D
25. A

5. A
15. D
25.
16. A
26. A

6. B
16.A
26.
17. C
27. B

7. D
17. A
27.
18. B
28. C

8. C
18. B
28.
19. D
29. B

9. B
19. C
29.
20. B
30. A

10. C
20. C
30.

Chapter4:
1. D
11. A,C,D

2. A
12. B*

3. A
13. D

4. B

5. D

6. C

7. C

8. A
9. D

10. C

*(P400,000P160,000)P160,000=150%

Chapter5:
1. A
11. C
21. B
31. C
41. C

2. C
12. A
22. D
32. D

3. D
13. C
23. A
33. C

4. B
14. B
24. C
34. A

5. A
15. D
25. A
35. A

6. D
16. B
26. C
36. C

7. C
17. A
27. D
37. A

8. D
18. C
28. A
38. A

9. A
19. A
29. D
39. C

10. B
20. C
30. A
40. C

Chapter6:
1. D
4. D
7. C
10. B
2. C
5. B
8. B
11. A
6. D
9. A
12. D
3. D

Chapter7:
1. B
5. A
9. A
13. A
2. B
6. B
10. A
14. D
3. C
7. B
11. D*
15. C
4. D
8. B
12. C
16. A

*Supportingcomputationforno.11:

DilutedEPSfor12/31/2006

B
B
A
C
D
C
C
C
A
B

B
C
A
B
A
D
B
B
D
C

17.
18.
19.
20.

31.
32.
33.
34.
35.
36.
37.
38.

A
B
C
D

P3,500,000+(P800,000x65%)
400,000+25,000+225,000
P4,020,000

or
P6.18
650,000

B
D
D
D
C
A
A
C

21. C
22. A
23. B

Chapter8:
1. B
2. D
3. B
4. A
5. C
6. D

7.
8.
9.
10.
11.
12.

C
D
C
C
A
C

13.
14.
15.
16.
17.
18.

D
D
B
A
C
C

19.
20.
21.
22.
23.
24.

A
A*
B
B
C
C

25.
26.
27.
28.
29.
30.

C
B
B
A**
A
B

* Controllablecostsarethosecoststhatcanbeinfluencedbyaspecifiedmanagerwithinagiventimeperiod.
** Theanswerassumesabsorptioncostingmethodisused.

SupportingComputations
14. P60+P10+P18+P4=P92
15. P32+P16=P48

Chapter9:
1. A
2. D
3. B
4. A
5. B
6. B
7. C
8. D
9. C
10. A

11.
12.
13.
14.
15.
16.
17.
18.
19.
20.

C*
C*
C
A
D
C
D
B
C
C

21.
22.
23.
24.
25.
26.
27.
28.
29.
30.

16. P60+P10+P18+P32=P120
17. P4+P16=P20

C
D
C
A
D
B
D
B
A
D

31.
32.
33.
34.
35.
36.
37.
38.
39.
40.

D
B
A
B
A
D
B
C
B
D

41. B
42. D
43. C

*SupportingComputations:
11. (10,000x2)(P3,000x2)P5,000=P9,000
12. [(P20+P3+P6)x2,000units]+(P10x1,000units)=P68,000

Chapter10:

1. D
6. D
11. A
16. A
2. D
7. A
12. D
17. D
3. D
8. C
13. B
18. A
4. C
9. C
14. D
19. C
5. D
10. B
15. C
20. D

Chapter11:
Chapter12:
1. A
11. B
21. D
1. D
2. D
12. D
22. A
2. B
3. C
13. C
23. B
3. B
4. B
14. A
24. A
4. B
5. A
15. C
25. B
5. B
6. D
16. D
26. D
6. C
7. A
17. D
27. B
7. A
8. B
18. C
28. C
8. B
9. D
19. B
29. A
9. A
10. C
20. A
30. C
10. A

Chapter13:
1. B
6. B
11. B
16. D
21. A
26.
2. B
7. D
12. A
17. D
22. D
27.
3. B
8. B
13. A
18. D
23. C
28.
4. C
9. A
14. C
19. C
24. B
29.
5. C
10. D
15. D
20. D
25. C
30.

Chapter14:
Chapter15:
1. C 11. E 21. C 31. B
1. B
2. D 12. D 22. B 32. D
2. B
3. A 13. C 23. A 33. D
3. C
4. A 14. C 24. D 34. D
4. E
5. C 15. B 25. B 35. C
5. C
6. A 16. C 26. A 36. D
6. C
7. D 17. B 27. A 37. B
7. D
8. A 18. A 28. B 38. D
8. C
9. C 19. B 29. D 39. B
9. A
10. A 20. A 30. A 40. D
10. D

11.
12.
13.
14.
15.
16.
17.
18.
19.
20.

