CPAR CPA REVIEW SCHOOL OF THE PHILIPPINES Manila MANAGEMENT ADVISORY SERVICES ‘Saturday, July 28,2018 First Pre-board Examination 4:30 pm to 4:30 pm Set A Instructions. Choose the BEST answer for each of the following items. Mark only one answer for each item on the Special Answer Sheet provided, Strictly no erasure allowed. Use Pencil No. Loniy. A. All of the folowing are compiementary goods except x a. Margarine and butter ¢. Toothbrush and toothpaste b. Pen and paper d. Razors and razor blades Items 2 and 3 are based on the following information: Keren Panday wents to establish an environmental testing company that would specialize in evaluating the quality of water found in rivers and streams. However, Panday has discaverad that she needs either certification or approval from five separate local and state agencies before she can commence business. Also, the necessary equipment to begin would cost several million dollars. Nevertheless, Panday believes that if she is able to obtain capital Tesources, she can gain market share from the two major competitors. 2, The large capital outlay necessary for the equipmentiis an example of a(n) a. Entry barrier. ¢, Created barrier, b. Minimum efficient scale. d.) Production possibility boundary. 3. ‘The market structure Karen Panday is attempting to enter Is best described as a. A natural monopoly. <. anoligopoly b. acartel. monopolistic competition sam company has fixed costs of p280 it produces two products r and m. product variable cost percentage equal to its p10 per unit selling price. m p30 for the pest several years sales averaged nf ratio is not expected change. how many units will sell at break-even point a. x dy ve ee items are based on following: mr. aldito antonio considering investing in vending machine operation involving machines located various malls around city. manufacturer reports that similar routes have produced a volume ranging from month. following information made avallable evaluating possible profitability an investment be required p7 merchandise p18 i service life five no salvage value end period. depreciation computed straight line basis. c. retalls average p0.15 po.06 d ovmers building which paid commission candy sold. one man hired machines. he p700 other expenses estimated p200 these do vary with number sold advisory services july first preboard examination page month _ b what mont necessary produce retum before taxes during his year operations d. _-7 iintonio offering owners flat rental p15 lieu f0.03 effect would this change monthly terms increase by decrease units. cannot determined given ms client asked intemal contro system evaluation. eveluation practitioner suggests certain changes hardiing some accounts. dient agrees. however reouests former consultant supervise installation knows such lacks sufficient experience provide technical direction supervision case should tell cient everything about so could prevented frorn supervising instaltation. prevent corgultent but anything capabilities. encourage ettend seminar workshop learn basics engagement cecline if insists instatiation conipetence provided even through means. financial accounting sules reoulations niust followed statements inust presented readers. managerial restrictions generally apply because entirely different fieki reed observe broad guidelines accounting. designed management non-fiencta decision-making. fnencial data assist making business decisions adiscipline does require preparation staternents. an-activity adds or make more veluubie customers called non-alue edding activity. costly activity value-adding valuable inventorlable charged expense when become part finished goods inventory. include only prime producing product. cc. treated as assors tiie . conversion th decision-making ourpeses relevant past costs. firet pro-board all anticipated future differ among alternatives. incurred within range production. information: study cast accountant shinly corporation recorded seven levels materials usage. records show kilos ic p multiplied sum squared using high low points method formula may expressed as: total under least squares projected af high-low