Name: CHRISTINE L.

REPULDA Date: 10/15/2022 Score:

Course: BSA Prof: Sir Mark Lester T. Balasa, CPA, MBA

I. THEORIES: Encircle the correct answer. d. Internal reporting for use in planning
and controlling routing operations.
1. Under which ethical standard of conduct does
the managerial accountant have the 6. The cost management function is usually
responsibility to refuse any gift, favour, or under the:
hospitality that would influence or appear to
influence his or her decision? a. Chief information
b. Treasurer
a. Competence c.Integrity c. Purchasing manager
b. Confidentiality d. Objectivity d. Controller
2. Under which ethical standard of conduct does 7. If a distinction is made between cost
the managerial accountant have the accounting and managerial accounting,
responsibility to refrain from either actively or managerial accounting is more oriented toward?
passively subverting the attainment of an
organization’s legitimate and ethical objectives? a. Valuation of inventory
b. Analysis of variances including
a. Integrity c. Objectivity spoilage
b. Competence d. Confidentiality c. Financial reporting to third parties
d. The planning and controlling aspects
3. For managerial decision purposes, the of the management process
volume of information should be evaluated on
the basis of? 8. The managerial function of controlling?
a. Cost-benefit relationship a. Is performed only by the controller of
b. A cost, but not benefit a company
c. A benefit, not cost b. Is only applicable when the company
d. Neither costs nor benefits but some sustains a loss
other criteria c. Is concerned mainly with an operating
a manufacturing segment
4. The first step in managerial decision making d. Includes performance evaluation by
is to? management
a. Specify the standard or expected 9. Planning is a function that involves?
outcome b.Gather information about the
consequence of each a. Hiring the right people for a particular
alternative c. Identify a job
problem b. Coordinating the accounting
information system
5. In a board sense, cost accounting can be c. Setting goals and objectives for an
defined within the accounting system as? entity
a. Internal and external reporting that d. Analyzing financial statements
may be used in making nonroutine 10. Managerial accounting creates value by:
decisions and in developing plans and
policies. a. By forcing managers to analyse
b. External reporting to government, historical figures and interpret the
various outside parties, and results
stockholders. b. By eliminating all pricing and costing
c. Internal reporting for use in errors
management planning and control and c. By focusing managers attention on
external reporting to the extent its the relationship between financial and
product-costing function satisfies non-financial factors
external reporting requirements. d. All of the given choices

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11. Which of the following best describes what a. Directing the granting of credit to
performance evaluation should be designed to clients
do? b.
Investing the organization’s funds
a. Modify goal and objectives each c. Tax planning
month d. Independently evaluating the firm’s
b. Establish sales goals and targets financial statements
c. Compare actual results to plan
d. Establish blame 18. Obtaining feedback is generally identified
most directly with the management function of?
12. Which of the following is a staff position?
a. Planning
a. Vice-president of production b. Directing and motivating
b. Vice-resident of marketing c. Controlling
c. Vice-president of finance d. Decision making
d. Plant foreman
19. A staff position:
13. Which management position is responsible
for raising capital? a. Relates directly to the carrying out of
the basic objectives of the organization
a. Internal auditor b. Is supportive in nature, providing
b. Treasurer service and assistance to other parts of
c. Controller the organization
d. CEO c. Is superior in authority to a line
14. Each of the following would be considered a position
staff function EXCEPT the? d. None of these

a. Vice-president of finance 20. Which of the following statements is true

b. Vice-president of corporate planning regarding ethics in decision-making?
c. Vice-president of research and a. Since most business decisions are
development simply a matter of economics, ethical
d. Vice-president of marketing considerations should be ignored
15. Management accountants generally exercise b. Decision making can have an ethical
which type of authority? as well as an economic impact
c. Managerial accountants do not face
a. Company ethical issues
b. Functional d. Business managers will always agree
c. Line on ethical choices.
d. Staff
21. Under which ethical standard of conduct
16. The treasurer function is usually not does the managerial accountant have the
concerned with responsibility to disclose fully all relevant
information that could reasonably be expected to
a. Investor relations influence an intended user’s understanding of
b. Financial reports the reports, comments, and recommendations
c. Short-term financing presented?
d. Credit extension and collection of bad
debts a. Objectivity c. Competence
b. Confidentiality d. Integrity
17. Which of the following duties is usually
assigned to the controller? 22. Which of the following does not describe
managerial accounting?
a. internally focused
b. emphasis on the future
c. externally focused
d. detailed information

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23. The managerial function of controlling? a. Planning
b. Controlling
a. Is performed only by the controller of c. Motivating
a company d. Follow-up
b. Is only applicable when the company
sustains a loss 25. Developing a company strategy for
c. Is concerned mainly with an operating responding to anticipated new markets is an
a manufacturing segment example of:
d. Includes performance evaluation by
management. a. Decision making
b. Controlling
24. In determining whether planned goals are c. Planning
being met, a manger is performing the function d. Motivating
of?

