MAS - First Pre-board 2014-15 With Solutions

August 28, 2017 | Author: Aj de Castro | Category: Inventory, Depreciation, Net Present Value, Expense, Management Accounting
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BALIUAG UNIVERSITY

CPA REVIEW 2013-14 MANAGEMENT ADVISORY MANAGEMENT – FIRST PRE-BOARD JACF EXAM __________________________________________________________________________________________________ 1. Answer: C Oct. Nov. Dec. Sales 200,000 210,000 220,500 Beginning inventory (150,000) (168,000) (176,400) Ending inventory: (210,000 x 80%) 168,000 (220,500 x 80%) 176,400 (220,500 x 1.05 x 80%) ______ ______ 185,220 Required production 218,000 218,400 229,320 = 665,700 2. Amswer: C Nyclyn: 24 / 0.80 x 15 = 450 Salex: 19.2 / 0.80 x 21 = 504 Protet: 10 x 28 = 280 1,234 3. Answer: D Spending: (AT x AVR) – (AT x SVR) [53,500 x (P315,000 / 53,500)] – [(53,500 x (P3,600,000 / 600,000)] P315,000 – P321,000 = 6,000 F Efficiency: (AT x SVR) – (ST x SVR) P321,000 – [(26,000 units x 2 DLH) x P6] = 9,000 U 4. Answer: C Fixed Spending: (AFxOH – BFxOH) P260,000 – (P3,000,000 / 12) = 10,000 U Fixed Volume: [BFxOH – (ST x SFxOH)] P250,000 – (26,000 x 2 x P5) = 10,000 F 5. Answer: B Budgeted Fixed Overhead = P108,000 Less: Std. Time x Std. Fixed Overhead: [24,000 x (108,000 / 27,000) = 96,000 Unfavorable volume variance P 12,000 6. Answer: D Variable production cost: Total variable cost – variable selling expense (50,000 – 30,000) = 20,000 Unit VC: (20,000 / 20,000) + (30,000 / 12,000) = 3.5 Variable income = 12,000 (12 -3.5) – 100,000 = 2,000 7. Answer: D

Variable costing: 7,000 [(22,500 / 7,500) + (30,000 / 7,500) + 2] = P63,000 Absorption costing: 7,000 [(22,500 / 7,500) + (30,000 / 7,500) + 2 + (40,000 / 8,000)] + 2,500* = P100,500 *Capacity (volume) variance: (NP – AP) FFOH / u = (8,000 – 7,500) 5 = 2,500 U 8. Answer: A Absorption Costing: (25 – 16) 16,000 – 64,000 = 80,000 + 8,000 F** - 12,000 UF = P76,000 ** Favorable: Actual production > Normal Production 9.

BALIUAG UNIVERSITY

CPA REVIEW 2013-14 MANAGEMENT ADVISORY MANAGEMENT – FIRST PRE-BOARD JACF EXAM __________________________________________________________________________________________________ Answer: B Relevant Cost to Make Relevant Cost to Buy Purchase price P60 DM P 6 DL 30 VOH 12 Relevant FOH 9 P57 P60 X no. of units 20,000 20,000 1,140,000 1,200,000 = 60,000 + Savings 25,000 Relevant cost that would be saved 85,000 10. Answer: A PM PR SP/u P50 P75 VC/u: DM 26 38 DL 10 18 FOH 8 11 CM/u P 6 P 8 Multiply by units produced / hr. 3 2 CM/hr. P18 P16 Multiply by no. of hrs. available 2,000 Max. CM 36,000 11. Answer: C (16 - 8) 4,000 = (18 – 8) X x = 3,200 units 12. Answer: Sales (P4,000,000 x 162.5%) P6,500,000 Less: Costs and Expenses: Materials and labor P4,000,000 Operating costs 1,500,000 5,500,000 Net income before tax P1,000,000 Less: Income tax – 35% 350,000 Net income P 650,000 P650,000 / P6,500,000 = 10% 13. Answer: Rate of return on average total assets is net income divided by average total assets P650,000 / P2,600,000 = 25% 14. Answer: P6,500,000 / P2,600,000 = 2.5 times 15. Answer: Average total assets P2,600,000 Less: Loan payable 520,000 Stockholders’ equity P2,080,000 P650,000 / P2,080,000 = 31.25% 16. Answer: D 17.

