Since 1977

Since 1977

MAS TRINIDAD
FIRST PREBOARD SET A MAY 2019

1. Management accounting C. High-low method

A. is governed by generally accepted accounting D. Scatter diagrams
principles.
B. draws from disciplines other than accounting. 10. One of Matthew Company's competitors has learned
C. is geared primarily to the past rather than the that Matthew has a total expense per unit of P1.50 at
future. the 15,000-unit level of activity and total expense per
D. places more emphasis on precision of data
unit of P1.45 at the 20,000-unit level of activity.
compared with financial accounting which does
snot. Assume that the relevant range includes all of the
activity levels mentioned in this problem. What would
2. The following characteristics refer to Financial be the competitor's prediction of total fixed cost per
Accounting except period?
A. provides information to external users A. P22,500 C. P13,600
B. emphasizes on objective data B. P28,000 D. P 3,000
C. has no externally imposed standards
D. generates general purpose financial statements 11. The following data have been provided by a retailer
that sells a single product.
3. Which of the following is not a characteristic of
Management Advisory Services? This Year Last Year
A. MAS is broad in scope Units sold 200,000 150,000
B. MAS involves problem-solving affecting the future Sales revenue P1,000,000 P750,000
operations of the client Less cost of goods sold 700,000 525,000
C. Beneficiary of service is management Gross margin P 300,000 P225,000
D. MAS is repetitive as far as the same client is Less operating 222,000 210,000
concerned expenses
Net income P 78,000 P 15,000
4. The technique to determine the variable and fixed What is the best estimate of the company's
portion of costs is contribution margin for this year?
A. poisson analysis C. game theory A. P252,000 C. P158,000
B. queuing theory D. regression analysis B. P300,000 D. P120,000

5. When using the high-low method, the two observations 12. Total production costs of prior periods for a company
used are the high and low observations of the are listed as follows. Assume that the same cost
A. cost driver. C. slope coefficient. behavior patterns can be extended linearly over the
B. dependent variables. D. residual term. range of 3,000 to 35,000 units and that the cost driver
for each cost is the number of units produced.
6. The term "relevant range" means the range over
which: Production in
A. costs may fluctuate. units per
B. a particular cost formula is valid. month 3,000 9,000 16,000 35,000
C. production may vary. Cost X P23,700 P52,680 P86,490 P178,260
D. relevant costs are incurred. Cost Y 47,280 141,840 252,160 551,600
What is the average cost per unit at a production level
7. In the formula y = a + bx, y refers to the of 8,000 units for cost X?
A. slope A. P5.98 C. P7.90
B. intercept B. P5.85 D. P4.83
C. dependent variable
D. independent variable 13. If unit outputs exceed the breakeven point
E. total variable costs. A. there is a loss.
B. total sales revenue exceeds total costs.
8. Put the following steps in order for using the high-low C. there is a profit.
method of estimating a cost function: D. then both (b) and (c) are correct.
A = Identify the cost function
14. If a firm's net income does not change as its volume
B = Calculate the constant
C = Calculate the slope coefficient changes, the firm('s)
D = Identify the highest and lowest observed values A. must be in the service industry.
A. D C A B C. A D C B B. must have no fixed costs.
C. sales price must equal P0.
B. C D A B D. D C B A
D. sales price must equal its variable costs.
9. Which of the following decision-making tools would not
15. According to CVP analysis, a company could never
be useful in determining the slope and intercept of a
incur a loss that exceeded its total
mixed cost?
A. variable costs. C. costs.
A. Linear programming B. fixed costs. D. contribution margin.
B. Least-squares method