II. PROBLEMS:
1. The following activity and cost data that were provided by Hoist Corporation would help in estimating
its future maintenance costs:

Units Maintenance Cost

3 P450
7 P530
11 P640
15 P700
Using the least-squares regression method to estimate the cost formula, the expected total cost
for an activity level of 10 units would be closest to:
a) P612.50 b) P581.82 c) P595.84 d) P601.50

2. Given the cost formula Y= P17,500 + P4X, at what level of activity will total cost be P42,500?
a) 10,625 units b) 4,375 units c) 6,250 units d) 5,250 units

3. The Overland Company wants to develop a cost estimating equation for its monthly cost of electricity. It
has the following data:
Month Electricity Direct Labor Hours
January P6,750 1,500
April 7,500 1,700
July 8,500 2,000
October 7,250 1,600

4. Using the high-low method, what is the reasonable equation?

a) Y=P759+P5.00X
b) Y=P1,500+P3.50X

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 c) Y=P750+P3.50X
d) Y=P1,500+P5.00X

5. Based on the following, compute the amount of sales:

Profit margin before tax based on sales 8percent
Margin of safety ratio 20 percent
Fixed costs P1,200,000
Variable cost of goods sold 25 person
Variable selling and administrative expense ?
a) P2,026,667 b) P3,750,000 c) P6,080,000 d) P4,750,000
6. Carribean Company produces a product that sells for P60. The variable manufacturing costs are P30
per unit. The fixed manufacturing cost is P10 per unit based on the current level of activity, and fixed
selling and administrative costs are P8 per unit. A selling commission of 10% of the selling price is paid
on each unit sold. The contribution margin per unit is:
a) P24 b) P36 c) P30 d) P54
7. Seal Yard Ornaments sells lawn ornaments for P15 each. Seal’s contribution margin ratio is 40%.
Fixed costs are P32,000. Should fixed costs increase by 30%, how may additional units will Seal have to
produce and sell without affecting the current amount of profile?
a) 1,600 b) 5,333 c) 6,933 d) 1,067
8. At a break-even point of 5,000 units sold, variable expenses were P10,000 and fixed expenses were
P50,000. The profit from the 5,001st unit would be?
a) P10 b) P50 c) P15 d) P12
9. Galatica Company has fixed costs of P100,000 and breakeven sales of P800,000. Based on this
relationship, what is its projected profit at P1,200,000 sales?
a) P50,000 b) P200,000 c) P150,000 d) P400,000
10. The Hard Company sells widgets. The company breaks even at an annual sales volume of 80,000
units. As as annual volume of 100,000 units the company reports a profit of P220,000. The annual fixed
costs for the Hard Company are:
a) P880,000 b) P1,100,000 c) P800,000 d) P1,000,000
11. Tamarine Company earned P50,000 on sales of P400,000. It earned P70,000 on sales of P450,000.
The amount of total fixed costs for Tamarine Company is:
a) P0 b) P50,000 c) P110,000 d) P180,000
12. Albatross Company had fixed costs of P90,300. At sales volume of P360,000, return on sales is 10%;
at a P600,000 volume, return on sales is 20%. What is the break-even volume?
a) P225,000 b) P258,000 c) P301,000 d) P240,000

13. An entity has fixed costs of P200,000 and variable costs per unit of P6. It plans on selling 40,000 units
in the coming year. If the entity pays income taxes on its income at a rate of 40%, what sales price must
the firm use to obtain an after-tax profit of P24,000 on the 40,000 units?
a) P11.60 b) P11.36 c) P12.00 d) P12.50

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The Alphine Company’s year-end income statement is as follows:
Sales (20,000 units) P360,000
Variable costs 220,000
Contribution margin P140,000
Fixed costs 105,000
Net income P35,000
Alphine’s management is unhappy with the results and plans to make some changes for the next year. If
management implements a new marketing program, fixed costs are expected to increase by P19,200 and
variable costs to increase by P1 per unit. Unit sales are expected to increase by 15 percent.
14. What is the effect on income if the foregoing changes are implemented?
a) Decrease of P21,200
b) Increase of P13,800
c) Increase of P1,800
d) Increase of P14,800
15. The Caterpillar Company is expecting an increase in fixed costs by P78,750 upon moving their place
of business to the downtown area. Likewise it is anticipating that the selling price per unit and the variable
expenses will not change. At present, the sales volume necessary to breakeven is P750,000 but the
expected increase in fixed costs, the sales volume necessary to breakeven will go up P975,000. Based
on these projections, what would be the required peso sales to earn P70,000 in the coming year?
a) P1,175,000 b) P950,000 c) P425,000 d) P1,150,000
Mercado, Inc. had the following economic data for 2010:
Net sales P400,000
Contribution margin 160,000
Margin of safety 40,000

16. What is Mercado’s breakeven point in 2010?

a) P360,000 b) P288,000 c) P320,000 d) P80,000
17. Marquez Co. manufactures a single product. For 2010, the company had sales of P90,000, variable
costs of P50,000 and fixed cost of P30,000. Marquez expects its cost structure and sales price per unit to
remain the same in 2011; however total sales are expected to jump by 20%. If the 2011 projections are
realized, operating income in2011 should exceed net income in 2010 by?
a) 100% b) 80% c) 20% d) 50%

