First Pre-board Examination
INSTRUCTIONS: Select the best answer for each of the following questions. Mark only one answer for
each item on the answer sheet provided. Strictly NO ERASURES ALLOWED. Erasures will render your
examination answer sheet INVALID. Use PENCIL NO. 2 only. GOODLUCK!
1. Cost accounting provides all of the following EXCEPT:
a. information for management accounting and financial amounting
b. pricing information from marketing studies
c. financial information regarding the cost of acquiring resources
d. nonfinancial information regarding the cost of operational efficiencies
2. Whose perceptions of the company's products or services are the most important to the
manager?
a. board of directors' perception
b. customer’s perception
c. president’s perception
d. stockholder’s perception
3. A major advantage of using standard costs is that
a. they are easier to compute than actual costs.
b. they are lower than actual costs.
c. products with standard costs can be sold at lower prices
d. they provide information for the control purposes.
4. Actual costing and normal costing differ in treating
a. materials cost.
b. direct labor cost.
c. overhead cost.
d. all of the given choices.
5. The source of standards that uses the best performance measures anywhere is:
a. activity analyses
b. historical data
c. benchmarking
d. market expectations
6. Cosco, Inc. has accumulated the following data for the cost of maintenance on its machinery for
the last few months:
Month
Maintenance cost
Machine hours
September
P26.020
P21,000
October
24,600
18,500
November
22,300
15,000
December
25,100
19,000
Assuming Cosco Company uses the high-low method of analysis, if machine hours are budgeted
to be 20,000 hours then the budgeted total maintenance cost would be expected to be:
a. P25,400
b. 25,560
c. 23,700
d. 24,720
7. Goodness-of-fit measures how well the predicted values in a cost estimating equation
a. match the cost driver.
b. determine the level of activity.
c. match the actual cost observations.
d. rely on tire independent variable.
8. Management by exception is the practice of concentrating on
a. the master budget
b. areas that are not operating as anticipated.
c. favorable variances only.
d. unfavorable variances only.
9. The flexible budget contains
a. Budgeted amounts for actual output.
b. Budgeted amounts for planned output.
c. Actual cost for actual output.
d. Actual cost for planned output.
10. The following items are the same for the flexible budget and the fixed budget except: 1
a. the same variable cost per unit.
b. the same total fixed costs.
c. the same units sold
d. the same sales price per unit.
11. A firm has fixed costs of P200,000 and variable costs per unit of P6. It plans on selling 40,000
units in the coming year. If the firm pays income taxes on its income at a rate of 40%, what sales
price must the firm use to obtain an after-tax profit-of P24, 000 on the 40,000 units?
a. P11.60
b. P11.36
c. P12.00
d. P12.50
12. Fixed manufacturing overhead was budgeted at P500,000 and 25,000 direct labor hours were
budgeted. If the fixed overhead volume variance was P12.000 favorable and the fixed overhead
spending variance was PP16,000 unfavorable and the company is using standard costing, then
standard hours must be
a. 24,400
b. 25,600
c. 25,800
d. 24,200
13. Franklin Grass Works' production budget for the year ended November 30, 2018 was based on
200,000 units. Each unit requires two standard hours of labor for correlation. Total overhead was
budgeted at P900,000 for the year, and the fixed overhead rate was estimated to be P3.00 per unit.
Both fixed and variable overhead are assigned to the product on the basis of direct labor hours.
The actual data for the year ended November 30, 2018 are presented below.
Actual production in units
198,000
Actual direct labor hours
440,000
Actual variable overhead
P 352,000
Actual fixed overhead P 575,000
Franklin's variable overhead efficiency variance for the year ended November 30, 2018 is
a. 30,000 unfavorable
b. P35,520 favorable
c. P33,000 favorable
d. P35,200 unfavorable
14. Operating income using variable costing as compared to absorption costing would be higher
a.
b.
c.
d.
when the quantity of beginning inventory equals the quantity of ending inventory.
when the quantity of beginning inventory is more than the quantity of ending inventory.
when the quantity of beginning inventory is less than the quantity of ending inventory.
under no circumstances.
15. The Swan Company produces their product at a total cost of P43 per unit. Of this amount, P8 per
unit is selling and administrative costs. The total variable cost is P30 per unit. The desired profit is
P20 per unit.