used. p880.00 p886.90 p8b0.00 regardless used abc grouped pools then allocated common allocation base ordinarily driver. denominator systematically correlating indirect object. homogeneous pool non-financial measure objective. cause-and-effect relationship g. assign uniformly objects use resources behavior analysis linearity assumption states cases there strict linear between crawn graphically lines. pre-board pago owner kuykuy concerned increased flxed manufacturing last were p600 p150 administrative p540 same both years. operated contribution margin percent. earned profit income p910 year. much revenue comparly eam did tos co p5 ys rats> b, 500,000 “a. P2,200,000.00 7 19. Blow Co.’s 2018 fixed manufacturing ovethead costs totaled P50,000, and variable selling costs totaled P40,000. Under absorption costing, how should these costs be classified? Period costs Product costs a. PO 90,000 (b,) —P-40,000 50,000 © 50,000 40,000, é.——_P30,000 Po 20.At the end of Vicky's first year of operations, 1,000 units of, inventory remained on hand. Variable and fixed manufacturing costs per unit vere P90 and P20 respectively. Based on these data, which of the following is correct? ’,..Income figures under both the absorption and variable costing methods are the same. b. IF Vicky Uses absorption costing rather than varlable costing, the result would be 2 higher pretax income by P20,000. If Vicky Uses absorption costing rather than variable costing, the result would be @ lower pretax income by P20,090. d. If Vicky uses absorption costing rather than variable costing, the result would be @ higher pretax income by P90,000. +» 21. Apple Co. has fixed costs of P200,000 and breakeven sales of P1,600,000. What is the projected profit at P2,400,000 sales? x 2 GL i cc, P800,000 cr 'b. P300,000 d. P100,000 Biv 22. Historical experience, engineering studies, and input from operating personnel are’ three = potential sources for quantitative standards. Although historical experience may provide an initial guideline for setting standards, it should be used with caution because a. most companies have very poor records. ,) ideal standards are better than historical standards. , they may not be achievable by operating personnel. d, they may perpetuate operating inefficiencies. ITEMS 23 TO 25 ARE BASED ON THE FOLLOWING: PSs hy WG “The following information is avaliable for Athena Co. for its first year of operations: Sales In units 5,000 Production in units 8,000 D oof Manufacturing costs: 4 at aa Prime cost PS per unit / ; = Variable overhead Lper unit ¢* 5 Fixed overhead 100,000 Net income (absorption method) 30,000 ‘Sales price per unit P40MANAGEMENT ADVISORY SERVICES. Saturday, July 28, 2018 First Pre-board Sxamination Page § of 12 ITEMS 30 TO 34 ARE BASED ON THE FOLLOWING: Vhong, Inc. evaluates manufacturing overhead in its factory by using variance analysis. The following information applies to the month of July: ACTUAL BUDGETED Number of units produced 19,000 20,000 _. Variable overhead costs 4,100 P2 per direct labor hour Fixed overhead costs 22,000 20,000 : Direct labor hours 2,100 0.1 hour per unit) rev ~ 30, The controllable Variance amounts to @. P2,500 unfavorable ¢. P2,300 unfavorable b. P1,000 unfavorable d,_ P2,000 unfavorable, 0 311, Using the three-way variance analysis, the spencing variance amounts to 2, P100 favorable c. P2,000 unfavorable b, P1,900 unfavorable d. P2,100 unfavorable efficiency variance amounts to Gat Pa00 unfavorable © P40 favorable r b, P1,900 unfavorable d. P1,000 unfavorable 33. The non-controllable variance is / 2. P2,300 unfavorable c. P2,000 unfavorable b. P40 unfavorable @} 1,000 unfavorable 34. The fixed overhead efficiency variance Ist a, P400 unfavoral P409 favorable b, PP2,000 unfavorsble ao p 35. The Accessores Department shows sales of P35,000. Variahle casts are_P30,000 and allocated navoiede fied costs are 9,000, leavirg 2 F4,000 lass, Based| on this information and all other things ecu: a. the department cor es P35,000 to tera! profits. vs b. dropping tie departient will reduce total camoanyy profits by P5,C00, Ge the department shouki be closed. (dy) the department sould be kepy only unit voluma can be increased enough to” increase soles by P4,000, 36, Jesse Company has 200 Was R10 per unit. They of an obsolete component. The variable cost to produce them now be sold for Pi,75 euch ane it would cost P7.60 to make them now. If the units could be used to miake a product for 2 spacial order, their relevant costs: - a. P75. c. P10.00. lo BoP 7.60. Gi some otner number. 