[(34,000 – 4,000) – 21,000] / (50,000 – 20,000) = .30 Chk: Y = (15,000 +4,000) + .30(30,000)

BALIUAG UNIVERSITY

CPA REVIEW 2013-14 MANAGEMENT ADVISORY MANAGEMENT – FIRST PRE-BOARD JACF EXAM __________________________________________________________________________________________________ Answer: C y = a + bx or a = y – bx (230,000 – 50,000b) 1.25 = 280,000 – 60,000b 287,500 – 62,500b = 280,000 – 60,000b = b=3 18. Answer: A CMR = FxC / BES CMR = ∆FxC ÷ ∆BES = 78,750 ÷ (975,000 – 750,000) = 35% BES: FxC ÷ CMR FxC = BES x CMR = 975,000 (35%) = 341,250 19. Answer: B CMR x MSR = NPR 20% x 33.33% = 6.67% S= 5,000 ÷ 6.67% = 75,000 CM = 15,000 FC = 10,000 BES = 50,000 20. a 21. b 22. Answer: D (4,000 – 3,525 – 75) / (625 + 1,775) = 16.67% 23. C 24. Answer: C 2,000,000 = (30M – COST) – 15% (1.8M + 17.2M) = P25.15M 25. A 26. Answer: B Costs (cash outflows): 50,000 + 2,000 = P52,000 Savings (cash inflows): 11,000 + 0.35 (15,000 – 11,000) + 2,000 (1-0.35) = (13,700) P38,300 27. Answer: C 28. B 29. Answer: D Required: The cost estimation method that should be used to generate a function expressed as Y=a+bX Discussion: Regression analysis can be used to find an equation for the linear relationship among variables. However, multiple regression is not used to generate an equation of the type Y=a+bX because multiple regression has more than one independent variable. In other words, a multiple regression equation would take the form:Y=a+bX1+cX2+dX3n . . . 30. Answer: B Required : The actual finished goods ending inventory using absorption costing. Discussion : Under the absorption method unit cost is P30 (P12 direct materials+P9 direct labor+ P4 variable overhead + P5 fixed overhead). Given beginning inventory of 35, 000 units, the ending inventory equals 40,000 units (35,000 BI + 130, 000 produced – 125, 000 sold. Hence, ending inventory was P1, 200, 000 (P30x40, 0000 units). 31. Answer : C Required: The actual finished goods ending investment using variable costing. Discussion : Using variable costing, the unit cost of ending inventory is P25 (P12 direct materials + P9 direct labor + P4 variable overhead). Given beginning inventory 35, 000 units, the ending inventory equals 40, 000 units (35, 000 PI + 130, 000 produced – 125, 000 sold). Thus, ending inventory was P1, 000, 000 (P25x 40, 000) 32. Answer : A Required: The true statement comparing absorption costing and variable costing income. Discussion: Absorption costing results in a higher income figure than variable costing capitalizes some fixed factory overhead as part of inventory. These cost are expensed during the period incurred under variable costing. Consequently, variable costing recognizes greater

BALIUAG UNIVERSITY

CPA REVIEW 2013-14 MANAGEMENT ADVISORY MANAGEMENT – FIRST PRE-BOARD JACF EXAM __________________________________________________________________________________________________ expenses and lower income because some fixed costs of previous periods absorbed by the beginning inventory are expensed in the current period is never burdened with fixed costs of previous periods 33. A 34. D 35. A 36. B Required: The difference between absorption costing and variable costing income Discussion : The difference is caused by the capitalization of some of the fixed manufacturing overhead. When inventories increase during the periods, the absorption method capitalizes that overhead and transfer it to future periods. The variable costing method expenses it in the current period. Inventories increased by 5, 000 units during the period, and each of those units would have included P5 of fixed manufacturing overhead under absorption costing. Accordingly, P25, 000 of fixed manufacturing overhead would have been capitalized. Recognizing P25, 000 of fixed cost in the balance sheet instead of the income statement results in a P25, 000 difference in income between the two costing methods. 37. B Discussion: The production control supervisor has the most control over the material usage variance. The material usage variance measures the excess amount of materials used over the amount specified in the standards. The materials usage (or material quantity) variance, when unfavorable, is often attributable to waste, shrinkage, or theft in the production areas. The excess usage occurs under the supervision of the production department. 38. D 39. C 40. Answer B 41. C 42. D 43. Answer: D 44. D 45. B 46. B 47. A 48. A 49. D 50. A 51. D 52. The primary objective of management accounting is C 53. Which of the following is true of managerial accounting rather than financial accounting? D 54. B 55. In a broad sense, cost accounting can be defined within the accounting system as C 56. Traditional managerial accounting systems are often criticized for A 57. Strategic cost management has emerged from a blending of D 58. Answer: D Processing hours per unit: XY – 7: 0.75 / 1 = 0.75 or 45 minutes BD – 4: 0.20 / 1 = 0.20 or 12 minutes Additional contribution margin using 100,000 hours: XY – 7: 100,000 / 0.75 x P1 = P133,333 BD – 4: 100,000 / 0.20 x P0.50 = P250,000 59. Answer: B

