Answers to

B 5. D 6.
17. C 18.
10. C 11.
4. 25. 26.
9. 40. D C
B C D 51.

Multiple Choice Questions MAS by Cabrera Chapter 1: 1. D 2. D 3. D 4.

A 7. B 8. D 9. D 10. A Chapter 2: 11. B 12. A 13. D 14. A 15. D 16. A
B 19. D 20. B Chapter 4: 1. D 2. A 3. A 4. B 5. D 6. C 7. C 8. A 9. D
12. 13. 14. 15. 16. 17. 18. 19. 20. D D D A A A D A D D 21. 22. 23. 2
27. 28. 29. 30. B B A A B C B D B C 31. 32. 33. 34. 35. 36. 37. 38. 3
D B D B C B A A 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. A C D B C B A
52. 53. 54. 55. 56. 57. 58. 59. 60. B B A C D C C C A B

21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
A B C D A A B C B A
31. B 32. C 33. C
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Chapter 3: D 11. B D 12. C D 13. D B 14. A A 15. D B 16. A D 17. A C 18. B B 19.
C C 20. C
21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
B C A B A D B B D C
31. 32. 33. 34. 35. 36. 37. 38.
B D D D C A A C
11. A, C, D 12. B* 13. D
* (P400,000 P160,000)
P160,000 = 150% Chapter 5: 1. A 2. C 3. D 4. B 5. A 6. D 7
. C 8. D 9. A 10. B Chapter 6: 1. D 2. C 3. D Chapter 7: 1. B 2. B 3. C 4. D
11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
C A C B D B A C A C
21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
B D A C A C D A D A
31. 32. 33. 34. 35. 36. 37. 38. 39. 40.
C D C A A C A A C C
41. C
4. 5. 6.
D B D
7. 8. 9.
C B A
10. B 11. A 12. D
5. 6. 7. 8.
A B B B

9. 10. 11. 12.

A A D* C
13. 14. 15. 16.
A D C A
17. 18. 19. 20.
A B C D
21. C 22. A 23. B
* Supporting computation for no. 11: Diluted EPS for 12/31/2006 = =
P3,500,000 + (P800,000 x 65%) 400,000 + 25,000 + 225,000 P4,020,000 or P6.18 650
,000

Chapter 8: 1. B 2. D 3. B 4. A 5. C 6. D
7. 8. 9. 10. 11. 12.
C D C C A C
13. 14. 15. 16. 17. 18.
D D B A C C
19. 20. 21. 22. 23. 24.
A A* B B C C
25. 26. 27. 28. 29. 30.
C B B A ** A B
* Controllable costs are those costs that can be influenced by a specified manag
er within a given time period. ** The answer assumes absorption costing method i
s used. Supporting Computations 14. P60 + P10 + P18 + P4 = P92 15. P32 + P16 = P
48 Chapter 9: 1. A 2. D 3. B 4. A 5. B 6. B 7. C 8. D 9. C 10. A 16. P60 + P10 +
P18 + P32 = P120 17. P4 + P16 = P20
11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
C* C* C A D C D B C C
21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
C D C A D B D B A D
31. 32. 33. 34. 35. 36. 37. 38. 39. 40.
D B A B A D B C B D
41. B 42. D 43. C
* Supporting Computations: 11. (10,000 x 2) (P3,000 x 2) P5,000 = P9,000 12. [(P
20 + P3 + P6) x 2,000 units] + (P10 x 1,000 units) = P68,000 Chapter 10: 1. D 2.
D 3. D 4. C 5. D Chapter 11: 1. A 2. D 3. C 4. B 5. A 6. D 7. A 8. B 9. D 10. C
Chapter 13: 1. B 2. B 3. B 4. C 5. C Chapter 14: 1. C 11. 2. D 12. 3. A 13. 4.
A 14. 5. C 15. 6. A 16. 7. D 17. 8. A 18. 9. C 19. 10. A 20.
6. 7. 8. 9. 10.
D A C C B
11. 12. 13. 14. 15.
A D B D C
16. 17. 18. 19. 20.
A D A C D
11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
B D C A C D D C B A

