Jal. “Due ReSlh-The Review Schock of lecounitonay Monegimerd Udrsony October 2017 Batch 24 c MAS Quiz 1 d = INSTRUCTIONS: Indicate the letter-choice that corresponds to your best answer at the desis answér sheet ‘ALLOWED. found ph page 3 of the questionnaire, STRICTLY NO BRASU! (" All-else constant, ifthe selling price increases, ‘a, Total variable costs will be higher than expected . Total contribution margin will be lower than expected ¢.Per-unit contribution margin will be higher than expected 7 Contribution margin percentage will be lower than expected />. Swhich of the following best describes management accounting information? a. Itisreliable and verifiable ‘c._ Itis prepared in accordance with GAAP bb. Itis prepared for sharcholders ¥ 4. itprovides reasonable and timely estimates ~ 7 3, Which of the following costs is treated differently under absorption costing and variable costing? ‘a. Raw materials used in production cc. Straight-line depreciation of office building In the cost formula of the form Y = a+ bX, “b” is the b. Monthly rental of factory equipment~ —d. Straight-line depreciation of delivery vehicle. A, a. Cost driver c. Slope of the costing # Dependent variable 4. Variable component of the total costs s. Gta do you call a person who is qualified by education, experience, technical ability and vemperament 10 oC besincssinen on a professional basis in identifying and solving management problems? ‘a. Management Consultant’ “ ¢c, Business Speci b. Management Accountant 4. Certified Public Accountant /o, Which of the following is a characteristic of a contribution income statement? ‘a. Fixed and variable expenses are combined as oncline | ¥ b. Fixed expenses are listed separately from variable expenses “ c. Fixed and variable manufacturing costs arc combined as one line ~ pxpenses are shown-separatcly from variable.operating expenses. “ d. Fixed and variable. operating expenses “aré. combined “as -onefine~item,bat fixed... vranufacturing expenses are shown separately fron variable manufacturing expenses 7. Wkat equation is used inthe least-squares regression method of segregating variable and fixed costs? . a. Sy=nat+bie % | Ixy=na+b Ex b. Dy=alx+bix d. Sxy=alx+b yx 4 X & CPAs are ina more advantageous position than mezabers of other professions to render MAS beegyse a ane CPA is already familiar with the client's business and enjoys the clisnt’s confiden , but fixed operating b.: Most CPAs are highly ediicated compared to other business advisors ze “ ACBA is a person with recognized standing Y d. ‘Only CPAs may render MAS ‘What is most likely an example of a committed fixed cost? a. Taxes on real estate 7 Public relations | Management development programs —_d.__ Advertising programs 10, Breakeven analysis assumes that over the relevant range 2. Unit variable costs are unchanged Y'. .- Total costs are unchanged : ‘Total fixed costs are nonlinear . Unit revenues are nonlincar 11, As one variable increases, the another variable increases. The value of correlation coefficient (2) is most likely a. 0.01 c. -99% bd. 99% a -0.01 "12, Management accourging is used by an entity's management for a multitude of purposes that do not include a a. Marketing, cc, Evaluation . b. Control d. Reporting 13, Inventoriable costs ‘a. Arc regarded as assets before the products arc sold me b. Include only prime costs of manufacturing a product ¢._ Include only the conversion costs of manufacturing a product - Are expensed when products beconic part of finished goods inventory 14. In contrast to the position of a treasurer, the controlicr is primarily. a, Line function © Managerial position b. Staff function / G,. Rank-and-file position Page 1 of 4 pages aRSU- The Review Schoot of Decormeitamey, MAS Quiz 1 eee MAS ~01, 02,03, & 8 (October 2017 Batch} . 15. Cost drivers are : a. Accounting techniques used to control costs b. Activities that cause costs to increase as the activity increases. ¥ ‘©. Accounting’ measurements used to evaluate whether or not performance, is proceeding according to plan dA mechanical bas footage of factory, used to assign costs to activities X16. ACPA should reject management advisory services (MAS) engagement if a. The proposed engagement js not accounting rlated b. Hisrecommendations arc to be subjected to a review by the client < ¢. It would fequire him to make management decisions for an audit client He audits the financial statements of a subsidiary of the prospective client 17. Using the variable costing method, which of the following costs arc assigned to inventory? a. Variable selling and administrative costs (I'S); variable factory overhead costs (YES) b. Variable selling and administrative costs (YES); variable factory overhead costs (NO) c. Variable selling and administrative costs ($0); variable factory overhead costs (YES) ~ 4. Variable selling and administrative costs (NO); variable factory overhead costs (NO) 18. Multiple regression analysis involves studying how a. One variable reacts to many variables’ c, Many variables react to many variables b. One variable