1. EVEREST Company has estimated the following cost formula for overhead.

Expenses Cost Formula

Lubricants Php7,245 plus Php0.60 per machine hour
Utilities Php9,660 plus Php0.72 per machine hour
Depreciation Php4,830
Maintenance Php966 plus Php0.12 per machine hour
Machine setup Php0.36 per machine hour

If the company expects to incur a total of 1,500 machine hours, what would be the expected
cost?
A. 24,435
B. 25,401
C. 24,321
D. 14,661

2. Proficient Corporation has a sales goal of Php500,000 for the coming year. Based on this level of
activity, Proficient budget its total expenses at php450,000. Actual sales are Php480,000 and
actual costs are Php460,000. Proficient Corporation’s operations were
A. Both efficient and effective C. Efficient but not effective
B. Neither efficient and effective D. Effective but no efficient

3. An item whose entire amount is usually a differential cost is

A. Factory overhead C. Conversion Cost
B. Direct Cost D. Period Cost

4. A company has unit sales of 300,000, unit variable cost of Php1.30 , unit sales price of Php2.00 and
an annual fixed costs of Php60,000. What is the contribution margin ratio?
A. 35% B. 25% C. 65% D. 60%

5. In CVP analysis, which of the following is not assumed to be constant?

A. Sales Mix B. unit VC C. Unit selling price D. unit FC

6. Management Accounting is
A. is concerned only with monetary information.
B. is focused on business as a whole rather than on segments of the business.
C. is governed by GAAP.
D. is discretionary rather than mandatory.
 7. Statement 1: Under ABC, overhead costs are allocated to products using single cost driver
associated with the identified cost tools.
Statement 2: Volume Variance is actually the fixed volume variance, there is no such thing as a
variable volume variance or variable capacity variance.
A. Both statement are correct.
B. Neither statement is correct.
C. Only statement 1 is correct.
D. Only statement 2 is correct.

8. Under standard costing, __________ is likewise referred to as the applied factory overhead.
A. Actual FOH B. Standard FOH C. Budgeted FOH D. None

9. A functional classification of costs would classify “ depreciation on factory equipment” as a

A. gen and admin expense B. selling expense C. variable cost D. product cost

10. Prime costs of a company are Php3,000,000, manufacturing overhead is Php1,500,000 and direct
labor is Php750,000. What is the amount of direct materials?
A. Php1,500,000.
B. Php750,000.
C. Php2,250,000.
D. Cannot be determined from the information provided.

11. A manufacturing company calculates cost of goods sold as follows:

A. Beginning FG inventory + cost of goods purchased – ending FG inventory.

B. Ending FG inventory – cost of goods manufactured + beginning WIP inventory.

C. Beginning FG inventory – cost of goods manufactured – ending FG inventory.

D. Beginning FG inventory + cost of goods manufactured – ending FG inventory.

For items # 12- 13.

Craft Manufacturing Company's accounting records reflect the following inventories:

Dec. 31, 2002 Dec. 31, 2001

Raw materials inventory Php310,000 Php260,000

Work in process inventory 300,000 160,000

Finished goods inventory 190,000 150,000

During 2002, Php500,000 of raw materials were purchased, direct labor costs amounted to Php600,000,
and manufacturing overhead incurred was Php480,000.

12. The total raw materials available for use during 2002 for Craft Manufacturing Company is

A. 810,000.
B. 260,000.
C. 450,000.
D. 760,000.

13. WarCraft Manufacturing Company's total manufacturing costs incurred in 2002 amounted to

A. 1,530,000.
B. 1,490,000.
C. 1,390,000.
D. 1,580,000.

14. Nevermore company has unit sales of 300,000, unit variable cost of Php1.50, unit sales price of
php2.00 and an annual fixed costs of Php50,000. Furthermore, the annual interest expense is
Php20,000 and the company has no preferred stock. Accordingly, the degree of combined
leverage is
A. 1.875
B. 1.50
C. 1.25
D. 1.35

15. Mirana Manufacturing Company reported the following year-end information:

Beginning work in process inventory Php300,000

Beginning raw materials inventory 100,000
Ending work in process inventory 360,000
Ending raw materials inventory 160,000
Raw materials purchased 320,000
Direct labor 300,000
Manufacturing overhead 200,000

