1.

Profit = 12% (500,000) = P 60,000

Average assets = (180,000 + 300,000) ÷ 2
RoI = 60,000 ÷ 240,000

2. Required income = 20% (240,000) = 48,000

Operating income = 48,000+24,000 = 72,000
Expenses = 500,000 - 72,000

4. BEP = fixed costs ÷ unit CM

80,000 = (585,000 + ads exp.) ÷ (25 - 16)

6. Collection pattern (%): 0 - 65 - 25 — 8

(200,000 x 8%) + (210,000 X 33%) +
(220,000) x 98%) + (230,0O0 X 90%) +
(240,000 x 65%) + (250,000 X 0%)

7. AR, December 31: (230,000 x 8%) +

(240,000 X 33%) + (250,000 X 98%)

9. Wtd. ave. unit CM: 75% (2) + 25% (1)

Overall BEP (units): 210,000 + 1.75
Product X: 75% (120,000) = 90,000 units
Break-even CM: 90,000 units (2)
12. Product S’s CM per hour: 25 ÷ 1 P 25
Product T’s CM per hour: 40 ÷ 2 = P 20
Maximum CM (Prod. S): P 25 x 3,200 hours

13. Hourly VC: (4,800 - 3,600) ÷ (180 - 120)

Vanable FOH: 20 per hour (160 hours)

14. Monthly fixed cost = 3,600 - 120 (20)

Quarterly fixed cost = 1,200 x 3 months

15. Sum of “x” values: 450

Sum of “y” values: 12,600
Sum of “xy” values: 1,926,000
Sum of”x2” values: 69,300

Equation 1; 12,600 3 a + 450 b

Equation 2: 1926,000 = 450 a + 69,300 b

20. Current fixed cost: 25,000 (8 - 2)

[150,000(1.2) + (5,850 + 0.65)] ÷ (9.5 -2.5)

22. MPPV: 4,500 (3.8 — 4)

23. Actual cost (DM); 4,000 (3.8)

24. MQV: [4,100 - 2,100 (2)] 4
25. 6,400 hours - 2,100 (3 hours)

26. Actual rate: 76,800 + 6,400 12 per hr.

LRV = 12,800 U= 6,400 (12 SR)

27. (6,400 — 6,300) 15 per hour

28. AFOH (V): 65% (150,000)

BASH (V): SH x VR= 6,300 X 15 per hour
29.

30. Segment margin (Division A): 1,000,000 -

800,000 (75%) — 800,000 (25%) 60% —
100,000 — 250,000 (10%)

32. DOL = Change in profit ÷ change in sales = 30% / 20% = 1.5

DOL = CM ÷ profit = 1.5 = CM ÷ 6,000

36. May purchases: 100,000 + 35,000 - 20000

[May: 115,000 (0.6)] + [Apr: 90,000 (0.4)]

38. Unit VC: [300,000 + 250,000 + 250,000 (0.5)

+ 150,000 (0.25)] + 30,000 = 23.75 -
Unit SP: 23.75 ÷ (100% - 40%)

41. Full costing: 20 + (750,000 ÷ 100,000)

NORMAL production is the basis of unit FFOH.
VOLUME variance shall explain the difference
between actual and normal production

43.Y=a+bX 30=a+3(10)

45. Given an excess capacity, minimum transfer

price shall be based on the unit VC (P 20)

46. Cost function: Y = 180,000 + 24 X

Based on sales: Y = 180,000 + 24 (10,000 u)

47. Minimum selling price: 1,200 (P 24)

48. 2017 sales: 20,000 (75%) + 12,000 (25%)

BEP: 180,000 ÷ (40 - 24) = 11,250
Margin of safety (in units): 18,000— 11,250

49. Unit FFOH: 120,000 + 12,000 = 10

Change in Income = (12,000 - 10,000) 10 = P 20,000
If production ¡s greater than sales, then
absorption profit is greater than variable profit

50. Cost to make = cost to buy

180,000 + 24 X = 36 X X =180,000 ÷ 12

51. ANSWER B

Diff. in costs (P12,415 – P11,737) P 678

÷ diff. in hours (150 – 120) 30
Variable rate per hour P22.60

Total cost P12,415 P11,737

Less variable cost (22.60x150) 3,390 (22.60x120) 2,712
Fixed costs P 9,025 P 9,025

52. ANSWER B

Variable cost (140 x P22.60) P 3,164

Fixed cost 9,025
Total cost P12,189
÷ number of hours 140
Cost per hour P 87.06

53. ANSWER B

Prime costs P 900,000

Applied overhead (P600,000/75,000 DLH x 75,700) 605,600
Total cost P1,505,600
÷ Units produced 100,000
Unit cost P 15.06