reacts to another variable ° “d. Many variables react to only one variable 19. Management is considering replacing an existing fixed salary plan to sales commission compensation plan. , such as machine hours, computer time, size of equipment, oF square If the change is adopted, the company’s ww 3 a. , Profit must decrease ©. Margin of safety must increase G@ FF vA b. Bicakeven point must decrease / —d._ Operating leverage must decrease 3 20. How will an unfavorable volume variance affect jirofit under I) absorption costing & II) variable costing? a. * I) noeffect ID) increase c. 1) inercase TI) no effect 3 b. Ino effect il) decrease d. 1) decrease [1) no effect ~ 21. Ayala bas thie following cost components for 100,060 units of product for the year: Raw materials _-P200,000 —— se a Deoblaboe a 10,000 Eee ‘Manufacturing overhead 00,000 “HE Selling/Administrative expense 150,000 “Wt Ail costs are variable except for P 100,000 of manufacturing ovethead and P 100,000 of selling and + administrative expenses. What are the total costs to produce and sell 110,600 units for the year? a. P540,000 : ¢. P.695,000 b. P.650,000 a P715,000 & — 22. Trinoma Company uses an annual cost formula for overhead of P 72,020 + P 1.60 for cach direct labor hour worked, For the upcoming month, Trinoma plans to manufacture 95.000 units, Each unit required five minutes of direct labor. What is Frinoma Company’s budgeted overhead for the month? a. P.12,800 © P 84,800 b. 218,800 d,_P-774,000 The controller of Glorictta Co. has requested an estimate of the manufacturing supplics necded for the month of July when production is expected to be 476,000 units to mect the ending inventory requirements and sales of 475,000 units. Gtorictta’s budget analyst has the following actual data for thc last 3 nrofiths: Month Production in Units Manufacturing Supplies March 50,000 723.060 April 40,000 853,560 May ? 480,000 766,560 __ Using the high-low method, what would be the estimate of the needed manufacturing supplies for July? a. P652,500 e. P749,180 , b. P681,500. dP 752.060 — 24: In its first year of operations, GB Company produced 100,000 and sold 80,000 units of its only product: : Manufacturing costs Fixed. P'180,000 - Variable 160,000” Selling and administrative costs Fixed 90,000 Variable 40,000 How miuch lower would GB's protit be if it used variable costing instead of full costing? a. P36,000 cc. P.68,000 v . b. P54,000 d. P-94,000 1 Page 2 of 4 pagesRSM. The Review School of Acconctoncy . MAS Quiz 1 ‘Topics Covered: MAS ~01, 02, 03, A & B (October 2017 Batch) 25, Marquee, Inc. involved in selling bar soaps. During, 2017, 100,000 bars were:sold for a price of P 11.20. ‘This amount of siles generated carnings betore interest and taxes of P 200,000. Supposed that the 2017 degree of operating leverage is 3.2 times, what shoul! be reported by Marquee Company as variable expenses in the Cost-Volume-Profit (CVP) income stateznent? ‘a. P480,000 7 ©. P'500,000 b. P-500,000 d. P.649,000 Items 26 to 29 are based on the following information ‘Uptown Corporation manufactures and sells T-shirts imprinted with college names and slogans. Last year, the shirts sold for P 7.50 each, and the variable cost to manufacture them was P 2.25 per unit. The company needed to sell 20,000 shirts to break cven. The uct after-tax income last year was P 5,040. Uptown’s ‘expectations for the cotning year include the following: + The sales price of the T-shirts will be P 9. ariable costs to, manufacture will increase by one-third. ixed costs will increase by 10%. J «The income tax rate of 40% will be unchanged. 26, Whiat is the selling price that would-maintain the same contribution margin rate as last year? a. P 10.00 7 c.' B9.00 b. P9.75 d.. P8.25 27, What is the number of T-shirts Uptown must scll to break even in the coming year? a. 17,500 e. 20,000 ue b. 192500 a. 22,0007 228. Sales for the coming’ year are expected to exceed last yeus’s by 1,000 units If this occurs, Uptown’s sales volume in the coming year will be a, 23,400 units 21,960 units be 22,600 units ~ 21,000 units 2 26..1f Uptown Corporation wishes to eam P 22,500 in pist-tax income for the Coming year, the compariy’'s sales volume in pesos must be a. P-207,000 e. P220,5007 Cc BPI TSE a ERASERS ee 8 kre is X30, Rockwell Company manufactures a single product. Variable production costs are and fixed production costs are P 75,000. Rockwell uses anormal activity of 10,000 units to set lard costs Rockwell began the year with no inventory, produces! 12,000 units and sold 10,500 units, . What is the wR ‘ending inventory under the absorption costing? PRIS P24375 ~ b. P8750 4d P26250 ¢ 31. Market Company produces and sclls only two products, Yang and Yin. 3 units of Yang are sold for every 2 units of Yin, Variable costs as a percentage of'sales in pesos are 60% for Yang and 85% for Yin, Total fixed cost is P 150,000. If the total fixed cost of Market Company will increase by 30% next period, what amount of sales wauld be necessary for Yang to break-even? ‘a, P 111,429, c. 390,000 b. “P 260,000 — di P.650,000