Mirana Manufacturing Company's cost of goods manufactured for the year is

a. 760,000.
b. 820,000.
c. 700,000.
 d. 880,000.
16. Total production cost for Glory Inc. are budgeted at Php300,000 for 25,000 units of budgeted output
and Php370,000 for 30,000 units of budgeted output. Because of the need for additional facilities,
budgeted fixed costs for 30,000 units are 30% more than budgeted fixed costs for 25,000 units. How
much is Glory’s budgeted variable cost per unit of output?
A. Php1.60 B. Php5.00 C. Php3.00 D. Php8.00

17. In CVP analysis, changes in this area will have no bearing

A. Financial Personnel Structure C. Labor Productivity

B. Market Condition D. Production Technology

18. Lanaya Electronics Inc. had the following sales results for 2017.

TV sets CD player Radios

Peso sales component ratio 0.40 0.30 0.30

Contribution margin ratio 0.30 0.25 0.35

Lanaya Electronics Inc. had fixed costs of Php2,400,000.

The break-even sales in pesos for Lanaya Electronics Inc. are:

TV sets CD player Radios

A. 3,200,000 2,400,000 2,400,000
B. 2,000,000 1,500,000 1,500,000
C. 1,500,000 1,500,000 2,000,000
D. 1,531,915 1,531,915 2,042,553

19. If there is an increase in selling price, then Fixed cost tends to

A. Increase C. Remain constant
B. Decrease D. Increase in proportion to the selling price percentage increase

20. Slark Co. uses a standard costing system in connection with the manufacturer of a line of T-shirts.
Each unit of finished product contains 2.1 yards of direct materials. However, a 10 percent direct
material spoilage calculated on input quantities occurs during the manufacturing process. The cost of
the direct materials is P150 yard. The standard direct material cost per unit of finished product is
A. Php350 B. Php320 C. Php283.5 D.Php300

21. The distinction between direct and indirect costs depends on whether a cost
A. is controllable or non-controllable
B. is variable or fixed
C. can be conveniently and physically traced to a cost object under consideration.
D. will increase with changes in levels of activity.

22. A unfavorable price variance occurs because of

A. Price decrease for Raw materials.
B. Price increase for Raw materials.
C. Less-than-anticipated levels of waste in the manufacturing process.
D. More-than-anticipated levels of waste in the manufacturing process.

23. The standard unit cost is used in the calculation of which of the following variances.

Materials Price Variance Materials Usage Variances

A. No Yes
B. Yes No
C. No No
D. Yes Yes

24. Which department is customarily held responsible for an unfavorable materials usage variance.
A. Purchasing C. Production
B. Engineering D. Quality Control

25. If a company follows a practice of isolating variances as soon as possible, the appropriate time to
isolate and recognize a direct material variances is when
A. Materials are issued C. Materials are purchased.
B. Materials are used in production D. The purchase order originates.

26. Which of the following objectives is not primary purpose of preparing a budget?
A. To provide a basis for comparison of actual performance.
B. To communicate the company’s plans throughout the entire business organizations.
C. To control income and expenditures in a given period.
D. To make sure the company expands its operations.

27. The master budget process usually begin with the

A. Production Budget C. Financial Budget
B. Operating Budget D. Sales Budget

28. Given the following event, which affect cash flow from operations?
I. Cash sales
II. Cash dividend paid
III. Purchase of long-term asset
IV. Purchase of inventory
V. Paid employees
 A. I and V C. I, II and V
B. I, III, IV and V D. I, IV, and V

29. Invoker Co. uses an annual cost formula for overhead of Php72,000 + 1.60 for each direct labor hour
worked. For the upcoming month, Invoker Co. plans to manufacture 96,000 units. Each unit requires five
minutes of direct labor. Invoker Co.’s budget for the month is
A.Php84,800 B. Php12,800 C.Php774,000 D. Php18,800

30. The Goodwill Co. has the following historical pattern on its credit sales:
70% during month of the sale
15% in the first month after sale
10% in the second month after sale
4% in the third month after sale
1% uncollectible

The sales on account of the last six months of the year were reported as follows:
July Php120,000
August 140,000
September 150,000
October 180,000
November 200,000
December 170,000

Cash collections in October amounted to

A.Php168,800 C. Php167,300
B. Php41,300 D. Php126,000