The markup percentage on the variable cost using the desired profit of P20 per unit is:
a. 100%
b. 80%
c. 110%
d. 46.5%
16. Which of the following statements is true about operating leverage?
a. The higher the firm’s leverage, the higher the degree of sensitivity of profits to cost
changes.
b. The higher the firm’s leverage, the lower the degree of sensitivity of profits to cost
changes.
c. The higher the firm's leverage, the higher the degree of sensitivity of profits to volume
changes.
d. The higher the firm’s leverage, the lower the degree of sensitivity of profits to volume
changes.
17.Western Co.has total budgeted fixed costs of P72,000. Actual production of 5,500 units resulted
in a P6,000 unfavorable volume variance. What was the normal capacity used to determine the
fixed overhead rate?
a. 5,000
b. 5,500
c. 6,000
d. Cannot be determined without further information.
18. Mayo Company that uses standard cost system in accounting for the cost of production of its only
product, Product A, had the following standards:
Direct Materials
Direct Labor
Overhead
10 feet of Rubber at P0.75 per foot and 3 feet of Wood at P1 per foot
4 hours at P3.50 per hour
Applied at 150% of standard direct labor costs.
There was no inventory on hand at the beginning of the year. Materials price variances are
isolated at the time of recording the purchase. Following is a summary of costs and related data
for the production of Product A during the year:
100,000 feet of Rubber were purchased at P0.78 per foot.
30,000 feet of Wood were purchased at P0.90 per foot.
8,000 units of Product A were produced which required
78,000 feet of Rubber; 26,000 feet of Wood; and
31,000 hours of direct labor at P3.60 per hour.
6,000 units of Product A were sold.
If all standard variances are prorated to inventories and cost of goods sold, the amount of material
usage variance of wood to be prorated to raw materials inventory would be
a. P0
b. P333 credit
c. P333 debit
d. 500 debit
19. Roxas Company currently sells 1,000 units of product M for P2 each. Variable costs are P1.50. A
discount store has offered P1.70 per unit for 400 units of product M. The managers believe that if
they accept the special order, they will lose some sales at the regular price. Determine the number
of units they could lose before the order become unprofitable.
a. 200 units
b. 160 units
c. 400 units
d. 500 units
20. An avoidable cost can be most accurately described as a(n):
a. cost that can be eliminated in whole or in part through a business decision or action.
b. cost involved in producing additional units of a product.
c. ongoing cost that remains unchanged regardless of a decision or action.
d. cost involved in producing fewer units of a product.
21. Capital Company has decided to discontinue a product that is produced on a machine that was
purchased four years ago at a cost of P70,000. The machine has a current book value of P30,000.
Due to technological advancement, machinery is now available in the marketplace that makes the
existing machine without any current salvage value. The company is reviewing the various
aspects involved in the production of a new product. The engineering staff advised that the
existing machine can be used to produce the new product. Other costs involved in the production
of the new product will be materials of P20,000 and labor priced at P5,000. Ignoring income
taxes, the costs relevant to the decision to produce or not to produce the new product would be:
a. P95,000
b. P55,000
c. P30,000
d. P25,000
22. Camel, Inc. has two major product lines: stoves and dryers. Camel’s management wants to
evaluate whether discontinuing dryers will increase profits. Which of the following is best for
evaluating the discontinuance of the dryer product line?
a. Absorption cost
b. Variable cost
c. Relevant cost
d. Throughput cost
23. The following information is taken from Tiger Co’s 2018 contribution income statement:
Sales
P200,000
Contribution margin
P120,000
Fixed costs
P 90,000
Income taxes
P 12,000
What was Tiger’s margin of safety?
a. P50,000
b. P150,000
c. P168,000
d. P182,000
24. Jargon Co. has 2 products that use the same manufacturing z facilities and cannot be
subcontracted. Each product has sufficient orders to utilize the entire manufacturing capacity.
For short-term profit maximization, Jargon should manufacture the product with the:
a. Lower total manufacturing costs for the manufacturing capacity.
b. Lower total variable manufacturing costs for the manufacturing capacity.
c. Greater gross profit per hour of manufacturing capacity.
d. Greater contribution margin per hour of manufacturing capacity.
25. The following information relates to Clyde Corporation, which produced and sold 50,000 units during
a recent accounting period.