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16. On January 1, 2019, Lake Co. increased its direct labor expected to increase by what amount over 2019?
wage rates. All other budgeted costs and revenues A. P25,000 D. 40 percent
were unchanged. How did this increase affect Lake’s B. 200 percent E. P60,000
budgeted breakeven point and budgeted margin of C. P50,000
safety?
23. President X of WXY Corporation requested you to
A. B. C. D. explain the difference of net income between the
Budgeted Increase Increase Decrease Decrease variable costing income statements presentation and
Breakeve the absorption costing method. You would say that
n Point
the difference is
Budgeted Increase Decrease Decrease Increase
A. none if there is no change in the fixed costs in the
Margin of
beginning and ending inventories.
Safety
B. equal to the fixed costs per unit times the number
of units sold.
17. Love Corp. is operationally a highly leveraged
C. attributable to the variable costs in the inventory
company, that is, it has high fixed costs and low D. attributable to the fixed costs in ending inventory
variable costs. As such, small changes in sales volume
result in 24. Which of the following statements is correct?
A. proportionate change in net income A. When production is higher than sales, absorption
B. large changes in net income costing net income is lower than variable costing
C. negligible change in net income net income
D. no change in net income B. If all products manufactured during the period are
sold in that period, variable costing net income is
18. The margin of safety percentage is computed as: equal to absorption costing net income.
C. When production is lower than sales, variable
A. Break-even sales/Total sales.
costing net income is lower than absorption costing
B. Total sales - Break-even sales.
net income
C. (Total sales - Break-even sales)/Break-even sales
D. When production and sales level are equal,
D. (Total sales - Break-even sales)/ Total sales
variable costing net income is lower than
absorption costing net income.
19. If the sales mix shifts toward higher contribution
margin products, the break-even point 25. As compared with total absorption costing profit over
A. decreases. the entire life of a company, total variable costing
B. increases. profit will be
C. remains constant. A. less
D. It is impossible to tell without more information. B. greater
C. equal
20. A company manufactures a single product. Estimated D. substantially greater or less depending upon
cost data regarding this product and other information external factors
for the product and the company are as follows:
Sales price per unit P40 26. Helton Company has the following information for the
Total variable production cost per unit P22 current year.
Sales commission (on sales) 5% Beginning fixed manufacturing overhead
Fixed costs and expenses in inventory P95,000
Manufacturing overhead P5,598,720 Fixed manufacturing overhead in
General and administrative P3,732,480 production 375,000
Effective income tax rate 40% Ending fixed manufacturing overhead in
The number of units the company must sell in the inventory 25,000
coming year in order to reach its breakeven point is Beginning variable manufacturing
A. 388,800 units C. 583,200 units overhead in inventory P10,000
B. 518,400 units D. 972,000 units Variable manufacturing overhead in
production 50,000
21. Below is an income statement for Kirby Co. for 2019: Ending variable manufacturing overhead
Sales P400,000 in inventory 15,000
Variable costs (125,000) What is the difference between operating incomes
Contribution margin P275,000 under absorption costing and variable costing?
Fixed costs (200,000) a. P70,000 c. P40,000
Profit before tax P 75,000 b. P50,000 d. P5,000

Assuming that the fixed costs are expected to remain
at P200,000 for 2020, and the sales price per unit and
variable costs per unit are also expected to remain
constant, how much profit before tax will be produced
if the company anticipates 2020 sales rising to 130%
of the 2019 level?
A. P97,500 C. P157,500
B. P195,000 D. P180,000
22. The Pancheco Company has an operating leverage of
2. Sales for 2019 are P200,000 with a contribution
margin of P100,000. Sales are expected to be
P300,000 in 2020. Net income for 2020 can be
27. A company had an income of P50,000 using direct
costing for a given month. Beginning and ending
inventories for the month are 13,000 units and 18,000
units, respectively. Ignoring income tax, if the fixed
overhead application rate was P2 per unit, what was
the income using absorption costing?
a. P40,000 c. P60,000
b. P50,000 d. P70,000
28. Last year, Craft Company had a net operating income
of P80,000 using absorption costing and P74,500 using
variable costing. The fixed manufacturing overhead
cost has been P5 per unit for the last three years. If

