SAN CARLOS COLLEGE PANGASINAN

Answer Section

MULTIPLE CHOICE
LONG TEST MAS
1. ANS: A DIF: Easy OBJ: 1-1
2. ANS: D DIF: Easy OBJ: 1-1
3. ANS: B DIF: Easy OBJ: 1-2
4. ANS: B DIF: Easy OBJ: 1-2
5. ANS: C DIF: Easy OBJ: 1-3
6. ANS: C DIF: Easy OBJ: 1-4
7. ANS: D DIF: Moderate OBJ: 1-5
8. ANS: C DIF: Moderate OBJ: 1-7
9. ANS: A DIF: Easy OBJ: 5-3
10. ANS: C DIF: Easy OBJ: 5-5
11. ANS: D DIF: Easy OBJ: 5-2
12. ANS: B DIF: Easy OBJ: 5-2
13. ANS: B DIF: Easy OBJ: 5-2
14. ANS: B DIF: Easy OBJ: 5-2
15. ANS: D DIF: Moderate OBJ: 5-3
16. ANS: A DIF: Easy OBJ: 5-3
17. ANS: B DIF: Easy OBJ: 5-3
18. ANS: C DIF: Easy OBJ: 5-4
19. ANS: C DIF: Easy OBJ: 5-5
20. ANS: B DIF: Easy OBJ: 5-2
21. ANS: C DIF: Difficult OBJ: 5-6
22. ANS: D
Total OH Proportion Allocated Units OH per DM and Total
OH Produced Unit DL/Unit
P 780,000 0.917431193 P 715,596.33 8000 P 89.44 P 22.00 P 111.44
(80,000/87,200)

DIF: Moderate OBJ: 5-3

23. ANS: A
Setup cost = P500.00
Units produced = 500

P500.00/500 = P1.00/unit

DIF: Moderate OBJ: 5-3

24. ANS: A
P0.09 * 20,000 = P1,800

DIF: Easy OBJ: 5-4

25. ANS: C
Activity Cost Allocation Cost per Unit
1 P20,000 * 100/500 = P 4,000 / 8,000 P0.50
 2 P37,000 * 800/1,000 = P29,600 / 8,000 3.70
3 P91,200 * 800/3,800 = P19,200 / 8,000 2.40
Total Cost per Unit 6.60

DIF: Difficult OBJ: 5-4

26. ANS: D
Activity Cost Allocation Cost per Unit
1 P20,000 * 400/500 = P 16,000 / 6,000 P2.67
2 P37,000 * 200/1,000 = P 7,400/ 6,000 1.23
3 P91,200 * 3,000/3,800 = P72,000 / 6,000 12.00
Total Cost per Unit 15.90

DIF: Difficult OBJ: 5-4

27. ANS: C
P20 is the incremental internal cost of the chip.

DIF: Moderate OBJ: 13-5

28. ANS: B
P45 is the external price paid for the chip.

DIF: Moderate OBJ: 13-5

29. ANS: D
Transfer prices are for internal use only; external profits are not affected.

DIF: Moderate OBJ: 13-5

30. ANS: B
P100 represents the price at which the good could be obtained externally.

DIF: Moderate OBJ: 13-5

31. ANS: A
P96 represents the external sales price less the selling expenses that will not be incurred.

DIF: Moderate OBJ: 13-5

32. ANS: C
Selling costs of P50,000 (P10/unit) will not be incurred.

DIF: Moderate OBJ: 13-5

33. ANS: C
Variable costs = P(0.50 + 0.30 + 0.15) = P0.95

DIF: Moderate OBJ: 13-5

34. ANS: B DIF: Easy OBJ: 13-4
35. ANS: D DIF: Easy OBJ: 13-4
36. ANS: B DIF: Easy OBJ: 13-4
37. ANS: A DIF: Easy OBJ: 13-4
38. ANS: A
P900,000 * (300,000/1,250,000) = P216,000

DIF: Moderate OBJ: 13-4

 39. ANS: A
P900,000 * P(800,000/1,250,000) = P576,000

DIF: Moderate OBJ: 13-4

40. ANS: B
P900,000 * P(600,000/1,850,000) = P291,282

DIF: Moderate OBJ: 13-4

41. ANS: C
P900,000 * P(300,000/1,850,000) = P145,946

DIF: Moderate OBJ: 13-4

42. ANS: C
P860,000 * (15/30) = P430,000

DIF: Moderate OBJ: 13-4

MAJOR EXAMINATION FOR MAS

1.ANS: A
P850,000 * (1,800/8,500) = P180,000

DIF: Moderate OBJ: 13-4

2. ANS: A
P600,000 * 30/70 = P257,143

DIF: Moderate OBJ: 13-4

3.ANS: A
P1,000,000 * P(125,000/345,000) = P362,319

DIF: Moderate OBJ: 13-4

4. ANS: B DIF: Moderate OBJ: 13-4
5. ANS: C
Maintenance is allocated first, and 20% is added to the original utilities cost.
P9,000 + (P18,700 * .20) = P(9,000 + 3,740) = P12,740.