21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
D A B A B D B C A C
Chapter 12: 1. D 2. B 3. B 4. B 5. B 6. C 7. A 8. B 9. A 10. A
11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
B A C D B A C C B C
6. 7. 8. 9. 10.
B D B A D
11. 12. 13. 14. 15.
B A A C D
16. 17. 18. 19. 20.
D D D C D
21. 22. 23. 24. 25.
A D C B C
26. 27. 28. 29. 30.
A B C B A
E D C C B C B A B A
21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
C B A D B A A B D A
31. 32. 33. 34. 35. 36. 37. 38. 39. 40.
B D D D C D B D B D
Chapter 15: 1. B 2. B 3. C 4. E 5. C 6. C 7. D 8. C 9. A 10. D
11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
C B C B D C A B E B
21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
C C D C C C D A C D

Chapter 15: Supporting computations: Questions 16 to 20: Cost of sales Add: Desi
red Minimum Inventory Total Less: Beginning Inventory (1,400,000 x 0.3) Gross Pu
rchases Less: Cash discount Net cost of purchases Payments of Purchases 60% - mo
nth of purchase 40% - following month Total (19) Gross Current months sales (with
discount) 35% Current months sales (without discount) 15% Previous months sales (
with discount) 4.5% Previous months sales (without discount) 40.5% P595,000 255,0
00 67,500 607,500 P1,525,000 February Cash Discount P11,900 0 1,350 January P1,4
00,000 492,000 1,892,000 420,000 1,472,000 14,720 P1,457,280 February P1,640,000
456,000 2,096,000 492,000 1,604,000 16,040 P1,587,960
(17) (16)
P874,368 (18)
P 952,776 582,912 P1,535,688
Net P583,100 255,000 66,150 607,500 P1,511,750
P13,250
(20)Total Collections in February Add: Cash sales Total (21)Estimated cash recei
pts Collections from customers Proceeds from issuance of common stock Proceeds f
rom short-term borrowing Total Less: Estimated cash disbursements For cost and e
xpenses For income taxes Purchase of fixed asset Payment on short-term borrowing
s Total Cash balance, Dec. 31 (22)Net income Add: Depreciation Working capital p
rovided from operations Add: Increase in income taxes payable Increase in provis
ion for doubtful accounts receivable Total Less: Increase in accounts receivable
Decrease in accounts payable Increase in cash (23)Cash Receipts for February 20
05 From February sales (60% x 110,000) From January sales Total (24)Pro-forma In
come Statement, February 2005 Sales Cost of sales (75%) Gross profit Less: Opera
ting expenses P120,000 65,000
P1,511,750 350,000 P1,861,750 P1,350,000 500,000 100,000 P1,950,000 P1,200,000 9
0,000 400,000 50,000 1,740,000 P 210,000
P185,000 P 80,000 45,000 P 35,000 25,000 125,000 P310,000 60,000 P250,000
P 66,000 38,000 P104,000
P110,000 82,500 P 27,500 16,500

Depreciation Bad debts Net operating income

5,000 2,200
23,700 P 3,800
(25)Accounts Payable on February 28, 2005 will be the unpaid purchases in Februa
ry - (75% x P120,000) = P90,000. Questions 26 to 29: Net sales Less: Cost of sal
es Finished goods inventory, Jan. 1 Add: Cost of goods manufactured (Sch. I) Tot
al available for sale Less: Finished goods inventory, Dec. 31 Gross Profit Less:
Operating and financial expenses Selling Administrative Finance Net income befo
re taxes * P2,000,000 P 350,000 1,350,000 * P1,700,000 400,000 1,300,000 (26) P
700,000 P 300,000 180,000 20,000
500,000 P 200,000
Determined by working back from net income to sales.
Schedule I Raw materials used Raw materials inventory, Jan. 1 Add: Purchases Tot
al available Less: Raw materials inventory, Dec. 31 Raw materials used Direct la
bor Manufacturing overhead Total Manufacturing Cost Add: Work-in-process invento
ry, Jan. 1 Total P1,670,000 Less: Work-in-process inventory, Dec. 31 Cost of goo
ds manufactured (30)Variable factory overhead
P 250,000 491,000 (29) 741,000 300,000 P 441,000 588,000 441,000 (28) P1,470,000
(27) 200,000 320,000 P1,350,000
P150,000 48,000
Fixed factory overhead
P3.125
P240,000 48,000
Total factory overhead Chapter 16: 1. C 2. C 3. A 4. B 5. A 6. B 7. C 8. C 9. B
10. B Chapter 17: 6. A 7. A 8. B 9. B 10. B
5.000 P8.125
11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
B A B C A D D A D B
21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
A C C C C D E B B A
31. 32. 33. 34. 35. 36. 37. 38. 39. 40.
A B B D B B C D D A
41. 42. 43. 44. 45.
B C D A B
6. 7. 8. 9. 10.
C B D A D
31. 32. 33. 34. 35.

