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MANAGEMENT ACCOUNTING
FINAL EXAMINATION
Direction: Choose the letter corresponds to the best answer. Write CAPITAL LETTER
ONLY for your answer.
A. Standard costs are estimates of costs attainable only under the most ideal
conditions, but rarely practicable.
The purchase prices of the raw materials used in the manufacture of this new
chemical solution are as follows:
A. P1,043.20 C. P 834.56
B. P1,304.00 D. P1,234.00
4. El Andre Co. uses a standard costing system in connection with the manufacture
of a line of T-shirts. Each unit of finished product contains 2.25 yards of direct
material. However, a 25 percent direct material spoilage calculated on input
quantities occurs during the manufacturing process. The cost of the direct
materials is P150 per yard. The standard direct material cost per unit of finished
product is
A. P 253 C. P 450
B. P 422 D. P 405
5. The Vandana Company has a signature scarf for ladies that is very popular.
Certain production and marketing data are indicated below:
The allowance for rejected scarf is not part of the 0.475 yard of cloth per scarf.
Rejects have no market value. Materials are used at the start of production.
Calculate the standard cost of cloth per scarf that Vandana Company should use
in its cost sheets.
A. P19.85 C. P19.40
B. P20.00 D. P19.90
What is the standard labor time to produce one 10-liter batch of Bysap?
A. 35 minutes C. 48 minutes
B. 40 minutes D. 45 minutes
7. Under a standard cost system, the materials quantity variance was recorded at
P1,970 unfavorable, the materials price variance was recorded at P3,740
favorable, and the Goods in Process was debited for P51,690. Ninety-six
thousand units were completed. What was the per unit price of the actual
materials used?
8. Blake Company has a standard price of P5.50 per pound for materials. July’s
results showed an unfavorable material price variance of P44 and a favorable
quantity variance of P209. If 1,066 pounds were used in production, what was
the standard quantity allowed for materials?
A. 1,104 C. 1,066
B. 1,074 D. 1,100
9. Elite Company uses a standard costing system in the manufacture of its single
product. The 35,000 units of raw material in inventory were purchased for
P105,000, and two units of raw material are required to produce one unit of final
product. In November, the company produced 12,000 units of product. The
standard allowed for material was P60,000, and there was an unfavorable
quantity variance of P2,500. The materials price variance for the units used in
November was
A. P 2,500 U C. P12,500 U
B. P11,000 U D. P 3,500 F
12.The Bohol Company uses standard costing. The following data are available for
October:
Standard quantity of direct materials allowed for May production 29,000 lbs
For the month of May, Dulce’s direct materials price variance was:
14.The flexible budget for the month of May 2007 was for 9,000 units with direct
material at P15 per unit. Direct labor was budgeted at 45 minutes per unit for a
total of P81,000. Actual output for the month was 8,500 units with P127,500 in
direct material and P77,775 in direct labor expense. Direct labor hours of 6,375
were actually worked during the month. Variance analysis of the performance
for the month of May would show a(n):
A. 3,700 C. 3,850
B. 4,150 D. 4,000
Kent Company plans to produce its only product equally each month. The annual
budget for overhead costs are:
In March, Kent Company produced 2,450 units with actual direct labor hours used of
5,050. Actual overhead costs for the month amounted to P37,245 (Fixed overhead is
as budgeted.)
18.Calma Company uses a standard cost system. The following budget, at normal
capacity, and the actual results are summarized for the month of December:
Using the two-way analysis of overhead variance, what is the controllable variance for
December?
The Fire Company has a standard absorption and flexible budgeting system and uses a
two-way analysis of overhead variances. Selected data for the June production activity
are:
20.The following data are the actual results for Wow Company for the month of
May:
21.The Sacto Co.’s standard fixed overhead cost is P3 per direct labor hour based
on budgeted fixed costs of P300,000. The standard allows 2 direct labor hours
per unit. During 2006, Sacto produced 55,000 units of product, incurred
P315,000 of fixed overhead costs, and recorded P106,000 actual hours of direct
labor. What are the fixed overhead variances?
A. P15,000 U P30,000 F
B. P33,000 U P30,000 F
C. P15,000 U P18,000 F
D. P33,000 U P18,000 F
Spending Efficiency
Questions 23 and 24 are based on a monthly normal volume of 50,000 units (100,000
direct labor hours). Raff Co.’s standard cost system contains the following overhead
costs:
Variable P250,000
Fixed 384,000
23.For March, the unfavorable variable overhead spending variance was:
A. P6,000 C. P12,000
B. P10,000 D. P22,000
A. P96,000U C. P80,000U
B. P96,000F D. P80,000F
The following information will be used to answer Question Nos. 25 through 28:
Garch, Inc. analyzes manufacturing overhead in the production of its only one product,
CD. The following set of information applies to the month of May, 2006:
Budgeted Actual
28.How much overhead efficiency variance resulted for the month of May?
29.Lone Star has computed the following unit costs for the year just ended:
Direct labor 18
Variable manufacturing overhead 25
Under variable costing, each unit of the company's inventory would be carried at:
30.Prescott Corporation has computed the following unit costs for the year just
ended:
Direct labor 27
Under absorption costing, each unit of the company's inventory would be carried at:
Indiana Company incurred the following costs during the past year when planned
production and actual production each totaled 20,000 units:
31.If Indiana uses variable costing, the total inventoriable costs for the year would
be:
Production costs:
Fixed: $260,000
Fixed: $32,000
The gross margin that the company would disclose on an absorption-costing income
statement is:
34.McAfee, which began business at the start of the current year, had the following
data:
Production costs:
Fixed: $260,000
Fixed: $32,000
35.The following data relate to Lobo Corporation for the year just ended:
Franz began business at the start of this year and had the following costs: variable
manufacturing cost per unit, $9; fixed manufacturing costs, $60,000; variable selling
and administrative costs per unit, $2; and fixed selling and administrative costs,
$220,000. The company sells its units for $45 each. Additional data follow.
38.Monex reported $65,000 of net income for the year by using absorption costing.
The company had no beginning inventory, planned and actual production of
20,000 units, and sales of 18,000 units. Standard variable manufacturing costs
were $20 per unit, and total budgeted fixed manufacturing overhead was
$100,000. If there were no variances, net income under variable costing would
be:
39.Canyon reported $106,000 of net income for the year by using variable costing.
The company had no beginning inventory, planned and actual production of
50,000 units, and sales of 47,000 units. Standard variable manufacturing costs
were $15 per unit, and total budgeted fixed manufacturing overhead was
$150,000. If there were no variances, net income under absorption costing
would be:
A. absorption costing.
B. variable costing.
C. direct costing.
D. semivariable costing.
Prepared by:
Instructor 6
Verified By:
CHARMAINE NIDOY
OIC, DEAN