DIF: Moderate OBJ: 13-4

6. ANS: A DIF: Easy OBJ: 19-4
7. ANS: C DIF: Moderate OBJ: 19-4
8. ANS: C DIF: Moderate OBJ: 19-4
9. ANS: D DIF: Easy OBJ: 19-4
10. ANS: C DIF: Easy OBJ: 19-4
11. ANS: B
ROI = Profit Margin  Asset Turnover
.20 = PM  5
PM = ROI/Asset Turnover
 PM = .04 or 4%

DIF: Easy OBJ: 19-4

12. ANS: D DIF: Easy OBJ: 19-4
13. ANS: C
ROI = Income / Assets Invested

Income = Residual Income + (Target Rate * Assets)

= P270,000 + (.10 * P1,800,000)
= P450,000

ROI = P(450,000/1,800,000)
= 25%

DIF: Moderate OBJ: 19-4

14. ANS: A
Segment Income = ROI * BV of Total Assets
= 0.15 * P1,000,000
= P150,000

DIF: Moderate OBJ: 19-4

15. ANS: D
EVA = After Tax Net Income - (Cost of Capital  Market Value of Assets)
EVA = ((P2,000,000 * .25)  .60) - (.10  P3,600,000)
EVA = P(300,000 - 360,000)
EVA = P(60,000)

DIF: Moderate OBJ: 19-4

16.ANS: C
Net Income - (Target Rate of Return  Total assets) = Residual Income
P500,000 - (Target Rate of Return * P2,000,000) = P200,000
Target Rate of Return * P2,000,000 = P300,000
Target Rate of Return = 15%

DIF: Moderate OBJ: 19-4

17. ANS: D
P100,000 * .25 = P25,000

DIF: Moderate OBJ: 19-4

18.ANS: A
0.20 - 0.15 = 0.05 residual income
P10,000 / 0.05 = P200,000

DIF: Moderate OBJ: 19-4

19. ANS: D
(ROI  Total Assets) - (Target Rate  Total Assets) = Residual Income
(ROI  P1,000,000) - (0.12  P1,000,000) = P150,000
(ROI  P1,000,000) = P270,000
ROI = 27%
 DIF: Moderate OBJ: 19-4
20. ANS: C
Residual Income = P(10,000,000 - 7,500,000) - ((.16) * P6,000,000)
= P(2,500,000 - 960,000)
=P1,540,000

DIF: Moderate OBJ: 19-4

21. ANS: D
Profit Margin = Gross Margin/Sales
= P(1,750,000/8,000,000)
= 22%

DIF: Moderate OBJ: 19-4

22.ANS: A
P8,000,000/(P((5,000,000 + 5,400,000)/2) = 1.538

DIF: Moderate OBJ: 19-4

23. ANS: A

  = 1. units

DIF: Easy OBJ: 19-7

24.ANS: C

= 80%

DIF: Easy OBJ: 19-7

25. ANS: D

= 833 units

DIF: Moderate OBJ: 19-7

26. ANS: C DIF: Moderate OBJ: 19-8
27.ANS: D DIF: Easy OBJ: 19-8
28. A
29.A downward-sloping demand curve shows:
a. the direct relationship between price and quantity supplied; as price increases, the quantity
supplied increases.
b. the inverse relationship between price and quantity supplied; as price increases, the
quantity supplied decreases.
c. the direct relationship between price and quantity demanded; as price increases, the
quantity demanded increases.
d. the inverse relationship between price and quantity demanded; as price increases, the
quantity demanded decreases.
e. how supply varies with demand.
ANS: D PTS: 1
30. A price ____ set ____ the equilibrium price will lead to a shortage.
a. ceiling; above
b. ceiling; below
c. floor; above
d. floor; below
ANS: B PTS: 1
31. What type of demand curve is depicted by the graph below?

a. perfectly inelastic
b. perfectly elastic
c. unit elastic
d. relatively inelastic
ANS: A PTS: 1
32. The difference between the amount a consumer is willing to pay and the amount they actually must pay for a good
is called the:
a. price elasticity of demand.
b. substitution effect.
c. consumer surplus.
d. income elasticity of demand.
e. marginal utility.
ANS: C PTS: 1
33. Structural unemployment includes:
a. unemployment caused by workers who leave positions to seek better jobs.
b. unemployment caused by automation that displaces workers from their jobs.
c. unemployment caused by a decline in the economy's total production.
d. unemployment caused by the geographical and occupational mobility of the labor force.
e. all of the above.
ANS: B PTS: 1
34. The formula from the expenditure method indicates that GDP is equal to:
a. C + I - G - EX - IM
b. C + I - G + EX - IM
c. C + I + G + EX - IM
d. C + I + G + IM - EX
ANS: C PTS: 1
35. A country will roughly double its GDP in five years if its annual growth rate is:
a. 5 percent.
b. 7 percent.
c. 12 percent.
d. 14 percent.
e. 20 percent.
 ANS: D PTS: 1
36. The government's fiscal policy is its plan to regulate aggregate demand by manipulating:
a. the money supply.
b. taxation and spending.
c. the treasury.
d. the energy department.
ANS: B PTS: 1
37. If inflation is the major problem in the economy, which of the following would be an appropriate monetary policy
response?
a. decreasing reserve requirements
b. increasing the discount rate
c. buying government bonds
d. none of the above
ANS: B PTS: 1

38. A
39. B
40. D
41. E
42. A
43. E
44. D
45. D
46. D
47. C
48. E
NS:A DIF: Easy OBJ: 19-8