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General Instructions: Read Carefully Each Questions. The Answers For The Questions Are To Be Submitted in Google Classroom

1. For a multiple choice question, the relevant costs for decision making are the anticipated future costs that will differ among alternatives. 2. The opportunity cost is the benefit given up by choosing one alternative over another. 3. Based on information provided about Maco Corporation's new solar-powered flashlight, the total prime cost for each flashlight is P128, which is the sum of the material, parts fabrication, assembly, and variable overhead costs.

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Ruby Amor Doligosa
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615 views3 pages

General Instructions: Read Carefully Each Questions. The Answers For The Questions Are To Be Submitted in Google Classroom

1. For a multiple choice question, the relevant costs for decision making are the anticipated future costs that will differ among alternatives. 2. The opportunity cost is the benefit given up by choosing one alternative over another. 3. Based on information provided about Maco Corporation's new solar-powered flashlight, the total prime cost for each flashlight is P128, which is the sum of the material, parts fabrication, assembly, and variable overhead costs.

Uploaded by

Ruby Amor Doligosa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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General Instructions: Read carefully each questions.

The answers for the questions are to be


submitted in google classroom.

1. For decision making purposes, relevant cost are


a. Variable past cost
b. All fixed and variable cost
c. Anticipated future cost that will differ among various alternatives.
d. Costs incurred within the relevant range of production.

2. An income or benefit that is given up when one alternative is selected over another is called
a. Loss c. relevant cost
b. Opportunity cost d. differential cost

Items 3 to 7 are based on the following information:

Maco Corporation’s and Development Department was able to develop a new product- a flashlight
powered by solar energy. After reviewing the data prepared by the company’s controller, Maco’s
management is confident that the new product will contribute profit to the company.

The data prepared by the controller are as follows:


Suggested selling price P200
Costs: Materials 60
Parts fabrication (P10 per hour) 40
Assembly (P6 per hour) 18
Variable overhead (P4 per hour) 28
Fixed overhead (P3 per hour) 21
Total cost P167

The total research and development costs incurred to develop the new product amounted to P200,000.
The company is planning to spend half of this amount for promotion and advertising.

The company’s fixed overhead includes rent, equipment depreciation, and salaries of factory supervisors.

3. For Maco’s new flashlight, total prime cost amount to

4. The difference between the flashlight ‘s suggested selling price of P200 and the total cost of P167
represents each flashlight’s
a. Gross profit b. Contribution margin c. net profit d. operating income

5. The total overhead cost of P49 per unit is a


a. Prime cost b. variable cost c. mixed cost d. fixed cost

6. The total research and development cost of P200,000 incurred to develop the new product is a(n)
a. Relevant cost b. sunk cost c. avoidable cost d. postponablecost

7. The cost included in Maco’s fixed overhead are


a. Prime cost b. discretionary cost c. committed costs d. variable cos
t
8. The planning spending on promotion and advertising for the flashlight is a
a. Variable cost b. discretionary cost c. sunk cost d. past cost
9. In a contribution income statement,
a. Cost are classified as to function
b. Fixed and variable manufacturing costs are combined as one level items
c. Fixed costs are shown separately from variable costs.
d. Fixed manufacturing costs are shown separately from variable manufacturing costs, but fixed and
variable operating costs are combined as one line item.

10. Which of the following is not correct? At break-even,


a. Profit equals zero c. sales equals total costs
b. Gross profit equals zero d. fixed costs equals contribution margin

Items 11 to 22 are based on the following informations:


GSA Corp. produces and sells a single product. The selling price is P25 and the variable cost is P15 per
unit. The corporation’s fixed costs is P100,000 per month. Average monthly sales is 11,000 units.
11. The corporation’s contribution margin per unit and as a percent of sales (CMR) is
12. The corporations break-even point in peso and in units
13. If the corporation desire to earn profit of P20,000 before tax, it must generate sales of
14. If the corporation pays corporate income tax at the rate of 30% and it desire to earn after tax of
P21,000, it must generate sales of
15. How much sales (in pesos) must be generated to earn profit that is 8% of sales?
16. How many units must be sold to earn profit of P2 per unit?
17. With the average monthly sales of 11,000 units, the corporation’s margin of safety is
18. The margin of safety ratio and the break-even point sales ratio are
19. At the present average monthlysae sales level of 11,000 units, the corporation operating leverage
factor is
20. If the cost will increase by P20,000, the break-even point in units will increase(decrease) by
21. If variable cost per unit will go up by P5, the break-even sales will increase (decrease) to
22. If selling price will increase to P30, the break-even point, one would expect the degree of operating
leverage to
23. Sunk cost
a. Are relevant cost
b. Can be changed by a decision made now or to be made in the future
c. Are irrelevant for decision-making purposes
d. Are decrease in costs from one alternative to another

24. Which of the following statement is correct?


a. In a variable costing income statement, sales revenue is typically higher than in absorption
costing income statement.
b. When production is not equal to sales, income under absorption costing differs from income
under variable costing due to the difference in treatment (product cost and period cost) of the
fixed overhead cost under two costing method
c. In a variable costing system, fixed overhead cost is included as part of the cost inventory
d. In an absorption costing system, fixed overhead cost is treated as a period cost

25. If production is less than (in units), then absorption costing net income will generally be
a. Greater than variable costing net income
b. Less than variable costing net income
c. Equal to variable costing net income
d. Less than expected

Items 26 and 27 are based on the following information:


Vanessa Corporation produces and sells a single a single product. In 200A its first year of operation,
planned and actual production was 80,000 units. It sold 75,000 of these units for P30 per unit
Planned and actual costs in 200A were as follows:
Manufacturing Non-manufacturing
Variable P480,000 P400,000
Fixed 320,000 240,000
26. Using absorption costing, the company’s operating income in 200A would be
27. Using variable costing, the company’s operating income in 200A would be

Items 28 and 29 are based on the following information:

A company produces and sells a single product. For 200A, its first year of operation, the following were
its planned and actual cost
Planned Actual
Production: 10,000 units 11,000 units

Costs: Per unit Total


Manufacturing:
Variable P48 320,000 P530,000
Fixed 32 320,000 360,000
Non-manufacturing:
Variable 40 400,000 420,000
Fixed 24 240,000 240,000

During the year, the company sold 10,500 units for P150,000 per unit. All variances from standard
manufacturing costs are closed to cost of goods sold at the end of the year.

28. How much were the standard manufacturing cost variance? (Variable and Fixed)
29. The operating income under both absorption and variable methods were:

Items 30 to 32 are based on the following information:


A company sells two products, Products 1 and Products 2. Three units of Product 1 are sold for every two
units of Products 2. Fixed costs is P234,000 per year.

Products 1is sold for P20 per unit and the variable cost indentified with the production and sale of each
unit of the amounts to P20.
30. The weighted-average unit contribution margin is
31. The break-even points in units (Product 1 and Product 2)
32. The weighted-average contribution margin ratio is

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