B
A
C
D
B
A
C
C
B
C

A
B
C
B
A

11.
12.
13.
14.
15.
16.
17.
18.
19.
20.

C
B
C
B
D
C
A
B
E
B

21.
22.
23.
24.
25.
26.
27.
28.
29.
30.

C
C
D
C
C
C
D
A
C
D

Chapter15:
Supportingcomputations:
Questions16to20:

Costofsales
Add:
DesiredMinimumInventory
Total
Less:
BeginningInventory(1,400,000x0.3)
GrossPurchases

Less:
Cashdiscount
Netcostofpurchases

PaymentsofPurchases

60% monthofpurchase

40% followingmonth

Total

January
P1,400,000
492,000
1,892,000
420,000
1,472,000
14,720
P1,457,280

P874,368

(18)

(17)
(16)

February
P1,640,000
456,000
2,096,000
492,000
1,604,000
16,040
P1,587,960

P952,776
582,912
P1,535,688

(19)

Gross

Currentmonthssales(with
discount)35%
P595,000
Currentmonthssales(without
discount)15%
255,000
Previousmonthssales(with
discount)4.5%
67,500

Previousmonthssales(without

607,500
discount)40.5%

P1,525,000

(20)TotalCollectionsinFebruary

Add:Cashsales

Total
(21)Estimatedcashreceipts

Collectionsfromcustomers

Proceedsfromissuanceofcommonstock

Proceedsfromshort termborrowing

Total

Less:Estimatedcashdisbursements

Forcostandexpenses

Forincometaxes

Purchaseoffixedasset

Paymentonshort termborrowings

Total

Cashbalance,Dec.31

(22)Netincome
P120,000

Add: Depreciation
65,000

Workingcapitalprovidedfromoperations

Add: Increaseinincometaxespayable
P80,000

Increaseinprovisionfordoubtful

accountsreceivable
45,000

Total

Less: Increaseinaccountsreceivable
P35,000

Decreaseinaccountspayable
25,000

Increaseincash

(23)CashReceiptsforFebruary2005

FromFebruarysales(60%x110,000)

FromJanuarysales

Total

(24)Pro formaIncomeStatement,February2005

Sales

Costofsales(75%)

Grossprofit

Less: Operatingexpenses
16,500

Net

February
Cash
Discount

P11,900

1,350

P583,100
255,000
66,150

P13,250

P1,511,750
350,000
P1,861,750

607,500
P1,511,750

P1,350,000
500,000
100,000
P1,950,000
P1,200,000
90,000
400,000
50,000
1,740,000
P210,000

P185,000

125,000
P310,000
60,000
P250,000

P66,000
38,000
P104,000

P110,000
82,500
P27,500

Depreciation
5,000
23,700

Baddebts
2,200

Netoperatingincome

P3,800

(25)AccountsPayableonFebruary28,2005willbetheunpaidpurchasesinFebruary (75%xP120,000)=P90,000.

Questions26to29:

Netsales

P2,000,000
Less: Costofsales

Finishedgoodsinventory,Jan.1
P350,000
Add: Costofgoodsmanufactured(Sch.I)
1,350,000 *

Totalavailableforsale
P1,700,000
Less:Finishedgoodsinventory,Dec.31
400,000 1,300,000 (26)
GrossProfit

P700,000
Less: Operatingandfinancialexpenses

Selling
P300,000

Administrative
180,000

Finance
20,000 500,000
Netincomebeforetaxes
P200,000

* Determinedbyworkingbackfromnetincometosales.

ScheduleI

Rawmaterialsused

Rawmaterialsinventory,Jan.1
P250,000

Add:Purchases
491,000 (29)

Totalavailable
741,000

Less:Rawmaterialsinventory,Dec.31
300,000

Rawmaterialsused
P441,000

Directlabor
588,000

Manufacturingoverhead
441,000 (28)

TotalManufacturingCost
P1,470,000 (27)

Add: Work in processinventory,Jan.1

200,000

Total P1,670,000

Less: Work in processinventory,Dec.31

320,000

Costofgoodsmanufactured
P1,350,000

(30)Variablefactoryoverhead

P150,000

P3.125
48,000

Fixedfactoryoverhead

P240,000

5.000
48,000

Totalfactoryoverhead
P8.125

Chapter16:
1. C
2. C
3. A
4. B
5. A
6. B
7. C
8. C
9. B
10. B

Chapter17:
6. A
7. A
8. B
9. B
10. B

11.
12.
13.
14.
15.
16.
17.
18.
19.
20.