54. ANSWER C

Activity 1 (P20,000 x 100/500) P 4,000

Activity 2 (P37,000 x 800/1,000) 29,600
Activity 3 (P91,200 x 800/3,800) 19,200
Total allocated cost P52,800
÷ number of units 8,000
Cost per unit P 6.60

55. ANSWER A

Activity costs, Patient 2:

Room and meals (3 x P150) P 450
Radiology (2 x P95) 190
Pharmacy (1 x P28) 28
Chemistry lab (2 x P85) 170
 Operating room (1 x P550) 550
Total P1,388

56. ANSWER B

Assembly department = P9/machine hour x 3 machine hours x 20 sets = P540

57. ANSWER D

58. ANSWER C

Projected sales (125,000 x P6) P750,000

Less contribution margin:
Income before tax (75,000/0.60) P125,000
Add fixed cost 250,000 375,000
Variable costs P375,000
÷ number of units 125,000
Variable cost per unit P 3.00
59. ANSWER D

Let S = Sales; CM = 0.40S; NY = 0.10S

Fixed Cost = (0.40S – 0.10S) = 0.30S

Sales (P60,000 ÷ 0.30) P200,000

Less breakeven sales (P60,000 ÷ 0.40) 150,000
Margin of safety P 50,000

60. ANSWER B

Increase in profit (P40,000 x 20%) P 8,000

÷ Present profit:
Contribution margin P40,000
Less fixed costs 30,000 10,000
% change in profit 80%

61. ANSWER C
Expected sales - units 20,000
Less break-even sales:
Fixed costs (20,000 x [10 + 5]) P300,000
÷ Unit contribution margin
(120 – [35 + 15 + 10 + 20]) P40 7,500
Margin of safety 12,500 units
Margin of safety in pesos (12,500 x P120) P1,500,000
Margin of safety ratio (12,500 ÷ 20,000) 62.5%

62. ANSWER C

Fixed costs P148,500

 Add desired P22,440
( )
profit 1 – 0.32 33,000
Total P181,500
60 – [22.50 + 4.50]
÷ CMR ( )
60 55%_
Required sales to earn desired profit P330,000

63. ANSWER B
Fixed costs:
Manufacturing (148,500 x 60% x 120%) P106,920
Non-manufacturing (148,500 x 40% x 110%) 65,340
Total fixed costs P172,260
Contribution margin ratio:
Selling price P75.00
Less variable costs:
Manufacturing (P22.50 + P4.50) P27.00
Selling and administrative 4.50 31.50
Contribution margin per unit P43.50
÷ Selling price 75.00
Contribution margin ratio P 58%

Required peso-sales to earn a desired profit ratio:

Fixed Cost P172,260

RS = = = P358,875
CMR – PR 58% – 10%

64. ANSWER A

65. ANSWER C

Fixed cost P122,500

Add desired profit (P250,000 x 32%) 80,000
Total P202,500
÷ CM per unit [P15 x (100% - 58%)] 6.30
Required sales in units 32,143

66. ANSWER B
Mix variance P450 U
Yield variance 150 U
Quantity variance P600 U

67. ANSWER A

Total standard cost P72,000

÷ Std qty for actual production (14,400 x 4) 57,600
Standard price per unit of materials P1.25
 The usage variance is P3,000 unfavorable. The standard price is P1.25. Using the formula for
Usage variance, the difference in quantity may be computed as follows:

Usage variance =Difference in quantity x Std. price

3,000 U = Difference in quantity x P1.25

Difference in quantity = 3,000 ÷ P1.25
= 2,400 unfavorable

If the difference in quantity is unfavorable, the actual quantity is greater than the standard quantity:

Standard quantity (14,400 x 4) 57,600

Add unfavorable difference in quantity 2,400
Actual quantity used 60,000 units

Price Variance = (AP – SP) x AQ

= ([P126,000 ÷ 84,000] – P1.25) x 60,000

= P15,000 unfavorable

68. ANSWER D

Actual price (P10,080 ÷ 4,200) P2.40

Standard price 2.50
Difference in prices - favorable P 0.10
X actual quantity purchased 4,200
Price variance – favorable P 420

69. ANSWER C

Actual time – hours 4,100

Less standard time (1,000 x 4) 4,000
Difference in time – unfavorable 100
X standard rate per hour P 12
Efficiency variance – unfavorable P1,200
70. ANSWER D