Professional Documents
Culture Documents
1. B 11. A
2. C 12. D
3. D 13. C
4. B 14. A
5. D 15. A
6. D 16. B
7. D 17. C
8. D 18. C
9. D 19. D
10. A 20. A
II.
1. Answer: A
Number of bed days based on occupancy rate of:
80% = 450 x 30 x 0.8 10,800
60% = 450 x 30 x 0.6 8,100
18,900 ÷ 2,700 P7
2. Answer: B
a = P326,700 – (8,100 x P7) P270,000
3. Answer: C
Number of bed days at 75% occupancy rate
0.75 x 30 x 450 = 10,125
Y = P270,000 + (10,125 x P7) P340,875
4. Answer: C
b = (P130,000 – P115,000) ÷ (100,000 – 80,000)
P15,000 ÷ 20,000 P0.75
5. Answer: A
a = P130,000 – (10,000 x P0.75)
a = P55,000
6. Answer: B
Utilities 110,000 x P0.6 P 66,000
Maintenance P55,000 + (110,000 x P0.75) 137,500
Depreciation 60,000
Total P263,500
7. Answer: B
b = (P775 - P550) ÷ (650 - 420)
P225 ÷ 230
b= P0.98
a = P138.00
8. Answer: C
Slope represents the variable rate.
Intercept represents total fixed cost
9. Answer: C
Y = 12 x 30
= P360
10. Answer: A
b = (105,000 x P11.40) - (70,000 x P13.40)
105,000 - 70,000
Y = P420,000 + P7.40X
Y = P420,000 + (80,000 x 7.40)
= P1,012,000
11. Answer: D
Number of units sold = 1,500,000 ÷ 7,500 200
13. Answer: C
Total Fixed Costs include:
Rental P 3,000
Cost of the caller 200
Prize money P10,000
Total P13,200
14. Answer: B
The cost of supplies varies based upon the number of players that attend each session not just the number of
sessions
15. Answer: D
Total costs: (P3,000 + P13,200) P16,200
If the number of people attending each session is the same, all of the costs act like variable costs and the
average cost per session equals the total cost per session.
16. Answer: B
If they hold 2 sessions per day:
Hall Rental P 3,000
Caller salary (2 x P200) 400
Total prize money 20,000
Total cost of supplies 6,000
Total P29,400
Average cost per session P29,400 ÷ 2 sessions P14,700
The hall Rental is fixed per day and not per session. The prize money and cost of the caller varies per session
and the cost of supplies varies per person attending.
17. Answer: C
Cost of Goods sold is P15 per unit. A variable cost is one which is constant per unit.
Unit sales Unit Variable Cost
1,000 15,000 ÷ 1,000 P15
2,000 30,000 ÷ 2,000 P15
3,000 45,000 ÷ 3,000 P15
18. Answer: B
The salary is a mixed cost. Notice that the cost per unit and in total for each volume level are not the same.
There is a variable cost component of P10 per unit and a fixed cost component of P10,000. Within a relevant
range, unit variable cost as well as total fixed cost are constant.
19. Answer: C
Cost of Goods Sold is a variable cost. Rent and Depreciation are fixed costs. Salary is a mixed cost that has
some fixed cost behavior.
20. Answer: B
Sales P60 * 3000 units P180,000
Total Variable Cost 75,000
Contribution Margin P105,000
21. Answer: B
Rent P20,000
Depreciation 30,000
Fixed salary cost 10,000
Total fixed costs P60,000
III
1. Answer: C
Direct materials P 8
Direct labor 10
Variable overhead 2
Total unit cost- variable costing P20
Value of ending inventory (5,000 x P20) P100,000
2. Answer: C
Sales P40,000
Cost of goods sold
Direct materials P9,050
Direct labor 6,050
Rent (0.9 x P3,000) 2,700
Depreciation 2,000
Supervision (2/3 x P1,500) 1,000
Insurance (2/3 x P1,200) 800 (21,600)
Gross margin P18,400
Gross margin percentage (P18,400 ÷ P40,000) 46%
3. Answer: C
Direct materials P10,000
Direct labor 20,000
Variable overhead 5,000
Total variable product cost P35,00
Variable unit cost (P35,000 ÷ 10,000) P3.50
Add Fixed overhead per unit (P9,000 ÷ 10,000) 0.90
Absorption unit cost P4.40
4. Answer: B
Fixed overhead rate per unit: P12 – P8 P4
Difference in income: 2,000 x P4 P8,000
During the current year, the company’s production equaled the budgeted. The inventory increased. Therefore,
absorption costing income is higher than the variable costing income.
5. Answer: C
The production and unit sales during year 3 matched with year 1.
6. Answer: C
The income under absorption costing is higher by P10,000 because the amount of fixed overhead that related to
unsold units was deferred and was included as cost of finished goods inventory. The variable costing income
statement immediately wrote the entire fixed overhead that was incurred during the year as period cost.
Fixed overhead deferred as product cost: 5,000 x P2 P10,000
Absorption income (P50,000 + P10,000) P60,000
7. Answer: C
Absorption income 65,000
Less Fixed Overhead in decrease in inventory (18,000 – 15,000) x 2.50 12,500
Income, Variable costing 52,500
8. Answer: B
CMR per unit = Selling Price – Unit variable cost
P8.50 = P12.00 – P3.50
Variable Cost Per unit
Product: (50,000 – 30,000) / 20,000 = P1.00
Selling & Adm. (variable period costs) 30,000/12,000 2.50
Total variable cost/unit P3.50
* Total variable costs – variable period cost
(selling & adm.) = variable product cost.
9. Answer: A
1.00 - (1.00 x .75) = P0.25
10. Answer: A
The only relevant information to compute the effect of dropping the mining of gold ore is the negative segment
margin. If the product line is dropped, the company can avoid the negative margin of P1 million.
11. Answer: C
Avoidable common expenses P 25,000
Segment margin lost 32,000
Decrease in profit P( 7,000)
12. Answer: A
Revenues P29,000
Variable cost (P29,000 x 0.57) 16,530
Contribution margin 12,470
Less Short-term controllable fixed cost 4,200
Short-term controllable margin 8,270
Long-term controllable fixed cost 3,800
Long-term controllable margin P 4,470
13. Answer: B
Revenues P48,000
Variable cost (P48,000 x 0.59) 28,320
Contribution margin 19,680
Short-term controllable fixed cost 5,200
Short-term controllable margin – Div B P14,480
14. Answer: A
Budgeted actual fixed overhead (0.5 x P200,000) P100,000
Applied fixed overhead (120,000 x P1.00) 120,000
Overapplied fixed overhead (favorable volume variance) P 20,000
15. .Answer: B
Sales (60,000 x P8) P480,000
Cost of goods sold (60,000 x P4) 240,000
Gross profit 240,000
Selling and other expenses (60,000 x 2) + P80,000 200.000
Absorption profit P 40,000
16. Answer: B
Total contribution margin (60,000 x P3) P180,000
Less: Fixed manufacturing OH P100,000
Fixed selling and other expenses 80,000 180,000
Variable costing profit NIL
CM per unit (P1.6M – P0.6M – P0.4M) ÷ 200,000) P3.00
17. Answer: D
The sales pattern indicated that sales for the first semester was 30%. The assumption was that the pattern was
still valid. Therefore the assumed 90,000 units would be 30 percent of expected annual sales.
(90,000 ÷ 0.3) = 300,000 units