Below is the income statement for Blender Co. for 2010:

Sales P400,000
Variable cost (125,000)
Contribution margin P275,000

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 Fixed costs (200,000)
Profit before tax P75,000

18. What is the degree of operating leverage for Blender Company for 2010?
a) 3.67 b) 1.45 c) 5.33 d) 1.67

Step Company produces toys and other items for use in beach and resort areas. A small, inflatable toy
has come onto the market that the company is anxious to produce and sell. Enough capacity exists in the
company’s plant to produce 16,000 units of toy each month. Variable costs to manufacture and sell one
unit would be P12.50, and fixed costs associated with the toy would total P350,000 per month. The
company’s Marketing Department predicts has demand for the new toy will exceed the 16,000 units that
the company is able to produce. Additional manufacturing space can be rented from another company at
a fixed cost of P10,000 per month. Variable costs in the rented facility would total P14 per unit, due to
somewhat less efficient operations than in the main plant. The new toy will sell for P30 per unit.
19. The breakeven units for the new toy would be:
a) 20,000 b) 18,000 c) 21,000 d) 22,500
20. How many units should be the company need to sell in order to earn a before-tax profit of P150,000?
a) 9,143 b) 30,375 c) 31,875 d) 35,000
21. If the sales manager receives a bonus of P1.00 for each unit sold in excess of the break-even point,
how many units must be sold each month to earn a return of 25% on the monthly investment in fixed
costs?
a) 23,344 b) 27,000 c) 29,833 d) 30,000
22. Assuming that Step Company will just rent a manufacturing space for a month in order to produce
special order for 8,000 toys. What is the acceptable minimum selling price to Step Company for the
special sale?
a) P14.00 b) P15.25 c) P22.00 d) P24.00

During the month of May, Royal Co. produced 10,000 units of Product X. costs incurred by Roy during
May were as follows:
Direct materials P10,000
Direct labor 20,000
Variable manufacturing overhead 5,000
Variable selling and general 3,000
Fixed manufacturing overhead 9,000
Fixed selling and general 4,000
Total P51,000
23. What are the unit costs under absorption and variable costing methods, respectively?
a) P5.10;P3.80 b) P3.80;P5.10 c) P4.40;P3.50 d) P3.50;P4.40

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24. Crown Clothing Store had a balance in the accounts receivable account of P390,000 at the beginning
of the year and a balance of P 410,000 at the end of the year. The net credit sales during the year
amounted to P4,000,000. Using 360-day year, what is the average collection period of the receivables?
a) 30 days b) 65 days c) 73 days d) 36 days
25. During 2010, Central Company purchased P960,000 of inventory. The cost of goods sold for 2010
was P900,000, and the ending inventory at December 31, 2010 was P180,000. What was the inventory
turnover for 2010?
a) 6.4 b) 6.0 c) 5.3 d) 5.4
Selected data from Claudine Company’s year-end financial statements are presented below. The
difference between average and ending inventory is immaterial.
Current ratio 2.0
Quick ratio 1.5
Current liabilities P120,000
Inventory turnover (based on the cost of sales) 8 times
Gross profit margin 40%

26. Mildred’s net sales for the year were: a) P800,000 b) P672,000 c) P480,000 d) P1,200,000 Net sales
are P 6,000,000, beginning total assets are P2,800,000, and the asset turnover is 3.0. what is the ending
total asset balance?
a) P2,000,000 b) P1,200,000 c) P2,800,000 d) P1,600,000
27. Assume you are given the following relationships for the Camp Company:
Sales/total assets 1.5%
Return on assets (ROA) 3%
Return on equity (ROE) 5%
The Camp Company’s debt ratio is:
a) 40% b) 60% c) 35% d) 65%
Anilao Ski Company recently expanded its manufacturing capacity to allow it to product up to 15,000 pairs
of cross-country skis of either the mountaineering model or the touring model. The sales department
assures management that it can sell between 9,000 and 13,000 pairs (units) of either product this year.
Because the models are very similar. Anilao Ski will produce only one of the two models. The following
data were compiled by the accounting department.
Mountaineering Touring
Selling price per unit P88.00 P80.00
Variable cost per unit 52.80 52.80
Fixed cost will total P369,000 if the mountaineering model is produced but will be only P316,800 if the
touring model is produced. Anilao Ski Company is subject to a 40% income tax rate
28. The total sales revenue at which Anilao Ski Company would make the same profit or loss regardless
of the ski model it decided to produce is?
a) P880,000 b) P422,400 c) P924,000 d) P686,400
29. How much would be variable cost per unit of the touring model have no change before it had the
same breakeven point in units as the mountaineering model?
a) P2.68/unit increase b) P4.53/unit increase c) P5.03/unit decrease d) P2.97/unit decrease

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Vatican Company currently sells 400,000 bottles of perfume each year. Each bottle costs P0.84 to
produce and sells for P1.00 Fixed costs are P28,000 per year. The firm has annual interest expense of
P6,000, preferred stock dividends of P2,000 per year, and a 40% tax rate.
30. What is the degree of financial leverage?
a) 1.20 b) 1.35 c) 2.40 d) 1.7

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