Você está na página 1de 7

POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

COLLEGE OF ACCOUNTANCY
ACCO 4113 - Management Services
SECOND EVALUATION EXAMINATION
May 24, 2018

Instructions: Choose the BEST answer for each of the following items. For all questions requiring solutions, show your
computations in a separate worksheet provided.

1. The process of evaluating financial data that change under alternative courses of action is called
a. Double entry analysis.
b. Contribution margin analysis.
c. Incremental analysis.
d. Cost-benefit analysis.

2. This area is concerned with providing information to personnel within an organization so that they can plan,
make decisions, evaluate performance, and control operations.
a. Managerial accounting
b. Financial accounting
c. Auditing
d. Taxation

3. In capital expenditures decisions, the following are relevant in estimating operating costs except
a. Future costs.
b. Historical costs.
c. Cash costs.
d. Differential costs.

4. Which of the following is NOT an ethical standard of managerial accounting?


a. Competence
b. Confidentiality
c. Integrity
d. Flexibility

5. Which of the following methods measures the cash flows and outflows of a project as if they occurred at a single
point in time?
a. Cash flow based payback period
b. Payback method
c. Discounted cash flow
d. Capital budgeting

6. The discount rate that equates the present value of the expected cash flows with the cost of the investment is
the
a. Net Present Value.
b. Internal Rate of Return.
c. Accounting Rate of Return.
d. Payback Period.

7. To approximate annual cash inflow, depreciation is


a. Added back to net income because it is an inflow of cash.
b. Subtracted from net income because it is an outflow of cash.
c. Added back to net income because it is not an outflow of cash.
d. Subtracted from net income because it is an expense.

8. Which of the following combinations is NOT possible?


Profitability Index NPV IRR
a. Equals 1 Zero Equals cost of capital
b. Less than 1 Negative Less then cost of capital
c. Greater than 1 Positive More than cost of capital
d. Less than 1 PositiveLess than cost of capital

9. In which order are the following developed? 1. Production 2. Materials 3. Demand forest 4. Sales plan
a. first to last: 1, 2, 3, 4
1
b. first to last: 4, 3, 2, 1
c. first to last: 3, 4, 1, 2
d. first to last: 3, 1, 4, 2

10. MAS covers all areas of serving management except


a. Finance and accounting.
b. Industrial engineering, marketing and production.
c. Logistics, human resources, information and communications technology.
d. Audit, tax, and legal services

11. A decentralized organization does all the following except it


a. trains employees in skills needed for decision making.
b. assigns responsibility to front-line employees.
c. encourages local success rather than organizational success.
d. adapts to the local business environment.

12. For external reporting,


a. costs reflect current values.
b. there are no prescribed rules since no one is exactly sure how the investors and creditors will use these
numbers.
c. costs are classified as either product or period costs.
d. expenses include amounts that reflect current and future benefits.

13. The difference between the reported income under absorption and variable costing is attributable to the
difference in the
a. income statement formats.
b. treatment of variable manufacturing overhead.
c. treatment of variable selling, general, and administrative expenses.
d. treatment of fixed manufacturing overhead.

14. If a firm produces more units than it sells, absorption costing, relative to variable costing, will result in
a. higher income but lower assets.
b. higher income and assets.
c. lower income but higher assets.
d. lower income and assets.

15. Which of the following term is best identified with a system of standard cost?
a. Contribution approach.
b. Management by exception.
c. Marginal costing.
d. Standard accounting system.

16. The salary for working at fast food chain that is sacrificed by a PUP student who pursues an accounting degree
full time is a(an)
a. joint cost.
b. out-of-pocket cost.
c. opportunity cost.
d. differential cost.

17. Which of the following should be ignored when choosing among alternatives?
a. Sunk cost.
b. Incremental cost.
c. Opportunity cost.
d. Differential cost.

18. Product costs are


a. expensed when incurred.
b. treated in the same manner as period costs.
c. inventoried.
d. immediately charged against revenues.