B D C B A
41. 42. 43. 44. 45.
B C D D A
46. 47. 48. 49. 50.
B D B B D

Chapter 18: 1. C 2. B 3. D 4. B 5. D 6. C 7. A 8. A 9. A 10. C Chapter 19: 1. C

2. C 3. B 4. B 5. A 6. B 7. C 8. B 9. A 10. B
11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
D C A A A C C D C D
21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
D C C D D B D E B A
31. 32. 33. 34. 35. 36. 37. 38.
C D A C D C D D
11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
D A D A D C A C B C
21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
D A D E B D D C A A
31. 32. 33. 34. 35.
A D C A C
Supporting computations for nos. 16 - 29: 16. Sales [(100,000 x 90%) x (P5.00 x
120%)] Less: Variable costs (P300,000 x 90%) Contribution margin Less: Fixed cos
ts Operating income 17. Direct materials Direct labor Overhead Selling cost Mini
mum selling price per unit 18. Relevant cost to make (10,000 x P24) Purchase cos
t Less: Savings in manufacturing cost Avoidable fixed overhead Net purchase pric
e Difference in favor of buy alternative 19. Increase in sales (60,000 x P3) Less:
Increase in variable cost (60,000 x P2.50) Net increase in income 20. Sales (10
,000 x P20) Less: Variable costs R (P12 x 10,000) S (P 8 x 10,000) T (P 4 x 10,0
00) Contribution margin 21. Sales (P16 x 15,000) Less: Variable costs R (P12 x 1
5,000) S (P 8 x 15,000) T (P 4 x 15,000) Contribution margin Less: Fixed costs O
perating income R P200,000 120,000 80,000 P 80,000 R P240,000 180,000 120,000 P
60,000 40,000 P 20,000 P120,000 80,000 P 40,000 60,000 P180,000 120,000 P 60,000
P120,000 S P240,000 40,000 P160,000 T P240,000 P540,000 270,000 P270,000 150,00
0 P120,000 P 4 5 2 3 P14 P240,000 P300,000 P45,000 50,000 95,000 P205,000 P 35,0
00 P180,000 150,000 P 30,000 S P200,000 T P200,000

22. Old operating income: Contribution margin Less: Fixed cost New operating inc
ome Difference - decrease 23. Sales Less: Variable costs Direct materials Direct
labor Factory overhead Marketing expenses Administrative expenses Contribution
margin Less: Fixed costs Factory overhead Marketing expenses Administrative expe
nses Increase in fixed costs Profit 24. Sales Less: Variable costs Direct materi
als Direct labor Factory overhead Marketing expenses Administrative expenses Con
tribution margin Less: Fixed costs Factory overhead Marketing expenses Administr
ative expenses Decrease in fixed costs (P25,000
4) Profit 25. Direct materials (
P2 x 5,000) Direct labor (P8 x 5,000) Variable overhead (P4 x 5,000) Total varia
ble costs Add: Avoidable fixed overhead Total 26. Avoidable fixed overhead Direc
t materials Direct labor Variable overhead Total Multiplied by: Number of units
to be produced Total relevant costs to make the part 27. Purchase cost (P1.25 x
10,000) Variable costs to make Savings of making the blade 28. Selling price per
unit Less: Variable costs of goods sold per unit ([P320,000 - P80,000]
20,000 u
nits) Contribution margin per unit Multiplied by units to be sold under Special
Order Increase in operating income 29. Budgeted operating income: Contribution m
argin (P2,000,000 x 30%) Less fixed costs Net operating income Operating income
under the proposal:
P80,000 40,000 P40,000 20,000 P20,000 P1,200,000 P300,000 400,000 80,000 70,000
50,000
900,000 P 300,000
P 50,000 30,000 20,000 10,000
110,000 P 190,000 P1,200,000
P275,000 375,000 80,000 70,000 50,000
850,000 P 350,000
P 50,000 30,000 20,000 (6,250) 93,750 P 256,250 P10,000 40,000 20,000 P70,000 10
,000 P80,000 P 4 4 16 18 P42 20,000 P840,000 P12,500 10,000 P 2,500 P17 12 P 5 2
,000 P10,000
P600,000 400,000 P200,000