32 DSP Company earned P100,000 sn sales ef 1,000,000. It earned P130,000 on sales of ~~ PAd00,000, Coniriuien margit as a parcentage of sls is comers Ut ) 30%. ©. 70%. ve B40, 9, 90%, 38. In a global economy, a a, the trade of goods and services Is facussd on trade belwean or among countries on the same continent. the international moveiient of labor 's probibited except for muitilinguel persons, the internistional flows of cepitel and informaton ere common all of the ebove hagpen in 2 global economy. absMANAGENENT ADVISORY SERVICES Solurday, July 28, 2018 Firat Pre-boars Examination Page 6 of 12 23. What would Athena Co. have reported as its income before income taxes if It had used Variable costirig? ~~ 30,000 c. P67,500 2) (P7,500) , can’t be determined from the given information 24, What was the total emount of SG&A expense incurred by Athena X Co.? 2. P30,000 c. P6,000 by 62,500 d. can’t be determined from the given information 25. Based on variable costing, what would Athena Co. show as the value of its ending inventory? a. P120,000 c. P27,000 b.)P 64,500 d. P24,000 26. Using regression analysis, Nasty Company graphed the following relationship of its cheapest product line's sales with its customer's Income levels: Sales Pesos Income levels increasing | If there is a strong statistical relationship between the sales and customers’ income levels, which of ‘the following numbers best represents the correlation coeffident for this relationship? a. +0.93 .) = 0.93 \ b, -9.00 d. +9.00 3.2 at P2.50 per meter. During June, 2018, 4,200 meters of materials costing P10,080 were purchased and used to produce 1,000 units of the product. What was the materials price 27. The standard.direct materials cost to produce a unit of a product is four meters of materials variance for June, 2018? g mo UM @, P480 unfavorable c. PaOO favorable : b, P80 unfavorable d.» 420 favorable 28. Ohjo company iises a standard costing system in connection with the manufacture of a “one size fits all” product made of rubber. Each unit of finished product contains two feet of direct material. However, a 20% direct material spoilage calculated on input quantities occurs during the manufacturing process. The cost of the direct material is P3 per foot. The standard direct materials cost per unit of finished product is: pm- 14+ a. P7.50 Ga, P7.20 b. 6.00 (4) P4.80 29:Tanya Company manufactures one product with a standard direct manufacturing labor cost of four hours at P12.00 per hour. During June, 1,000 units were produced using 4,100 at P12.20 per hour. The unfavoreble direct iabor efficiency variance was: : a, PB20 ¢.P1,200 . b. P400 d. P1,220 Uhe “ewMANAGEMENT ADVISORY SERVICES Saturday, July 28, 2018 First Pre-beard Examination Page 7 of 12 391 If activity-based costing is implemented in an organization without any other changes being effactad, total overhead costs will a. be reduced because of the elimination of non-value-added activities. b. be reduced because organizational costs will not be assigned to products or services. . be increased because of the need for additional people to gather information on cost drivers and cost pools. 