19. Monthly production costs can be expressed as


a. Y = ax + b.
2
b. Y = a + bx.
c. Y = ∑a + bx.
d. Y = a + ∑bx.

20. Under variable costing, fixed manufacturing overhead is


a. never expensed.
b. expensed immediately when incurred.
c. treated in the same manner as variable manufacturing overhead.
d. applied directly to Work-in-Process Inventory.

21. Accounts receivable turnover will normally decrease as a result of


a. A change in credit policy to lengthen the period for cash discounts.
b. A significant sales volume decrease near the end of the accounting period.
c. The write-off of an uncollectible account (assume the use of the allowance for doubtful accounts
method).
d. An increase in cash sales in proportion to credit sales.

22. If a firm is at full capacity, the minimum special order price must cover
a. variable costs associated with the special order.
b. variable and fixed manufacturing costs associated with the special order.
c. variable and incremental fixed costs associated with the special order.
d. variable costs and incremental fixed costs associated with the special order plus foregone contribution
margin on regular units not produced.

23. Which of the following describes the goal that should be pursued when setting transfer prices?
a. Maximize profits of the buying division.
b. Maximize profits of the selling division.
c. Allow top management to become actively involved when calculating the proper dollar amounts.
d. Establish incentives for autonomous division managers to make decisions that are in the overall
organization's best interests (i.e., goal congruence).

24. When ranking two mutually exclusive investments with different initial amounts, management should give first
priority to the project
a. That generates cash flows for the longer period of time.
b. Whose net after-tax flows equal the initial investment.
c. That has the greater accounting rate of return.
d. That has the greater profitability index.

25. The ratios that are used to determine a company's short-term debt paying ability are
a. asset turnover, times interest earned, current ratio, and receivables turnover.
b. times interest earned, inventory turnover, current ratio, and receivables turnover.
c. times interest earned, acid-test ratio, current ratio, and inventory turnover.
d. current ratio, acid-test ratio, receivables turnover, and inventory turnover.

26. Y= P800, 000 + P12x represents the behaviour of maintenance costs (Y) as a function of machine hours (x). Fifty
(50) monthly observations were used to develop the foregoing regression equation. The related coefficient of
determinations was 0.85. If 10, 000 machines hours were worked in one month, the related point of estimate of
total variable maintenance costs would be
a. P192, 000 c. P141, 176
b. P120, 000 d. P102, 000

Items 27 to 28 are based on the following information:


The following information has been extracted from Nike Co.’s financial records for its first year of operations:
Units produced 10,000
Units sold 7,000
Variable costs per unit:
Direct material P8
Direct labor 9
Manufacturing overhead 3
SG&A 4
Fixed costs:
Manufacturing overhead P70,000
SG&A 30,000
3
27. Based on absorption costing, Nike Co.’s income in its first year of operations will be
a. P21,000 lower than it would be under variable costing.
b. P21,000 higher than it would be under variable costing.
c. P30,000 lower than it would be under variable costing.
d. P30,000 higher than it would be under variable costing.

28. Based on absorption costing, what amount of period costs will Nike Co. deduct?
a. P70,000 c. P58, 000
b. P79,000 d. P49, 000

29. At its present level of operations, a small manufacturing firm has total variable costs equal to 75 percent of sales
and total fixed costs equal to 15 percent of sales. Based on variable costing, if sales change by P1.00, income will
change by
a. P0.10. c. P0.65.
b. P0.25. d. P0.75

Items 30 to 31 are based on the following information:


The Rubber Division of Adidas Company manufactures rubber moldings and sells them externally for P5, 000. Its
variable cost is P2, 000 per unit, and its fixed cost per unit is P700. Adidas's president wants the Rubber Division
to transfer 5,000 units to another company division at a price of P2, 700.

30. Assuming the Rubber Division has available capacity of 5,000 units, the minimum transfer price it should accept
is
a. P700. c. P2, 700.
b. P2, 000. d. P5, 000.