Sales - P850,000
Manufacturing costs
Fixed - P210,000
Variable - P140,000
Selling & administrative costs
Fixed - P300,000
Variable - P45.000
Income tax rate 40%
For the next accounting period, if production and sales are expected to be 40,000 units, the company
should anticipate a contribution margin per unit of:
a. P0.55
b. P3.10
c. P9.10
d. P13.30
26. Major Company manufactures a single electronic product called Precisionmix. This unit is a batch
density monitoring device attached to large industrial mixing machines used in flour, rubber,
petroleum—and chemical manufacturing. Precisionmix sells for P900per unit. The following variable
costs are incurred to produce each Precisionmix device.
Direct labor - P180
Direct materials - P240
Factory overhead • P105
Total variable production costs - P525
Marketing costs - P75
Total variable costs - P600
Major's income tax rate is percent, and annual fixed-costs are P6,600,000. Except for an operating
loss incurred in the year of incorporation, the firm has been profitable over the last five years.
For Major Company to achieve an after-tax net income of P540,000, annual sales revenue must be:
a. P23,850,000
b. P22,500,000
c. P21,420,000
d. P7,500,000
27. Pillar, which began business at the start of the current year, had the following data:
Planned and actual production: 40,000 units
Sales 37,000 units at P15 per unit
Production costs:
Variable: P4 per unit
Fixed: P260,000
Selling and Administrative costs:
Variable: P1 per unit
Fixed: P32,000
The contribution margin that the company would disclose on an absorption costing income statement
is:
a. P0
b. P166,500
c. P147,000
d. 370,000
28.
Which of the following statements is true regarding fixed and variable costs?
a. Both costs are constant when considered on a total basis.
b. Variable costs are constant in total, and fixed costs are constant per unit
c. Both costs are constant when considered on a per unit basis.
d. Fixed costs are constant in total, and vanable costs are constant per unit.
29.
Theoretical capacity reduced by normal and anticipated work stoppage is called
a. practical capacity
b. normal capacity
c. ideal capacity.
d. excess capacity.
30.
Cost structure refers to the relative proportion of:
a. variable costs to contribution margin
b. total costs to sales.
c. fixed costs to variable costs
d. sales price per unit to variable costs per unit.
31.
One possible means of determining the difference between operating incomes for absorption
costing and variable cost is by:
a. subtracting sales of the previous period from sales of this period
b. subtracting fixed manufacturing overhead in beginning inventory from fixed
manufacturing overhead in ending Inventory
c. multiplying the number of units produced by the budgeted fixed manufacturing cost
rate
d. adding fixed manufacturing costs to the production- volume variance.
32.
Hilton Company has the following information for the current year:
Beginning fixed manufacturing overhead in inventory
P95,000
Fixed manufacturing overhead in production
375,000
Ending fixed manufacturing overhead inventory
25,000
Beginning variable manufacturing overhead inventory
P10,000
Variable manufacturing overhead in production
50,000
Ending variable manufacturing overhead inventory
15,000
What is the difference between operating incomes under absorption costing and variable costing?
a. P70,000
b. P50,000
c. P40,000
d. P 5,000
USE THE FOLLOWING FOR NUMBER 33 & 34.
Beach Corporation incurred fixed manufacturing costs of P6,000 during 2018. Other
information for 2018 includes:
The budgeted denominator level is 1,000 units.
Units produced total 750 units.
Units sold total 600 units.
Beginning inventory was zero.
The company uses variable costing and the fixed manufacturing cost rate is based on the
budgeted denominator level. Manufacturing cost variances are closed to cost of goods
sold.
33. Fixed manufacturing costs expensed on the income statement(excluding adjustments for variances)
total:
a. P6,000
b. P4,800
c. P3,600
d. P0
34. The production-volume variance totals:
a. P2,400
b. P2,000
c. P1,500
d. P0
35. Given a constant contribution margin per unit and constant fixed costs, the period-to-period change
in operating income under variable costing is driven solely by:
a. changes in the quantity of units actually sold
b. changes in the quantity of units produced
c. changes In ending inventory
d. changes in sales price per unit
36.
Why do many companies have switched from absorption costing to variable costing for internal
reporting:
a. to comply with external reporting requirements
b. to increase bonuses for managers
c. to reduce the undesirable incentive to build up inventories
d. in order to have the denominator level more accurate
37.
38.
39.