B
A
B
C
A
D
D
A
D
B

21.
22.
23.
24.
25.
26.
27.
28.
29.
30.

A
C
C
C
C
D
E
B
B
A

31.
32.
33.
34.
35.
36.
37.
38.
39.
40.

A
B
B
D
B
B
C
D
D
A

41.
42.
43.
44.
45.

B
C
D
A
B

6.
7.
8.
9.
10.

C
B
D
A
D

31.
32.
33.
34.
35.

B
D
C
B
A

41.
42.
43.
44.
45.

B
C
D
D
A

46.
47.
48.
49.
50.

B
D
B
B
D

Chapter18:
1. C
2. B
3. D
4. B
5. D
6. C
7. A
8. A
9. A
10. C

Chapter19:
1. C
2. C
3. B
4. B
5. A
6. B
7. C
8. B
9. A
10. B

11.
12.
13.
14.
15.
16.
17.
18.
19.
20.

D
C
A
A
A
C
C
D
C
D

21.
22.
23.
24.
25.
26.
27.
28.
29.
30.

D
C
C
D
D
B
D
E
B
A

31.
32.
33.
34.
35.
36.
37.
38.

C
D
A
C
D
C
D
D

11.
12.
13.
14.
15.
16.
17.
18.
19.
20.

D
A
D
A
D
C
A
C
B
C

21.
22.
23.
24.
25.
26.
27.
28.
29.
30.

D
A
D
E
B
D
D
C
A
A

31.
32.
33.
34.
35.

A
D
C
A
C

Supportingcomputationsfornos.16 29:

16. Sales[(100,000x90%)x(P5.00x120%)]

Less:Variablecosts(P300,000x90%)

Contributionmargin

Less:Fixedcosts

Operatingincome

17. Directmaterials

Directlabor

Overhead

Sellingcost

Minimumsellingpriceperunit

18. Relevantcosttomake(10,000xP24)

Purchasecost

Less:Savingsinmanufacturingcost
P45,000

Avoidablefixedoverhead
50,000

Netpurchaseprice

Differenceinfavorofbuyalternative

19. Increaseinsales(60,000xP3)

Less:Increaseinvariablecost(60,000xP2.50)

Netincreaseinincome

20.
R

Sales(10,000xP20)
P200,000

Less:Variablecosts

R(P12x10,000)
120,000

S(P8x10,000)

T(P4x10,000)

Contributionmargin
P80,000

21.
R

Sales(P16x15,000)
P240,000

Less:Variablecosts

R(P12x15,000)
180,000

S(P8x15,000)

T(P4x15,000)

Contributionmargin
P60,000

Less:Fixedcosts
40,000

Operatingincome
P20,000

P540,000
270,000
P270,000
150,000
P120,000
P4
5
2
3
P14
P240,000
P300,000
95,000
P205,000
P35,000

P180,000
150,000
P30,000
S
P200,000

80,000

P120,000

T
P200,000

40,000
P160,000

S
P240,000

120,000

P120,000
80,000
P40,000

T
P240,000

60,000
P180,000
120,000
P60,000

22.

23.

24.

25.

26.

27.

28.

29.

Oldoperatingincome:

Contributionmargin

Less:Fixedcost

Newoperatingincome
Difference decrease
Sales
Less:Variablecosts

Directmaterials

Directlabor

Factoryoverhead

Marketingexpenses

Administrativeexpenses
Contributionmargin
Less:Fixedcosts

Factoryoverhead

Marketingexpenses

Administrativeexpenses

Increaseinfixedcosts
Profit

Sales
Less:Variablecosts

Directmaterials

Directlabor

Factoryoverhead

Marketingexpenses

Administrativeexpenses
Contributionmargin
Less:Fixedcosts

Factoryoverhead

Marketingexpenses

Administrativeexpenses

Decreaseinfixedcosts

(P25,0004)
Profit

P80,000
40,000
P40,000
20,000
P20,000

P1,200,000
P300,000
400,000
80,000
70,000
50,000 900,000
P300,000
P50,000
30,000
20,000
10,000 110,000
P190,000
P1,200,000
P275,000
375,000
80,000
70,000
50,000 850,000
P350,000
P50,000
30,000
20,000
(6,250) 93,750
P256,250

Directmaterials
(P2x5,000)
Directlabor
(P8x5,000)
Variableoverhead
(P4x5,000)

Totalvariablecosts

Add:Avoidablefixedoverhead

Total

P10,000
40,000
20,000
P70,000
10,000
P80,000

Avoidablefixedoverhead
Directmaterials
Directlabor
Variableoverhead

Total
Multipliedby:Numberofunitstobeproduced
Totalrelevantcoststomakethepart
Purchasecost(P1.25x10,000)
Variablecoststomake
Savingsofmakingtheblade