31. Assuming the Rubber Division does not have any available capacity, the minimum transfer price it should accept
is
a. P700. c. P2, 700.
b. P2, 000. d. P5, 000.

32. Puma Company consists of two divisions, A and B. Puma Company reported a contribution margin of P50, 000
for Division A, and had a contribution margin ratio of 30% in Division B, when sales in Division B were P200, 000.
Net income for the company was P25, 000 and traceable fixed expenses were P40, 000. Puma Company's
common fixed expenses were
a. P85, 000. c. P40, 000.
b. P70, 000. d. P45, 000.
33. Bugatti Inc. ends the month with a volume variance of P6, 360 unfavorable. If budgeted fixed factory O/H was
P480, 000, O/H was applied on the basis of 32,000 budgeted machine hours, and budgeted variable factory O/H
was P170, 000, what were the actual machine hours (AH) for the month?
a. 32,424 c. 31,687
b. 32,000 d. 31,576

34. Mexx Manufacturing Co. has an expected production level of 200,000 product units for 2016. Fixed factory
overhead is P600, 000 and the company applies factory overhead on the basis of expected production level at
the rate of P7.50 per unit. The variable overhead cost per unit is
a. P3.00 c. P3.75
b. P4.50 d. P7.50

35. Given this data:


After-tax net inflows are: P24, 000 for year 1, P30, 000 for year 2, P36, 000 for year 3, and P30, 000 for year 4.
Initial investment outlay is P60, 000
Cost of capital is 18%
Determine the payback period for this investment:
a. 2.50 years. c. 3.00 years
b. 2.17 years. d. 3.17 years

36. Each unit of product GEOX takes six direct labor hours to make. Quality standards are high and 10 % of units
produced are normally rejected due to substandard quality. Next month’s budgets are as follows:
Beginning inventory of finished goods 5,000 units
Planned ending inventory of finished goods 10,000 units
Budgeted sales of GEOX 40,000 units
4
All stocks of finished goods must have successfully passed the quality control check. What is the direct labor
budget for the month?
a. 233, 333 hours c. 240,000 hours
b. 270,000 hours d. 300,000 hours

37. Koil Inc. is considering replacing equipment that cost P1, 000, 000 ten years ago with a new one that would cost
P3, 000, 000. Shipping and installation would cost an additional 10% of the purchase price. The old equipment
has a book value of P300, 000 and could be sold currently for P100, 000. The increased production of the new
equipment would increase inventories by P300, 000, accounts receivable by P200, 000 and accounts payable by
P250, 000. Koil’s net initial investment for analyzing the acquisition of the new equipment assuming a 40%
income tax rate would be
a. P3,470,000 c. P3,530,000
b. P3,370,000 d. P3,450,000

38. Timberland is considering the sale of a plant facility with a book value of P500, 000 and 5 years remaining in its
useful life. Straight-line depreciation of P100, 000 annually is available. The plant facility has a current market
value of P800, 000. What is the cash flow from selling the plant facility if the tax rate 35%?
a. P905, 000 c. P695,000
b. P520, 000 d. P800,000

39. Indigo Company is considering the purchase of machinery. Data on the machinery are as follows:
Original investment P400, 000
Net annual cash inflow P150, 000
Expected economic life in years 5
Salvage value at the end of five years P50, 000
The company uses the straight-line method of depreciation with no mid-year convention. What is the accounting
rate of return on original investment rounded off to the nearest percent, assuming no taxes are paid?
a. 37.5% c. 20.0%
b. 22.0% d. 17.5%

40. A company is considering putting up P60, 000 in a three-year project. The company’s expected rate of return is
12%. The present value of P1.00 at 12% for one year is 0.893, for two years is 0.797, and for three years is 0.712.
The cash flow, net of income taxes will be P18, 000 (present value of P16, 074) for the first year and P22, 000
(present value of P17, 534) for the second year. Assuming that the rate of return is exactly 12%, the cash flow,
net of income taxes, for the third year would be
a. P14, 240 c. P26, 392
b. P23, 022 d. P37, 067

41. An investment project is expected to yield P10, 000 in annual revenues, has P2, 000 in fixed costs per year, and
requires an initial investment of P5, 000. Given a cost of goods sold of 60 percent of sales, what is the payback
period in years?
a. 2.50 c. 2.00
b. 0.40 d. 1.25

42. Assume that the Steel Division has a product that can be sold either to outside customers on an intermediate
market or to Fabrication Division of the same company for use in its production process. The different divisions
are evaluated based on their divisional profits.

