Beruflich Dokumente
Kultur Dokumente
EASY
2. IDENTIFICATION. The expression of what an organization wishes to accomplish and how it will serve its
customers is contained in the __________________________.
3. Financial accounting
5. True or False. A predictor which has an absolute cause and effect relationship to a cost is referred to a cost
driver.
a. standards
c. normal costing
Sales $400,000
9. Value Pro produces and sells a single product. Information on its costs follow:
Variable costs:
Fixed costs:
Refer to Value Pro. Assume Value Pro produced and sold 5,000 units. At this level of activity, it produced a
profit of $18,000. What was Value Pro's sales price per unit?
a. $15.00 c. $9.60
b. $11.40 d. $10.00
10. Evita Company, a reseller of women’s fashions, has budgeted its activity for March. The budget
information is presented below:
V. Selling and administrative expenses are budgeted at $60,000 for March and are paid in cash.
VII. The invoice cost for merchandise purchases represents 75% of sales price. All purchases are paid for in
cash.
Refer to Evita Company. The budgeted cash receipts for March are:
a. $412,500 c. $585,000
b. $137,500 d. $550,000
AVERAGE
2. If an actual discretionary cost is exactly equal to the budgeted level of that cost, which of the following
statements is true?
4. IDENTIFICATION. The transfer of authority, responsibility, and decision-making rights from the top to the
bottom of an organization is referred to as ___________________________.
5. A company should decide to make, rather than to buy, a part required for their product, if the:
b. Relevant cost per unit of making the part exceeds the per-unit relevant costs of purchasing the part
6. In the pharmaceutical or food industries, quality control inspections would most likely be viewed as
7. Total production costs for Jordan, Inc. are budgeted at P2,300,000 for 50,000 units of budgeted output and
P2,800,000 for 60,000 units of budgeted output. Because of the need for additional facilities, budgeted fixed
costs for 60,000 units are 25 percent more than budgeted fixed costs for 50,000 units. How much is Jordan’s
budgeted variable cost per unit of output?
A. P 7.50 C. P30.00
B. P16.00 D. P62.50
8. Harding Corporation manufactures batons. Harding can manufacture 300,000 batons a year at a variable
cost of $750,000 and a fixed cost of $450,000. Based on Harding's predictions, 240,000 batons will be sold at
the regular price of $5.00 each. In addition, a special order was placed for 60,000 batons to be sold at a 40
percent discount off the regular price. The unit relevant cost per unit for Harding's decision is
a. $1.50.
b. $2.50.
c. $3.00.
d. $4.00.
9. IDENTIFICATION. The following data were abstracted from the records of Cinnamon Corporation for the
year ended June 30, 2019:
Sales P1,800,000
A. 7.67 C. 12.67
B. 11.67 D. 13.67
10. The Parkour Commercial Bank and Island Corporation agreed to the following loan proposal:
15% of the loan as compensating balance on 0% interest current account to be maintained by Island
Corporation with Parkour Commercial Bank.
The loan requires a net proceeds of P1.5 million. What is the principal amount of loan applied for as part of
loan agreement?
A. P1,666,667
B. P2,000,000
C. P1,764,706
D. P1,125,000
DIFFICULT
1. Companies A and B are in the same industry and have similar characteristics except that Company A is more
leveraged than Company B. Both companies have the same income before interest and taxes and the same
total assets. Based on this, we can conclude that:
2. IDENTIFICATION. What is the market where banks and non-deposit financial institutions settle contracts
with each other and with central banks?
3. These are bonds issued in a country other than that of the currency of denomination.
A. Foreign bonds
B. Covered bonds
D. Eurobonds
4. Which of the following is not one of the three objectives of a quality program?
b. A quality program should give management confidence that the quality is and will be at a constant level.
c. A quality program should give customers confidence that the intended quality will be achieved in products.
d. Product quality should always vary because customers change their wants and needs over time.
5. What is the maximum dividend payout ratio consistent with not requiring external funds for a firm with an
ROE of 15%, a debt-equity ratio of 50%, and an annual sales growth objective of 9%?
6. IDENTIFICATION. The current assets of Mamma Mia Enterprise consists of cash, accounts receivable, and
inventory. The following information is available:
7. IDENTIFICATION. This is the simultaneous purchase of an undervalued asset or portfolio and sale of an
overvalued but equivalent asset or portfolio.
8. In comparing an ordinary annuity and an annuity due, which of the following is true?
A. The future value of an annuity due is always greater than the future value of an otherwise identical ordinary
annuity.
B. The future value of an ordinary annuity is always greater than the future value of an otherwise identical
annuity due.
C. The future value of an annuity due is always less than the future value of an otherwise identical ordinary
annuity since one less payment is received with an annuity due.
D. All things being equal, one would prefer to receive an ordinary annuity compared to an annuity due.
9. This is a purchase of securities by one party from another with the agreement to sell them.
A. REPO
B. Open REPO
C. Term REPO
D. Reverse REPO
10. The Caravan Company is contemplating to purchase a machine that costs P800,000. The machine is
expected to last for 5 years with a salvage value of P50,000 at the end of the fifth year. If the machine were
purchased, before-tax annual cash savings on operating expenses will be realized. Caravan Company will
depreciate the machine using straight-line depreciation for 5 years, with the salvage value considered in the
computation.
The company has a 12 percent cost of capital and is subject to 40 percent tax rate.
The initial analysis indicated a net present value of P7,003. You believe the estimated before-tax cash savings
are fairly determined but you are in doubt of the expected salvage value of the machine. How much is the
estimated salvage value required if the investment has to yield an IRR of 12 percent?
A. P41,800
B. P24,900
C. P25,100
D. P44,600