Question 3

QUIZ 1 – CVP
In the variable costing income statement, which
ANALYSIS, VARIABLE & line separates the variable and fixed costs?

ABSORPTION Select one:

a. product contribution margin

Question 1
b. general and administrative expense
If all goes according to plan except that unit
variable cost falls, c. selling expenses

Select one: d. total contribution margin

a. total contribution margin will be lower than Question 4

expected.
Which formula gives the sales Pesos required to
b. the contribution margin percentage will be earn a target profit? (P = selling price, V =
lower than expected. variable cost per unit, F = total fixed costs, T =
target profit)
c. per-unit contribution margin will be lower
than expected Select one:

d. profit will be higher than expected. a. (F + T)/(P)

b. F + T/V

Question 2 c. (F + T)/[(P - V)/P]

The margin of safety is d. F/[(P - V)/P]

Select one: Question 5

a. the ratio of contribution margin to variable If a company is operating at a loss,

cost.
Select one:
b. the difference between current sales and
a. fixed costs are greater than sales.
sales at break-even.
b. selling price is less than average total cost
c. the difference between contribution margin
per unit.
currently earned and contribution margin
c. selling price is lower than variable cost per
at break even.
unit.
d. the profit currently earned in excess of the
d. fixed cost per unit is greater than variable
target profit.
cost per unit.
Question 6 Question 9

If a firm produces more units than it sells, If all goes according to plan except that total
absorption costing, relative to variable costing, fixed costs rise,
will result in
Select one:
Select one:
a. total sales will be lower than expected.
a. higher income and assets.
b. income will be higher than expected.
b. lower income and assets.
c. total contribution margin will be lower than
c. higher income but lower assets. expected.

d. lower income but higher assets. d. income will be lower than expected.

Question 7 Question 10

At the break-even point, total contribution As volume increases, average cost per unit
margin is
Select one:
Select one:
a. increases.
a. equal to total variable costs.
b. increases in proportion to the change in
b. equal to total fixed costs. volume.

c. zero. c. decreases.

d. equal to total costs. d. remains constant.

Question 8 Question 11

Over the relevant range, total revenues and Variable costing has an advantage over
total costs absorption costing for which of the following
purposes?
Select one:
a. all of the answer
a. remain constant.
b. determining the CVP relationship among the
b. can be graphed as straight lines. major factors of selling price, sales mix, and
c. decrease. sales volume
d. increase, but at a decreasing rate
c. analysis of profitability of products, c. P11.30
territories, and other segments of a business
d. P11.55.
d. minimizing the effects of inventory changes
on net income
Question 13

The following information is available for Ford

Question 12
Company for its first year of operations:
Langley Corporation has the following standard
Sales in units
costs associated with the manufacture and sale
of one of its products: 5,000

Production in units
Direct material
P3.00 per unit 8,000

Manufacturing costs:
Direct labor
2.50 per unit Direct labor P3
per unit
Variable manufacturing overhead
1.80 per unit Direct material 5
per unit
Fixed manufacturing overhead
4.00 per unit (based on an estimate of 50,000 Variable overhead 1
units per year) per unit
Variable selling expenses Fixed overhead
.25 per unit P100,000
Fixed SG&A expense Net income (absorption method)
P75,000 per year P30,000
During its first year of operations Langley Sales price per unit
manufactured 51,000 units and sold 48,000. The P40
selling price per unit was P25. All costs were
equal to standard. Refer to Ford Company. If Ford Company had
used variable costing, what amount of income
Refer to Langley Corporation. Under absorption before income taxes would it have reported?
costing, the standard production cost per unit
for the current year was a. P30,000

Select one: b. (P7,500)

a. P7.30. c. P67,500

b. P13.05.
d. can't be determined from the information
given

Question 14

All else constant, if the selling price falls,

Select one:

a. total variable costs will be lower than

expected.

b. total contribution margin will be higher than

expected.

c. contribution margin percentage will be higher

than expected.

d. per-unit contribution margin will be lower

than expected.