4, remain constant and simply be spread over products differently. USE THE FOLLOWING TO ANSWER QUESTIONS 40 AND 41: Belle Corporation manufactures a variety of products. In the past, Belle has been using a traditional costing system in which the predatermined overhead rate was 150% of direct labor cost. Selling prices had been set by multiplying total product cost by 200%, Sensing ‘that this system was distorting costs and selling prices, Balle has decided to switch to an activity-based costing system for manufacturing overhead costs using three activity cost pools. Selling prices are stil to be set at 200% of unit product cost under the new system. Information on these cost pools for next year are as follows: Activity Cost Poot Estimated Activity Estimated Overhead Cost Machine Setups 400 Number of setups 150,000 390 Quality Control 1,500 Number of inspections 180,000 7) Other Overhead 30,000 Machine hours 480,000 te Information (on a per unit basis) related to three populer products at Belle are as follows: a liege Model #58 Direct material cost Direct labor cost ato Number of setups 2. Number of inspections 1 Number of machine hours 4 x 40. Under the tracitional system, what would be the seling price of one unit of Model #362 a, P2,536 (c) P4,080 b. P2,712 d. P5,506 41. Under the ectivity-based costing system, what would be the selling price of one unit of Model #367 a. P2,536 b. P2,712 Dey 42, If a firm produces more units than it sells, absorption costing, relative to variable costing, vill result in ai (a) higher income and assets. . lower income but higher assets. “b. higher income but lower assets. d. lower income and assets. a b. reduce _ increase G. Increase no effect d,> increase reduce 44:Cost behavior refers to: ‘a. how costs react to a change in the level of activityMANAGENENT ADVISORY SERVICES Saturday, July 28, 2018 First Pre-board Examination Page 8 of 12 b, whether a cost is incurred in a manufacturing, merchandising, or service company ¢. classifying costs as either inventoriable or period costs d. Whether a particular expense has been ethically incurred ITEMS 45 AND 46 ARE BASED ON THE FOLLOWING: Kodak Associates produced 12,000 cameras during 2018 although expected. production was ‘only, 10,500 cameras. The company’s fixed overhead rate is P6 per camera. Absorption ‘Costing operating income for the year is P18,000 based on sales of 11,000 units. 45. The production volume variance is: A ono 66002 a. P9,000 unfavorable 9,000 favorable ine : b; 6,000 favorable d. P3,000 unfavorable 2 | aya 46. The variable costing operating income is A a, P24,000 c P-9,000 b, P16,000 4.12000 =, 7 S Nd 47. Which of the following quantitative methods will separate @ seri-variable cost into its fixed and variable coinponents with the highest degree of precision? @. High-low method c. Least squares method b, Simplex method d.) Scattergraph diagram method 48. Water is suppiied by BAYNILAD to Eastern Metro Manila by pumping water from the Novaliches Water Treatment Plant to a storage tark at the highest elevation in the area, from which it then flows to the customers by gravity. The water administrator notes that the costs to pump water vary to some extert by the number of cubic meters pumped, but fixed. costs are also included in ¢rese pumping costs. A record of cubic meters consumed er month and total pumping costs consumed per montir is as follaws: ‘Cubic Meters: Cubic Meters Consumed in Consumed Purping (000) t (000) Cost 4,760 P29,100 4.860 29,700. 4,900 30,800 35,800 ) 2,150 34,000 — 31,800 2,050 32.800 25,51 In addition to pumping costs, P1.10 ger cubic meter in variable cost and P75,0 ‘gots are incurred to sunply water to residents, BAYNILAD cubic meter consuined. 4 At what level of water consuinption would BAYNILAD break-even? v st a 21,508 & 23,220 ae ¢ >) 23,143 a. 67,385 49.1n January, Awo Equipment Company of Cavit2 purchased 50,000 carts at 2 total cost of 600,000, During the monty, 46,000 parts having a standard unit cost of P14 were used in Production. The raaterials usage variance for the month wes unfavorable by P33,000. According to the standards, 5 arts should be used for each unit of product. How many units of product Were produced in January? Ah a. 8,600 Units 10,000 units Thee B)-9,200 units d. 4,000 units 50. In 2019, Gemiel Manufacturing Company plans to operate at normal capacity and 4 Manufacture 400,000 units of product, as in 2018. Sales for 2019 have been estimated at 350,000/cinits, with total revenue at 37,500,000. The cost of the 20,000 units in theMANAGEMENT ADVISORY SERVICES, Saturday, July 28, 2018 First Pre-board Examination Page $ of 12 finished goods inventory on January 1, 2019, was P600,000, Induded in this amount was 400,000 in fixed manufacturing overhead. No changes in fixed manufacturing costs are expected in 2019, and the variable cost per unit of product will also remain unchanged. Which of the following statements Is incorrect? 