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21,500 units were produced last year, then sales last month's sales. For the forthcoming month of March,
year were: Ball has budgeted the beginning inventory at 30,000
A. 16,000 units. C. 22,600 units. units and the ending inventory at 33,000 units. This
B. 20,400 units. D. 27,000 units.
suggests that
29. Sales and costs data for Maripaz Corporation’s new a. February sales are budgeted at 10,000 units less
product are as follows: than March sales.
b. March sales are budgeted at 10,000 units less
Sales (P22.50 per unit) P225,000
than April sales.
Unit Variable Fixed Cost
c. February sales are budgeted at 3,000 units less
Cost*
than March sales.
Manufacturing cost P12.00 P37,500
d. March sales are budgeted at 3,000 units less
Administrative cost 4.50 22,500
than April sales.
* per unit of production.
There was no inventory at the beginning of the year. Use the following information for the next two questions.
Normal capacity of the plant is 12,500 units. During Operational budgets are used by a retail company for
the year, 12,500 units were manufactured. The total planning and controlling its business activities. Data
variable cost charged to expense for the year under regarding the company's monthly sales for the last 6
the direct costing method shall be months of the year and its projected collection patterns
a. P165,000 c. P206,250 are shown below.
b. P176,250 d. P228,750 The cost of merchandise averages 40% of its selling price.
The company's policy is to maintain an inventory equal to
30. To which of the following is a standard cost nearly like? 25% of the next month's forecasted sales. The inventory
A. Estimated cost. C. Product cost. balance at cost is P80,000 as of June 30.
B. Budgeted cost. D. Period cost.
Forecasted Sales
31. The fixed factory O/H application rate is a function of a July P775,000
predetermined activity level. If standard hours allowed August 750,000
for good output equal this predetermined activity level September 825,000
for a given period, the volume variance will be October 800,000
November 850,000
A. zero
December 900,000
B. favorable
Types of Sales
C. unfavorable
Cash sales 20%
D. either favorable or unfavorable, depending on the
Credit sales 80%
budgeted O/H
Collection Pattern for Credit Sales
32. One of the purposes of standard costs is to
A. minimize the use of budgets.
In the month of sale 40%
B. control costs, motivate and measure efficiencies.
In the first month following the sale 57%
C. avoid reliance upon actual costs.
Uncollectible 3%
D. eliminate accounting for over- or under-applied
overhead at the end of the period.
37. The budgeted cost of the company's purchases for the
month of August would be
33. Variances indicate
a. P302,500 c. P307,500
A. the cause of the variance b. P305,000 d. P858,750
B. who is responsible for the variance
C. that actual performance is not going according to 38. The company's total cash receipts from sales and
plan collections on account that would be budgeted for the
D. when the variance should be investigated month of September would be
a. P757,500 c. P793,800
34. Management scrutinizes variances because b. P771,000 d. P856,500
A. management desires to detect such variances to
be able to plan for promotions. 39. A 2019 cash budget is being prepared for the purchase
B. management needs to determine the benefits of Toyo, a merchandise item. Budgeted data are
foregone by such variances. Cost of goods sold for 2019 P300,000
C. it is desirable under conventional knowledge on Accounts payable 1/1/2019 20.000
good management. Inventory- 1/1/2019 30.000
D. management recognizes the need to know why 12/31/2019 42.000
variances happen to be able to make corrective Purchases will be made in twelve equal monthly
actions and fairly reward good performers. amounts and paid for in the following month. What is
the 2019 budgeted cash payment for purchases of
35. The total overhead variance is Toyo?
A. the difference between actual overhead costs and a. P295,000 c. P306,000
budgeted overhead. b. P300,000 d. P312,000
B. based on actual hours worked for the units
produced. 40. Which of the following is true for a make-or-buy
C. the difference between actual overhead costs and decision?
applied overhead. a. The reliability of the outside supplier of the
D. the difference between budgeted overhead and component is important to the decision.
applied overhead. b. Depreciation on equipment used in making the
component and having no other use is the
36. Ball Company has a policy of maintaining an inventory critical factor in the decision.
of finished goods equal to 30 percent of the following c. Opportunity costs are irrelevant.

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d. The company should make the component if the