Steel Division
Capacity in units 200, 000
Number of units being sold on the intermediate market 200, 000
Selling price per unit on the intermediate market P90
Variable cost per unit inclusive of variable selling expense of P3 70
Fixed cost per unit (based on capacity) 13

Fabrication Division
Number of units needed for production 40, 000
Purchase price per unit now being paid to an outside supplier P86

The appropriate transfer price should be


a. P90 c. P70
b. P87 d. P86
5
43. The maximum price should be
c. P90 c. P70
d. P87 d. P86

44. Bearing Division of Phantom UrTurn Corporation sells 80,000 units of Part X to the outside market. Part X sells for
P10 and has a variable cost of P5.50 and a fixed cost per unit of P2.50. Bearing has a capacity to produce 100,000
units per period. Motor Division currently purchases 10, 000 units of Part X from Bearing for P10.00. Motor has
been approached by an outside supplier that is willing to supply the parts for P9.00.

What is the effect on Phantom UrTurn’s overall profit if Bearing refuses the outside price and Motor decides to
buy outside?
a. No change.
b. P20, 000 decrease in Phantom UrTurn profits.
c. P35, 000 decrease in Phantom UrTurn profits.
d. P10, 000 increase in Phantom UrTurn profits.

45. The following information pertains to Ambush Corporation for the year ending December 31, 2017:

Beginning sales 1, 000, 000


Breakeven sales 700, 000
Budgeted contributed margin 600, 000
Cash flow breakeven 200, 000

The margin of safety for the Ambush Corporation is


a. P300, 000 c. P500, 000
b. P400, 000 d. P800, 000

46. Sales of 25,000 units at P7.20 per unit are made monthly. The unit cost is P5.90. Incremental costs of P1.35 per
unit to further process the units will result in the 25, 000 units being sold for P8.75 each. Which course of action
should the company take?
a. Commit its resources to a different product.
b. Sell the units at the current stage of completion.
c. Do further processing and sell the units at P8.75.
d. Do further processing on only one half of the units.

47. Hugo Voss Company sells its single product for P30 per unit. The contribution margin ratio is 45%, and fixed costs
are P10, 000 per month. Hugo Voss has an effective income tax rate of 40%. If Hugo Voss sells 1,000 units in the
current month, Hugo Voss's variable expenses would be
a. P13, 500 c. P9, 900
b. P16, 500 d. P12, 000

48. Hitchcock, Inc., uses the high-low method to analyze cost behavior. The company observed that at 12,000
machine hours of activity, total maintenance costs averaged P7.00 per hour. When activity jumped to 15,000
machine hours, which was still within the relevant range, the average cost per machine hour totaled P6.40. On
the basis of this information, the variable cost per machine hour was
a. P4.00 c. P6.70
b. P6.40 d. P7.00

49. FSPN Manufacturing Corporation is using the following flexible-budget formula for annual indirect labor cost.
Total Cost = P12, 000 + P0.75 per machine hour

For the month of April, the operating budgets are based upon 10, 000 hours of planned machine time. Indirect
labor costs included in this planning budget are
a. P7, 500 c. P17, 500
b. P8, 500 d. P19, 500

50. What do you wish to happen this year 2018?


a. I will graduate this year.
b. I will graduate this year.
c. I will graduate this year.
d. All of the above.

6
**End of Examination**
Good Luck and God Bless You– GJMSanchez 

“Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do.
So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream.
Discover.” -Mark Twain 

Você também pode gostar