BALIUAG UNIVERSITY

CPA REVIEW 2013-14 MANAGEMENT ADVISORY MANAGEMENT – FIRST PRE-BOARD JACF EXAM __________________________________________________________________________________________________ Units sold to earn P1M = (1,000,000 + 1,000,000) / 5.25 = 380,952 The use of P1M fixed costs will require 380,952 units which are within the first range. 60. Answer: C Std. unit cost: Variable (7,000,000 x 0.60) / 140,000 P30 Fixed OH (11,200,000 x 0.50) / 160,000 35 Std. unit cost P65 61. Answer: B Budgeted fixed overhead (30,000 x 2) 60,000 Applied FOH (25,000 x 2) 50,000 Unfavorable volume variance 10,000 62. The best characterization of an opportunity costs is that it is A 63. Answer: C Direct material 2.00 Direct labor 2.40 Variable overhead 1.60 Avoidable marketing cost (0.7 x 2.50) 1.75 Relevant cost to make 7.75 The maximum purchase price, if ever the company has to decide buying the product, is P6.75. Any amount higher than P6.75 will necessarily increase the unit cost of the product. 64. Answer: D Direct materials 4.50 Direct labor 10.00 Variable overhead 3.00 Variable selling expense 1.00 Additional profit (40,000 / 5,000) 8.00 Required selling price 26.50 65. Which of the following statement is true? A 66. Answer: C Before-tax cash flow 100,000 Less annual depreciation (500,000 / 8) 62,500 Book income before tax 37,500 Less income tax (37,500 x 0.3) 11,250 Net book income 26,250 Add back depreciation 62,500 Annual after-tax cash inflow

88,750

Alternative computation for ATCF: (100,000 x .70) + (62,500 x .30) = P88,750 Computation of net present value: PV of ATCF: 88,750 x 5.747 510,046 PV of after-tax salvage value: 20,000 x 0.70 x 0.54 7,560 Total 517,606 Investment 500,000 Net present value 17,606 The problem assumed that the salvage value is ignored in the computation of annual depreciation so that the annual cash inflows will be greater. The problem did not include among the choices the assumption that salvage value will be deducted from the cost in computing the amount of annual depreciation. 67.

BALIUAG UNIVERSITY

CPA REVIEW 2013-14 MANAGEMENT ADVISORY MANAGEMENT – FIRST PRE-BOARD JACF EXAM __________________________________________________________________________________________________ Answer: D The amount of investment: the PV of annuity at IRR = 4.355 x 6,000 = 26,130 68. Answer: A Annual sales 360 days x 100,000 36.0M Inventory turnover 36M / 5M 7.2x Inventory conversion period 360 / 7.2 = 50.0 days 69. 70. Answer: B Since the expected value is positive, the company should expect to make a profit if the product is introduced. Given the relationship between stock age and stock quality, the number regarding the age of the inventory for specific qualities are irrelevant. Accordingly, one would expect that the proportion of low- quality items among those aged 6 – 12 months would be the same as the proportion for the entire sample (30 / 130 = 23%). The expected number of lowquality items aged 6 – 12 months is 10.4 (45 x 23%). END

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Theor y of Accou nts Set B (Mock Board) 1 A 1 1 A 2 1 A 3 1 B 4 1 C 5 1 A 6 1 B 7 1 B 8 1 A 9 2 B 0

C A D A C B D A A C

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A A C A B D D C B D

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4 D 1 4 B 2 4 D 3 4 B 4 4 D 5 4 B 6 4 B 7 4 B 8 4 A 9 5 D 0

D D A D D D C D C D

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D C C B C D D D A C

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C B C B D A B D C D

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B C D B C A B C D B

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D

91

D

A

92

C

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93

B

A

94

C

D

95

B

A

96

A

D

97

C

D

98

C

D

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B

D

B

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