2. Gross profit undér absorption costing amounts to P7,000,000. b, Operating income under variable costing amounts to P6,000,000. Overhead capacity variance amounts to P1,000,000 unfavorable, ‘¢. The company’s finished goods inventory increased by 50,000 units. 51, Following are among the aclvantages claimed for standard costing except: 2, Standard costing helps establish control over costs. by It provides information useful in budgeting, It motivates employees to accomplish established goals. d._ Itsoives the period cost - product cost controversy. 52. Fermin has noticed a demand for small tables for personal computers and printers. Retail office furniture outlets are charaing from P400 to PH00 for a table. Fermin believes that he can manufacture and sell an attractive small table that will serve the purpose for P2L0. The costs of materials, labor, and variable overhead per table are estimated at P110. The fixed costs consisting of rent, insurance, taxes, and depreciation are estimated at 25,000 for the year. He already has orders for 180 tables and has established contacts that should result In the sale of 150 additional tables. By. how many units must Fermin exceed his break-even point if he to eam pretax profit of P11,000? ie res a. 360 c 110 b,, 250 4. 171 s 53. It refers to the practice of hiring an outside company to handle all or part of its data processing. . a., Consultancy Technology transfer b, Outsourcing Gd. Make-or-buy analysis 54, Margin of safety ‘a, is the amount of actual or expected sales which can still be decreased without resulting into a loss, b. may be expressed in terms of pesos or in terms of a per unit figure. may be increased by increesing either the expected sales or break-even sales. d._ shows how much sales volume can be reduced without sustaining losses. 55; Peace Inn presently charges P450 per night for a room. The variable cost per room per night has been estimated at P200, Fixed costs for the year have been estimated at 100. The Inn has the capacity to operate at 15,000 room days a year. Room days jal to the number of rooms multiplied by number of days. With the present price structure, the Inn has been operating at only 9,500 room days 2 year. ‘The manager believes that the Inn cannot compete on a service basis with chain motels and Jinns and that occupancy can be increased by reducing the room rate to P300 per night. Should the manager carry out his plan to reviuce the room rate to P300 per night? ‘a, Yes, because the decrease in room rate will increase room occupancy rate. b.) No, because the Inn does not have the capacity to earn a profit with a rate of P200 per night even when operating at 100% capacity. Yes, because If the firm can operate at full capacity, sales volume is greater than the break-even point.MANAGEMENT ADVISORY SERVICES Saturday, July 28, 2018 First Pre-board Examination ‘Page 10 of 12 d. No, because the break-even point at a rate of P300 per night is lower than the Inn's capacity level. 56/4 10% increase in sales due solely to a change in units sold “a. will increase variable cost per unit by 10%. ).) will increase total contribution margin by the same percentage assuming variable cost per unit remains unchanged, ~ . will Increase the contribution margin ratio by 10%. 4. will Increase profit by 10% if variable cost per unit and total fixed cost remain unchanged. 