Employment-contract strikes in the companies that
purchase price is less than the per-unit variable
purchase the bulk of the E14 have caused Bayan
cost to make the component.
Company’s sales to temporarily drop to only 9,000
units per month. Bayan Company estimates that the
41. Which of the following costs is relevant in deciding
strikes will last for about two months, after which
whether to sell joint products at split-off or process
time sales of E14 should return to normal. Due to
them further?
the current low level of sales, however, Bayan
a. The unavoidable costs of further processing.
Company is thinking about closing down its own
b. The avoidable costs of further processing.
plant during the two months that the strikes are on.
c. The variable cost of operating the joint process.
If Bayan Company does close down its plant, it is
d. The cost of materials used to make the joint
estimated that fixed manufacturing overhead costs
products.
can be reduced to P105,000 per month and that
42. An opportunity cost commonly associated with a fixed selling costs can be reduced by 10%. Start-up
special order is costs at the end of the shutdown period would total
a. the contribution margin on lost sales. P8,000. Since Bayan Company uses just-in-time
b. the variable costs of the order. production method, no inventories are on hand.
c. additional fixed costs related to the increased
At what level of unit sales for the two-month period
output.
should Bayan Company be indifferent between
d. any of the above.
temporarily closing the plant or keeping it open?
43. Mikaelabelle Products sells product A at a selling a. 11,000 c. 10,000
price of P40 per unit. Mikaelabelle’s cost per unit b. 24,125 d. 8,000
based on the full capacity of 500,000 units is as
47. Decker Products manufactures standard and deluxe
follows:
wooden swing sets. Selected data related to each
Direct materials P 6
product is as follows:
Direct labor 3
Standard Deluxe
Indirect manufacturing
Sales price per unit P900 P2,000
(60% of which is fixed) 10
Direct materials per 100 500
P19
unit
A one-time-only special order offering to buy 50,000
Direct labor per unit 300 700
units was received from an overseas distributor.
Variable overhead per 50 100
The only other costs that would be incurred on this
unit
order would be P4 per unit for shipping.
Machine hours per unit 4 8
Mikaelabelle has sufficient existing capacity to
manufacture the additional units. In negotiating a Most of the manufacturing process for the sets is
price for the special order, Mikaelabelle should done on machines. There is a maximum of 10,000
consider that the minimum selling price per unit machine hours available each year.
should be If demand were strong for both sets and the
a. P17. c. P21. company could sell an unlimited number of either
b. P19. d. P23. style, what is the maximum total contribution
margin the company could have?
44. Paulson Company has only 25,000 hours of machine
a. P 875,000 c. P1,125,000
time each month to manufacture its two products.
b. P 281,250 d. P1,750,000
Product X has a contribution margin of P50, and
Product Y has a contribution margin of P64. Product X 48. The sales manager of Alpha Electronics submitted a
requires 5 hours of machine time, and Product Y proposal to increase its production of digital watches.
requires 8 hours of machine time. If Paulson Company As part of the data presented, he reported the total
wants to dedicate 80 percent of its machine time to additional cost required for the proposed increase in
the product that will provide the most income, the production. The increase in total cost is known as
company will have a total contribution margin of A. controllable cost C. opportunity cost.
a. P250,000 c. P210,000 B. incremental cost D. relevant cost.
b. P240,000 d. P200,000
49. Statement 1: In general, all variable costs are relevant
45. Knox Company uses 10,000 units of a part in its to decisions, but all fixed costs are not.
production process. The costs to make a part are: Statement 2: Fixed costs need not be considered in
direct material, P12; direct labor, P25; variable making a decision unless they are expected to be
overhead, P13; and applied fixed overhead, P30. Knox altered by that decision, either immediately or in the
has received a quote of P55 from a potential supplier future.
for this part. If Knox buys the part, 70 percent of the Statement 3: Costs that is relevant to management
applied fixed overhead would continue. Knox Company decision making usually include all expected future
would be better off by costs.
a. P50,000 to manufacture the part A. B. C. D.
b. P40,000 to buy the part Statement 1 True False True False
c. P150,000 to buy the part Statement 2 True True False False
d. P160,000 to manufacture the part Statement 3 True False True True
46. Bayan Company normally produces and sells 30,000 50. The decision to employ a resource in a specific way
implies giving up the returns from other possible uses of
units of E14 each month. E14 is a small electrical
the same resource. Such returns are considered costs of
relay used in the automotive industry as a component
the alternative chosen as they are profits of the
part in various products. The selling price is P22 per
alternative forgone. These costs must be evaluated by
unit, variable costs are P14 per unit, fixed the decision-maker and they are called
manufacturing overhead costs total P150,000 per A. Opportunity costs C. Standard costs
month, and fixed selling costs total P30,000 per B. Incremental costs D. Manufacturing costs
month.

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51. These statements are proper to the budgeting process Machine hours per unit 6 3
except: Total hours available 45,000
A. it is a part of management’s responsibility to plan the Unit cost if purchased P 7.40 P 22.50
use of its resources. The relevant unit production costs that should be
B. it is a tool to orchestrate the various functions of considered in the decision to schedule the 45,000 hours
operations in a business. available machine time in order to realize the maximum
C. the involvement of the various levels of individuals in potential cost savings are
the company is necessary to gain its acceptance and
a. b. c. d.
attain its goals.
X P8.00 P7.40 P 5.00 P 1.50
D. actual results need not be compared with plan, since
Y P22.00 P22.50 P20.50 P19.00
the process ends after budget is approved.