Question 15

Which of the following decreases per-unit

contribution margin the most for a company
currently earning a profit?

Select one:

a. A 10% decrease in selling price.

b. A 10% increase in fixed costs

c. A 10% increase in fixed cost per unit.

d. A 10% increase in variable cost per unit

 QUIZ 2 – JOB ORDER
Question 3
COSTING Pen Pineapple Apple Pen Co. distributes service
Question 1 department overhead costs based on the
algebraic or reciprocal method. Information for
In a job order costing system, when cleaning the month of January is presented as follows:
supplies previously issued to the factory are
returned to the storekeeper, the journal entry
to be made is?

Select one:

a. A debit to Materials and credit to Factory

Overhead
What would be the formula to determine the
b. A debit to Factory Overhead and credit to total fruit-polishing costs?
Work in Process
Select one:
c. A debit to Purchase Returns and credit to
a. F = P 9,000 + 0.20I
Work in Process
b. F = P18,700 + 0.10I
d. A debit to Materials and credit to Work in
Process c. F = P27,700 + 0.40A + 0.40P

d. F = P18,700 + 0.30I + 0.40A + 0.40P

Question 2

What is the relationship between contribution Question 4

margin and gross profit?
Cullano uses direct labor-hours in its
Select one: predetermined overhead rate. At the beginning
of the year, the estimated direct labor-hours
a. Contribution margin is generally equal to
were 21,800 hours and the total estimated
gross profit in the same accounting period
manufacturing overhead was $497,040. At the
b. Contribution margin is generally higher than end of the year, actual direct labor-hours for
gross profit in the same accounting period the year were 21,500 hours and the actual
manufacturing overhead for the year was
c. Contribution margin is generally lower than $492,040. Overhead at the end of the year was:
gross profit in the same accounting period
Select one:
d. It depends upon the nature and relative
amounts of the different costs incurred for a a. $6,840 underapplied
given period
b. $6,840 overapplied Question 7

c. $1,840 overapplied In the Lopo Company, any over- or

underapplied overhead is closed out to Cost of
d. $1,840 underapplied Goods Sold. Last year, the company incurred
$27,000 in actual manufacturing overhead cost,
and applied $29,000 of overhead cost to jobs.
Question 5 The beginning and ending balances of Finished
Goods were equal, and the Company's Cost of
Which of the following is true regarding a cost
Goods Manufactured for the year totaled
driver?
$71,000. Given this information, Cost of Goods
Select one: Sold, after adjustment for any over- or
underapplied overhead, for the year must have
a. More cost drivers means lower costs per unit been:

b. More cost drivers means higher costs Select one:

c. None of the answer a. $73,000

d. Both are correct answer b. $69,000

c. $98,000

Question 6 d. $71,000

The difference between overhead applied and

actual overhead is…
Question 8
Select one:
Which of the following does not belong to the
a. closed to cost of goods sold at the end of the group?
production of each completed job
Select one:
b. added to or deducted from the cost of
production for the period a. Bananas sold by the wet market vendor

c. charged to the work-in-process account b. Lemons used to prepare a pitcher of

pertaining to the specific department or job lemonade

d. added to or deducted from the cost of goods c. Mangoes used to make mango graham cake
sold for the period
d. Grapes used to manufacture wine
Question 9

If a manufacturing firm is not strictly suited for

job-order costing nor process costing, what
should it do?

Select one:

a. Create a system which incorporates ideas

from both systems

b. Use process costing by default

c. Use the system between the two that it most

resembles

d. Use job-order costing by default

Question 10

Factory employees’ income taxes when

remitted by the employer in favor of the Bureau
of Internal Revenue are usually accounted for
by the company as?

Select one:

a. None of the answer

b. Direct labor

c. Administrative costs

d. Factory overhead