57. Bonita Corporation produces @ product that is sold for P80 per unit. This year the variable cost to produce and sell each unit is P60. Next year, materials and labor costs are expected to increase, so the variable cost per unit will increase by P5. The fixed costs this year are P285,000.and are expected to be the same next year. The president of the company is concerned about the amount of additional sales volume required next year to eam the same pretax profit, which averaged P12 per unit this year. Considering the expected Increase in variable cost per unit, and assuming that the compeny desires to eam the same profit of P12 per unit next year, the company’s sales, break-even sales, and margin of safety wil Sales Break-even Sales Margin of Safety a Not change Not change Not change b. Not change Increase Decrease S Increase Not change Increase a) _ Increase Increase Increase 58. Which of the following individuals would be most hurt by an unanticipated increase in inflation? a. A retiree living on a fixed income. b. A borrower whose debt has a fixed interest rate, . A union worker whose contract includes a provision for regular cost-oftiving adjustments. d)) A saver whose savings was placed in 2 variable rate savings account. 59, Sorbetes, Inc, produces and sells 10,000-gallons-per-month of Dear’s Sweet Ice Cream. Capacity is 12,000 gellons. A supermarket in another city has offered to buy 3,000 gallons of ice cream for P100 per gallon. Sorbetes vould give up some regular seles to fill the new order. Costs and revenues per unit are: Ingredients and labor P 60 Variable overhead 20 Fixed overhead —30 Cost per gallon P10 Sales price P120 What course o1 action should be taken by Sorbetes regarding the. special order of 3,000 gallons? ‘a. Accept the special order because it will increase the company’s profit by P10,000. b. Reject the special order because thercompany will incur loss of P30,000 from such order. c.) Accept the special order even if the cornpany will incur a loss because this will give the ‘company a chance to reduce its idle capacity. d. Reject the special order because this will reduce profit from regular customers by 50,000,(MANAGEMENT ADVISORY SERVICES ‘Saturday, July 28, 2018 First Pre-board Examination ‘Page 14 of 12 60. company had @ highly labor-intensive manufacturing process. Recently it implemented robotics and a number of other technological changes that made the process capital intensive. This automation is expected to a. Increase variable cost b, Decrease total fixed cost ¢. Increase inventory valuation under absorption costing because of higher fixed costs d.) Decrease contribution margin under variabie costing 61-A lender and a borrower signed a contract for a P2,000 loan for one year. The lender asked the borrower to pay 3% interest. Inflation occurred and prices rose by.2%. over the next year. The borrower repaid P1,030. What is the amount worth in real terms, after inflation? a. P1,060.90 c. P1,019.60 b. P1,050.60 d. °P1,009.80 ITEMS 62 TO 64 ARE BASED ON THE FOLLOWING: 1) Corp. produces 50,000 units of Product Q and 6,000. units of Product 2 during period. Jn that period, four sef-ups were required for color chenges. All units of Product Q are black, which is the color in the process at the beginning of the period. A set-up was made for 1,000 blue units of Product Z; 2 set-up was made for 4,500 red units of Product Z; a sei up was made for 500 green units of Product Z. A set-up was then made to retum the process to Its standard black coloration and the units of Product Q were run. Each set-up costs P50. | 62. 1f set-up cost is assigned on a volume basis for the department, what is the approximate per-unit set-up cost for Product Z? Kerns a. 70.010 2 P0.040 oe b. P0.036 ‘d, PO.333 Th 163. If set-up cost is assigned on a volume for the department, what is the approximate per-unft set-up cost for the red units of Procuct Z? = | ‘2. PO.036 . PO.250 b. P0111 d, P1125 64, Assume thet JJ Corp. has decided to allocate overhead costs using levels of cost drivers. What would be the approximate per-unit set-up cost for the blue units of Product Z? a. PO.04 . PO.5O b. PO.25 d. P250 65-One major difference between financial and management accounting is that ‘a. financial accounting reports are prepared primarily for users external to the company. b. management accounting is not under the jurisdiction of the Securities and Exchange ‘Commission. ¢, government regulations do not apply to menagement accounting. d, all of the above are true, 66, Which of the following statements about Management Information System (MIS) Is correct? a, It isa sub-system of the broad accounting Information system. D) It is designed to provide information to both intemal and external users. ¢. Its for internal decision-makers only. d, It must be a computer-based system. 