P4
4
16
18
P42
20,000
P840,000
P12,500
10,000
P2,500

Sellingpriceperunit
Less:Variablecostsofgoodssoldperunit

([P320,000 P80,000]20,000units)
Contributionmarginperunit
MultipliedbyunitstobesoldunderSpecialOrder
Increaseinoperatingincome

P17

12
P5
2,000
P10,000

P600,000
400,000
P200,000

Budgetedoperatingincome:

Contributionmargin(P2,000,000x30%)

Lessfixedcosts

Netoperatingincome
Operatingincomeundertheproposal:

SalesP2,000,000

LessVariablecosts

([70%xP2,000,000]x80%)

Contributionmargin

Lessfixedcosts

Increaseinbudgetedoperatingprofit

Chapter20:
1. D
11. D
21.
2. C
12. D
22.
3. B
13. D
23.
4. B
14. C
24.
5. A
15. C
25.
6. C
16. D
26.
7. D
17. D
27.
8. B
18. B
28.
9. B
19. A
29.
10. A
20. A
30.

Chapter21:
1. B
6. A
11. A
2. C
7. C
12. B
3. B
8. B

4. B
9. D

5. B
10. C

Chapter23:
6. D
11. C
7. D
12. D
8. C
13. C
9. A
14. D
10. A
15. A

Chapter24:
1. A
11. B
21. C
2. B
12. D
22. D
3. C
13. C
23. C
4. C
14. A
24. A
5. D
15. C
25. C
6. B
16. C
26. D
7. A
17. A
27. A
8. C
18. C
28. C
9. B
19. B
29. D
10. A
20. A
30. D

Chapter25:
1. A
11.
A
21.
A
2. C
12.
B
22.
D
3. B
13.
A
23.
C
4. D
14.
B
24.
D
5. A
15.
C

6. C
16.
D

7. C
17.
B

8. B
18.
C

9. C
19.
A

10. D
20.
D

SupportingComputations:
Operationalpartialproductivity

2005

Input
Partial
Resource Productivit
Used
y
Output
X 45
60,000 75,000 = 0.8

Direct

labor 60,000 10,000 = 6.0

Financialpartialproductivity

1,120,000
P880,000
520,000

C
B
C
D
C
C
D
B
D
A

360,000
P160,000

31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
Chapter22:
1. A
2. B
3. C
4. D
5. D

31.
32.
33.
34.
35.
36.
37.

D
C
C
D
D
B
B
B
D
B

6.
7.
8.
9.
10.

A
B
D
A
C

A
A
B
A
C
B
D

2006
Input
Resource
Used
Output
64,000 89,600 =

64,000 10,847 =

Partial
Productivit
y
0.7143

5.9002

11.
12.
13.
14.
15.

D
D
B
C
A

2006
2005
Costof
Costof
Partial
Partial
Input
Input
Unitsof Resource Productivit Unitsof Resource Productivit
y
y
Output
Used
Output
Used
X 45
60,000 P540,000= 0.1111 64,000 P609,280= 0.1050

Direct

labor 60,000 300,000 = 0.2

64,000 P347,104= 0.1844
Totalproductivityinunits

2005
2006
(a) Totalunitsmanufactured

60,000
64,000
(b) Total variable manufacturing costs

incurred

P840,000
P956,384

0.071429 (5) 0.066919

(c) Totalproductivity(a)(b)
(d) Decreaseinproductivity
0.0714290.066919 = 0.00451(6)
Totalproductivityinsalespesos

(a) Totalsales
(b) Total variable manufacturing costs
incurred
(c) Totalproductivity(a)(b)
(d) Decreaseinproductivity
(7) Operationalpartialproductivity:

2005
P1,500,000

2006
P1,600,000

P840,000
P956,384
P1.7857 (5)
P1.6730
P1.7857P1.6730 = P0.1127(6)

Actual Production
9,500
OperationalPartialProductivity
=
=
Actual Input
8,950

(8) Financialpartialproductivity:

2005
2006
486,000
(1) Output
400,000
(2) Directmaterials:

Quantity
160
180
xP3,125
Unitcost
xP3,375
P562,500
Totaldirectmaterialscost
P540,000

(3) DMfinancialpartialproductivity

0.864
(1)(2)
0.7407
(4) Directlabor:

Hourspent
10,000
13,500
xP25

Hourlywage
xP26
P337,500
Totaldirectlaborcost
P260,000

(5) DLfinancialpartialproductivity

1.44
(1)(4)
1.5385

(9) Totalproductivity:

2005
2006
486,000
(1) Output
400,000
Totalcost:

Directmaterials
P540,000
P562,500
cost
337,500

Directlaborcost
260,000
P900,000
(2) Totalcost
P800,000
0.54
(3) Totalproductivity(1)(2)
0.5

MarketShare

Firm
TotalMarket
MarketShare
Actual

100,000 / 2,000,000 =
5%
Budget

90,000 / 1,500,000 =
6%

1. Marketsizevariance: (2,000,0001,500,000)x0.06xP8 = P240,000F (10)

2. Marketsharevariance: (5% 6%)x2,000,000xP8
= P160,000U (11)
3. Salesquantityvariance:(100,00090,000)xP8
= P80,000F (12)

=1.06

(13)

ProductA
ProductB
Total
Budgetedsalesunit
30,000
60,000
90,000
Budgetedcontributionmarginper
xP10.00

xP4.00
unit
P600,000
P720,000
Budgetedtotalcontributionmargin
P120,000
Budgetedaveragecontribution

marginperunit

P8.00

(14)

ProductA
ProductB
Total
Actualunitssold
35,000
65,000

60,000

Budgetssalesunit
30,000
Differencesinsalesunits
5,000
5,000

Budgetedcontributionmarginper
xP10.00

xP4.00
unit

Salesvolumecontributionmargin
P50,000F
P70,000F
variance
P20,000F

Salesmixes:

Actual
Budgeted

%
Unit
%
Unit
ProductA
30,000
1/3
35,000
35
2/3
65,000
65
ProductB
60,000
100
100,000
100
TOTAL
90,000

(15)Salesmixcontributionmarginvariance:

ProductA:(0.351/3)x100,000xP4=
P6,667F

ProductB:(0.652/3)x100,000xP10=
16,667U

Totalsalesmixcontributionmarginvariance
P10,000U

(16)Salesquantitycontributionmarginvariance:

ProductA:(100,00090,000)x1/3xP4=
P13,333F

ProductB:(100,00090,000)x2/3xP10=
66,667F

Totalsalesquantitycontributionmarginvariance
P80,000F

(17)Weightedaveragebudgetcontributionmarginperunit:
P8.00(calculatedinno.13)
Marketsizecontributionmarginvariance:
(2,000,0001,500,000)x90,000/1,500,000xP8=P240,000F

(18)Marketsharecontributionmarginvariance:

(100,000/2,000,00090,000/1,500,000)x2,000,000xP8=

P160,000U

(19)Flexiblebudgetcontributionmarginvariance:

ProductA
ProductB

TotalContributionmargin
ActualOperating
FlexibleBudget
Result
35,000xP3=
35,000xP4=
P105,000
P140,000
65,000xP10=
65,000xP12=
P650,000
P780,000
P885,000
P790,000

TOTAL

(20)Totalcontributionmarginpricevariance(given)

Salespricevariance:

ProductA:(P12P10)x35,000=

ProductB:(P24P25)x65,000=

Totalsalespricevariance

Totalvariablecostpricevariance

(21)Totalflexiblebudgetcontributionmarginvariance

Totalcontributionmarginpricevariance(given)

Totalvariancecostefficiencyvariance

P70,000F
P65,000 U

Flexible
Budget
Contribution
Margin
Variance
P35,000U
P130,000F
P95,000F
P50,000F

5,000F
P45,000 F
P95,000 F
50,000 F
P45,000 F

(22)Salesmixratio:

Actual
Budget

Quantity
Ratio
Quantity
Ratio
R66
1,000
0.50
1,200
0.75
0.50
400
0.25
R100
1,000
1.00
1,600
1.00
TOTAL
2,000

R66salesquantityvariance:(2,0001,600)x0.75xP10=P3,000F

(23)R100salesmixvariance:(0.50.25)x2,000xP70=P35,000F

(24)Totalsalesvolumevariance:

R66:

(1,0001,200)xP10=
P2,000 U

R100:
(1,000400)xP70=
42,000 F

Total

P40,000 F

Chapter26:
Chapter27:
1. C
11.
C
21.
C
1. C
11.
C
2. A
12.
B
22.
D
2. B
12.
A
3. D
13.
D
23.
B
3. C
13.
C
4. C
14.
B
24.
D
4. D
14.
B
5. B
15.
A

5. D
15.
C
6. D
16.
D

6. A
16.
D
7. D
17.
C

7. C
17.
D
8. A
18.B

8. C
18.
D
9. D
19.
B

9. D
19.A
10.B
20.B

10. D
20.
A