Sales P2,000,000 Less Variable costs ([70% x P2,000,000] x

gin Less fixed costs Increase in budgeted operating profit
3. B 4. B 5. A 6. C 7. D 8. B 9. B 10. A Chapter 21: 1. B
hapter 23: 6. D 7. D 8. C 9. A 10. A Chapter 24: 1. A 2. B
. A 8. C 9. B 10. A

80%) Contribution mar

Chapter 20: 1. D 2. C
2. C 3. B 4. B 5. B C
3. C 4. C 5. D 6. B 7

1,120,000 P 880,000 520,000

360,000 P160,000
11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
D D D C C D D B A A
21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
C B C D C C D B D A Chapter 22: 1. A 2. B 3. C 4. D 5. D
31. 32. 33. 34. 35. 36. 37. 38. 39. 40.
D C C D D B B B D B
6. 7. 8. 9. 10.
A C B D C
11. A 12. B
6. 7. 8. 9. 10.
A B D A C
11. 12. 13. 14. 15.
D D B C A
11. 12. 13. 14. 15.
C D C D A
11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
B D C A C C A C B A
21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
C D C A C D A C D D
31. 32. 33. 34. 35. 36. 37.
A A B A C B D
Chapter 25: 1. A 11. A 21. A 2. C 12. B 22. D 3. B 13. A 23. C 4. D 14. B 24. D
5. A 15. C 6. C 16. D 7. C 17. B 8. B 18. C 9. C 19. A 10. D 20. D Supporting Co
mputations: Operational partial productivity 2005 Input Partial Resource Product
ivit Output Used y X-45 0.8 60,000
75,000 = Direct labor 60,000
2006 Input Partial Resource Productivit Output Used y 64,000
(

89,600 = 0.7143

10,000 = 6.0 64,000

1 10,847 = ) ( 2 )
5.9002
Financial partial productivity

X-45
2005 Cost of Input Partial Units of Resource Productivit Output Used y 0.1111 60
,000
P540,000 =
2006 Cost of Input Partial Units of Resource Productivit Output Used y 64,000
09,280 = 0.1050
Direct labor 60,000

P6

300,000 = Total productivity in units

(
0.2
3 = 64,000 P347,104
2005 4 60,000
(
)
0.1844 2006 64,000
(a) Total units manufactured (b) Total variable manufacturing costs incurred (c)
Total productivity (a)
(b) (d) Decrease in productivity Total productivity in s
ales pesos (a) Total sales (b) Total variable manufacturing costs incurred (c) T
otal productivity (a) (b) (d) Decrease in productivity (7) Operational partial p
roductivity: Operational Partial Productivity
)
P840,000 P956,384 0.071429 (5) 0.066919 0.071429 0.066919 = 0.00451 (6)
2005 P1,500,000 P840,000 P1.7857 (5) P1.7857 P1.6730 = Actual Production Actual
Input
2006 P1,600,000 P956,384 P1.6730 P0.1127 (6)
=
=
9,500 8,950
= 1.06
(8) Financial partial productivity: (1) Output (2) Direct materials: Quantity Un
it cost Total direct materials cost (3) DM financial partial productivity (1) (2
) (4) Direct labor: Hour spent Hourly wage Total direct labor cost (5) DL financ
ial partial productivity (1) (4) (9) Total productivity: (1) Output Total cost:
Direct materials cost Direct labor cost (2) Total cost (3) Total productivity (1
) (2) Market Share Firm 100,000 90,000 Total Market 2,000,000 = 1,500,000 = Mark
et Share 5% 6% 260,000 P800,000 0.5 337,500 P900,000 0.54 2005 400,000 P540,000
2006 486,000 P562,500 2005 400,000 160 x P3,375 P540,000 0.7407 10,000 x P26 P26
0,000 1.5385 2006 486,000 180 x P3,125 P562,500 0.864 13,500 x P25 P337,500 1.44
Actual Budget 1. 2. 3.
/ /
Market size variance: (2,000,000 1,500,000) x 0.06 x P8 = P240,000 F (10) Market

share variance: (5% - 6%) x 2,000,000 x P8 = P160,000 U (11) Sales quantity var
iance: (100,000 90,000) x P8 = P 80,000 F (12)