67. Walton Corporation wishes to develop a single predetermined overhead rate. The company's expected annual fixed overhead is 340,000 and its variable overhead cost per machine hour Is P2. The company’s relevant renge Is from 200,000 to 600,000 machine hours. Walton expects to operate at 425,000 machine hours for the coming year. The plant'sMANAGEMENT ADVISORY SERVICES. Saturday, July 28, 2018 First Pre-board Examination, Page 120! 12 theoretical capacity is 850,000. The predetermined overhead rate per machine hour should be. 2.) P2.40 ce P2,80 “i PST Q. P2.85 68. 1f 2 company has a degree of cperating leverage of 2.0 and sales increase by 25%, then @. total variable costs will increase by 50% -~c.__ profit will increase by 20% b. total variable costs will nat change dh prove will increase by 50% | $8. Junie Company sells only two products, Jona and Jano, Jona Jano Tota Selling price 4g P50 Variable cost per unit P24 P40. Total fixed casts 840,000 Junie sells two units of Jona for each unit it sells of Jano. Junie faces a tax rate of 30%. Junie desires a net after-téx income of P73,500. The number of units that must be sold to > earn the desired income: 3. 21,750 units of Jona and 43,500 units of Jano b. 22,500 units of Jona and 45,000 units of Jano (G 43,500 units of Jona and 21,750 units of Jano\, "d, 45,000 units of Jona and 22,500 units of. Jana 1 - 69 1) 70. Mickey is planning to operate a water-refiling station, She is considering two altematives on how to purify water that she will sel. Alterative 1, called Auto Fil is highly automated, Jt will use en expensive machine mat sucks water from the sea, purifies the water, and bottled purified water comes cut, Auto Fill’ casts ere P9,000 per month plus P2 per bottle of purified water, ae ce 2nd manually filtered using old Alternative 2 is calied Sinale Water. Ruimvater is col socks. Sinela Vacer’s costs are P2,009 per month plus P4 ‘The cast pet bottie et the incifference point will be: a. 1,500 = oP b. P5.33 4. The GusCPAR CPA Review School of the Philippines | MANAGEMENT ADVISORY SERVICES JULY 2018 Fist Pre-board Examination - SOLUTIONS Batch 84 4 Contsoution margin per uit (10 x 40%) P4.00 — (P30x30%) P00 | x Sales micratio 40% 80% Composite contribution margin Pi.60 P5.40 = 700 280,000 Sreak-2ven point = = 40.000 composite units P70 Break-even point, Product M = 40,000 x 60% = 26.000 units "Sales mixratoc R= %oiM 5. BEP = P1,200 + 0.06 = 20,000 units Red ens: Desrecton(P18,000- 5 yin) + 200 Sars i Stns me Tel eo cost zim gloat roas Vera oi (0.06 + oy 78 CM/unit ? Pong 8. Desired return (625,000 x 12%) + 12 mos P aso Fixed costs, 1.200 Total Biso + CM/u —0.06 Required sales per month with 12%. ROL 24.187 units 7. New BEP = (1,200 + {15x 50]) + (0,15 ~ 0.05) = 21,667 Old BEP 20,000 Increase In BEP —Lssz 13. HIGH~Low. +21, CMR= 200,000 603,000 = 12.5% VGing = (P 1,280 — F320} + (140 2)-8 C= P2,400,000 » 12.5%, ‘300,000 Feo =P1260- (1430) «109 Filooe 20000 ‘14. LAST SQUARES: Profi ‘Bx00.009 13, Atsnton came rma us AASTYEAR THIG YEAR GI. inne (8,000-5,000) x (P1006) 31.500 Fee Ng Pam 759000 arabe coshg came Bra) Fase — S000 40.800 +24, Sales (5,000 x Pag) 200,000 Toad Pr1ooo — Bzsoon ‘Sales (1,140 + 940/309, P6813,333 ‘Less cast of goods sold (6,000 «P21.60) ae Grasp st Se (120 «400 prams ee ces Lose rot 000 Selig gen. aan expanses p ga.s09 [Sie ee.MAS FIRST PREBOARD SOLUTIONS BATCH 84 —- JULY 2018 25, Ending inventory —units (8,000 §.0%0) p00 rodect ost pat uit 1) pe Costof ending inven eztaa 21. cual price (P10,080 + 4,200) 2.40, Sida pice 0 Diference in prices favorable 0.10 X edu quanti phased 4210 Price valence fevorabie ead 2. Slancard ay. port (2 = 80%) 250 Standard price £3.00 ‘Siandard oe pari ea 2, Aatuatine hows 40 Lass standard sme (1,000.4) 4000 Dil eno inne —unlaoretle 00 stare rae por haut ee Etiseny vaterce-evarrbie Ee) on, 30-34: calves verted ‘Achua te x6. vr rte (2,100 072) Spending variance —aversble ‘tus mo xe. va rai (2,100.

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