52. Which of these statements are advantages of profit 57. Chow Inc. has its own cafeteria with the following annual
planning? costs
1. Develops profit-mindedness, encourages cost Food P 400,000
consciousness and resources utilization throughout Labor 300,000
the company. Overhead 440,000
2. Provides vehicle to communicate objectives, gain Capital P1,140,000
support for the plan, of what is expected, thereby
developing a sense of commitment to achieve The overhead is 40% fixed. Of the fixed overhead,
established goals. P100,000 is the salary of the cafeteria supervisor. The
3. Provides yardstick to evaluate actual performance; remainder of the fixed overhead has been allocated from
encouraging efficiency, increasing output and total company overhead. Assuming the cafeteria
reducing cost. supervisor will remain and that Chow will continue to pay
4. Provides a sense of direction for the company and said salary, the maximum cost Chow will be willing to pay
enhances coordination of business activity. an outside firm to service the cafeteria is
5. Eliminates or takes over the role of administration by a. P1,140,000 c. P700,000
providing detailed information that allows executives b. P1,040,000 d. P964,000
to operate toward achievement of the organization’s
objectives. 58. PQR Company expects to incur the following costs at the
A. Statements 3, 4, and 5 only. planned production level of 10,000 units:
B. All five statements. Direct materials P100,000
C. Statements 1, 3, and 4 only. Direct labor 120,000
D. Statements 1, 2, 3, and 4 only. Variable overhead 60,000
Fixed overhead 30,000
53. For a company that does not have resource limitations in
what sequence would the budgets be prepared? The selling price is P50 per unit. The company currently
1. cash budget 4. production budgets operates at full capacity of 10,000 units. Capacity can be
2. sales budget 5. purchase budgets increased to 13,000 units by operating overtime. Variable
3. inventory budgets costs increase by P14 per unit for overtime production.
A. sequence 2, 3, 4, 5 and 1 Fixed overhead costs remain unchanged when overtime
B. sequence 2, 3, 4,1 and 5 operations occur. PQR Company has received a special
C. sequence 2, 4, 3, 5 and 1 order from a wholesaler who has offered to buy 2,000
D. sequence 4, 3, 2, 1 and 5 units at P45 each.
What is the incremental cost associated with this special
order?
Use the following information for the next two questions.
a. P84,000 c. P62,000
Stober Company produces a specialty item. Management has b. P31,000 d. P42,000
provided the following information:
Actual sales 60,000 units 59. High Class Townhouse, Inc. manages five upscale
Budgeted production 50,000 units townhouses in Makati, Ortigas, and Greenhills area.
Selling price P40.00 per unit Shown below are the summary income statements for
Direct material costs P10.00 per unit each complex:
Variable manufacturing overhead P3.00 per unit In Thousand Pesos
Variable administrative costs P5.00 per unit One Two Three Four Five
Fixed manufacturing overhead P4.00 per unit Rent 10,000 12,100 23,470 18,780 10,650
54. What is the cost per statue if throughput costing is used? Income
a. P22.00 c. P15.00 Expenses 8,000 13,000 26,000 24,000 13,000
b. P19.00 d. P10.00
Profit 2,000 (900) (2,530) (5,220) (2,350
55. What is the total throughput contribution? Included in the expenses is P12,000,000 of corporate
a. P1,500,000 c. P1,380,000 overhead allocated to the townhouse based on rental
b. P1,620,000 d. P1,800,000 income. The complex that the company should consider
selling is (are)
56. A firm needs two component parts X and Y, which can be a. Three, Four & Five. c. Two, Three, Four & Five.
manufactured or purchased. In producing the parts, b. Four & Five. d. Four.
factory overhead is applied at P1.00 per standard machine 60. Julius International produces weekly 15,000 units of
hour. The fixed capacity costs, which will remain Product JI and 30,000 units of JII for which P800,000
unchanged, whether the parts will be produced or common variable costs are incurred. These two products
purchased represent 50% of the applied overhead. can be sold as is or processed further. Further processing
Standard costs and other information for the two of either product does not delay the production of
component parts used by the firm are presented below subsequent batches of the joint products. Below are
Part X Part Y some information:
Direct material P 0.50 P12.00 JI JII
Direct labor 1.50 7.00 Unit selling price without further P24 P18
Factory overhead 6.00 3.00 processing
Unit standard costs P 8.00 P22.00 Unit selling price with further P30 P22
Units needed per year 9,000 12,000 processing