(13) Budgeted sales unit Budgeted contribution margin per unit Budgeted total co
ntribution margin Budgeted average contribution margin per unit (14) Actual unit
s sold Budgets sales unit Differences in sales units Budgeted contribution margi
n per unit Sales volume contribution margin variance Sales mixes: Budgeted Unit
% 30,000 1/3 60,000 2/3 90,000 100 Actual Unit 35,000 65,000 100,000 % 35 65 100
Product A 35,000 30,000 5,000 x P4.00 P20,000 F Product B 65,000 60,000 5,000 x
P10.00 P50,000 F P70,000 F Total Product A 30,000 x P4.00 P120,000 Product B 60
,000 x P10.00 P600,000 Total 90,000
P720,000 P8.00
Product A Product B TOTAL
(15)Sales mix contribution margin variance: Product A: (0.35 1/3) x 100,000 x P4
= Product B: (0.65 2/3) x 100,000 x P10 = Total sales mix contribution margin v
ariance (16)Sales quantity contribution margin variance: Product A: (100,000 90,
000) x 1/3 x P4 = Product B: (100,000 90,000) x 2/3 x P10 = Total sales quantity
contribution margin variance (17)Weighted average budget contribution margin pe
r unit: P8.00 (calculated in no. 13) Market size contribution margin variance: (
2,000,000 1,500,000) x 90,000 / 1,500,000 x P8 = P240,000 F (18)Market share con
tribution margin variance: (100,000 / 2,000,000 90,000 / 1,500,000) x 2,000,000
x P8 = P160,000 U (19)Flexible budget contribution margin variance:
P 6,667 F 16,667 U P10,000 U
P13,333 F 66,667 F P80,000 F
Product A Product B TOTAL
Total Contribution margin Actual Operating Flexible Budget Result 35,000 x P3 =
35,000 x P4 = P105,000 P140,000 65,000 x P12 = 65,000 x P10 = P780,000 P650,000
P885,000 P790,000
Flexible Budget Contribution Margin Variance P 35,000 U P130,000 F P 95,000 F P5
0,000 F
(20)Total contribution margin price variance (given) Sales price variance: Produ
ct A: (P12 P10) x 35,000 = Product B: (P24 P25) x 65,000 = Total sales price var
iance Total variable cost price variance (21)Total flexible budget contribution
margin variance Total contribution margin price variance (given) Total variance
cost efficiency variance
P70,000 F P65,000 U 5,000 F P45,000 F P95,000 F 50,000 F P45,000 F

(22)Sales mix ratio: Actual Quantity 1,000 1,000 2,000 Ratio 0.50 0.50 1.00 Budg
et Quantity 1,200 400 1,600 Ratio 0.75 0.25 1.00
R66 R100 TOTAL
R66 sales quantity variance: (2,000 1,600) x 0.75 x P10 = P3,000 F (23)R100 sale
s mix variance: (0.5 0.25) x 2,000 x P70 = P35,000 F (24)Total sales volume vari
ance: R66: R100: Total Chapter 26: 1. C 2. A 3. D 4. C 5. B 6. D 7. D 8. A 9. D
10. B (1,000 1,200) x P10 = (1,000 400) x P70 = P 2,000 U 42,000 F P40,000 F
11. C 12. B 13. D 14. B 15. A 16. D 17. C 18. B 19. B 20. B
21. 22. 23. 24.
C D B D
Chapter 27: 1. C 2. B 3. C 4. D 5. D 6. A 7. C 8. C 9. D 10. D
11. C 12. A 13. C 14. B 15. C 16. D 17. D 18. D 19. A 20. A