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Total separate weekly variable  The product, which is bottled in 10-liter containers, is
costs of further processing P100,000 P90,000 primarily a mixture of Byclyn, Salex, and Protex.
To maximize Julius’ manufacturing contribution margin,  The finished product is highly unstable, and one 10-
the total separate variable costs of further processing that liter batch out of six is rejected at final inspection.
should be incurred each week are Rejected batches have no commercial value and are
a. P95,000 c. P100,000
thrown out.
b. P90,000 d. P190,000
 It takes a worker 35 minutes to process one 10-liter
61. Information on the direct material costs of Bernal batch of Bysap. Employees work eight hours a day,
Manufacturing Corp. is as follows: including one hour per day for rest breaks and
Actual direct material costs P 44,000 cleanups.
Actual units of direct material used 22,000 What is the standard labor time to produce one 10-liter
Standard price per unit of direct material P2.20 batch of Bysap?
Direct material efficiency variance – A. 35 minutes. C. 48 minutes.
Unfavorable P2,800 B. 40 minutes. D. 45 minutes.
What was Bernal’s direct material price variance?
A. P4,400 favorable. C. P5,600 favorable. 67. Smith Company uses a standard cost system. The
B. P4,400 unfavorable. D. P5,600 unfavorable. following information pertains to direct labor costs for the
month of June.
62. Information on Bustos Manufacturing Company’s overhead Standard direct labor rate per hour P10.00
costs is as follows: Actual direct labor rate per hour P9.00
Budgeted overhead based on standard Labor rate variance P12,000 favorable
direct-labor hours allowed P90,000 Actual output 2,000 units
Budgeted overhead based on actual Standard hours allowed for actual
direct-labor hours allowed P89,000 Production 10,000 hours
Standard applied overhead P86,000 How many actual labor hours were worked during March
Actual overhead P92,000 for Smith Company?
What is the total overhead variance? A. 10,000 D. 12,000
A. P4,000 favorable. C. P8,000 unfavorable. B. 2,000 E. 1,000
B. P6,000 unfavorable. D. P9,000 favorable. C. 1,200
63. The following is a standard cost variance analysis report 68. The standards for direct labor for a product are 2.5 hours
on direct labor cost for a division of a manufacturing
at P8 per hour. Last month, 9,000 units of the product
company.
were made and the labor efficiency variance was P8,000
Job Actual Hours Actual Hours Standard
at at Hours at F. The actual number of hours worked during the past
Actual Wages Standard Standard period was:
Wages Wages A. 23,500. C. 20,500.
213 P3,243 P3,700 P3,100 B. 22,500. D. 21,500.
215 15,345 15,675 15,000
217 6,754 7,000 6,600 69. Beacon Company manufactures various types of plastic
219 19,788 18,755 19,250 and rubber coated tubing products for various industries.
221 3,370 3,470 2,650 Standard cost accounting system is used. The following
Totals P48,500 P48,600 P46,600 are available:
Actual total overhead P 44,000
What is the total flexible budget direct labor variance for
Budgeted fixed costs P 12,600
the division?
Total overhead application rate
A. P1,00 unfavorable. C. P1,900 favorable.
per standard direct labor hour P 2.50
B. P1,900 unfavorable. D. P2,000 unfavorable.
Actual hours used 16,000
Standard hours allowed 17,000
64. ALPHA Co. uses a standard cost system. Direct materials
Normal activity in hours 14,000
statistics for the month of May are summarized below:
Standard unit price P90.00 The company uses a two-way analysis of overhead
Actual units purchased 40,000 variances.
Standard units allowed for actual The controllable variance of Beacon Company is
Production 36,250 A. P1,500 favorable. C. P4,200 favorable.
Materials price variance- favorable P6,000 B. P1,500 unfavorable. D. P4,200 unfavorable.
What was the actual purchase price per unit?
A. P75.00 C. P88.50 70. Derf Company uses a standard cost system in which it
B. P85.89 D. P89.85
applies manufacturing overhead on the basis of direct
labor-hours. Two direct labor-hours are required for each
65. During April, 80,000 units were produced. The standard
unit produced. The denominator activity was set at 9,000
quantity of material allowed per unit was 2 pounds at a
units. Manufacturing overhead was budgeted at P135,000
standard cost of P5 per pound. If there was a favorable
for the period; 20 percent of this cost was fixed. The
usage variance of P40,000 for April, the actual quantity of
17,200 hours worked during the period resulted in
materials used must have been
production of 8,500 units. Variable manufacturing
A. 168,000 pounds C. 84,000 pounds
B. 152,000 pounds D. 76,000 pounds overhead cost incurred was P108,500 and fixed
manufacturing overhead cost was P28,000. The variable
66. Hansen Company is a chemical manufacturer that supplies overhead efficiency variance for the period was:
various products to industrial users. The company plans A. P5,300 unfavorable. C. P1,500 unfavorable.
to introduce a new chemical solution called Bysap, for B. P1,200 unfavorable. D. P6,500 unfavorable.
which it needs to develop a standard product cost. The
following labor information is available on the production
of Bysap.

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