The higher the denominator level, the:
a. higher the budgeted fixed manufacturing cost rate
b. lower the amount of fixed manufacturing costs allocated to each unit produced
c. higher the favorable production-volume variance
d. more likely actual output will exceed the denominator level
Globe Corporation plans to expand by offering a sound system, the SS3000 that is superior and
unique. Globe believes that putting additional resources Into R&D and staying ahead of the
competition with technology innovations is critical to implementing its strategy.
Globe’s strategy is:
a. Product differentiation
b. Downsizing
c. Reengineering
d. cost leadership
Simon Corporation manufactures industrial-sized water coolers and uses budgeted machine-hours
to allocate variable manufacturing overhead. The following information pertains to the
company’s manufacturing overhead data:
Budgeted output units
Budgeted machine-hours
Budgeted variable manufacturing
overhead costs for I5,000 units
15,000 units
5,000 hours
P161,250
Actual output units produced
22,000 units
Actual machine-hours used
7,200 hours
Actual variable manufacturing
overhead costs
P242,000
What is the flexible-budget variance for manufacturing overhead?
a. P5,500 favorable
b. P5,500 unfavorable
c. P4,300 favorable
d. P4,300 unfavorable
40. Cedar Corporation manufactured 1,500 chairs during June. The following variable overhead data
pertain to June:
Budgeted variable OH cost per unit
P 12.00
Actual variable OH cost
P16,800
Flexible-budget amount for variable OH
P18,000
Variable OH efficiency variance
P360 unfavorable
What is the variable overhead spending variance?
a. P840 unfavorable
b. P1,200 favorable
c. P1,200 unfavorable
d. P1,560 favorable
41. Jenny’s Corporation manufactured 25,000 grooming kits for horses during March. The fixedoverhead cost-allocation rate is P20.00 per machine-hour. The following fixed overhead data pertain
to March:
Actual
Static Budget
Production units
25,000
24,000
Machine-hours
6,100
6,000
Fixed overhead costs for March
P1 23,000
P120.000
What is the fixed overhead production-volume variance?
a. P1,000 unfavorable
b. P2,000 favorable
c. P3,000 unfavorable
d. P5,000 favorable
42. A flexible budget:
a. is another name for management by exception
b. should be developed at the end of the period
c. is based on the budgeted level of output
d. provides favorable operating results
USE THE FOLLOWING FOR NUMBER 43 THROUGH 46.
Integrative Fabricators produces a single product. The company's accounting records are not in order. As
the company's controller, your job is to reconstruct the income statement for the quarter Just ended
(March 31, 2018) from the following information. The company adjusts the cost of goods sold for fixed
manufacturing overhead variances. On a per-unit basis, the variable costs have remained unchanged from
the previous quarter. In addition, this quarter's manufacturing overhead budget and planned production
were set to equal the prior quarter's budgeted amounts. The company did not have any work in process
inventories at the start and at the end of the quarter.
Sales, 12,000 units
Price per unit, P 14
Variable manufacturing cost per unit, P5
Variable selling and administrative cost per unit, P2
Fixed overhead volume variance, P 0
Fixed overhead budget variance, P 0
Finished goods inventory — Jan 1, 2018 5,000 units
Finished goods inventory Jan 1, 2018 P 40,000
Fixed selling and administrative expense. P 8,000
Contribution margin at break-even level of sales, P 42,000
43. How many units were produced during the quarter ending March 31, 2018’
a. 7,000
b. 12,000
c. 11,333
d. 16,000
44. Determine the value of the ending finished goods inventory, assuming that 14,000 units were
produced during the quarter.
a. P16,000
b. 24,000
c. P48,000
d. P50,000
45. Based on production units that you have computed in number 43, compute the amount of absorption
income for the quarter.
a. P40,000
b. P42,000
c. P48,000
d. P50,000
46. Compute the variable costing income for the quarter,
a. P40,000
b. P42,000
c. P48,000
d. P50,000
47. A proposal projects a 12% productivity increase. This is an example of a(n):
a. differential factor
b. opportunity cost.
c. nonfinancial quantitative factor.
d. incremental cost.
48. Which of the following represents the normal sequence in which the Indicated budgets are prepared?
a. Direct Materials, Cash, Sales
b. Production, Cash, Income Statement
c. Sales, Balance Sheet, Direct Labor
d. Production, Manufacturing Overhead, Sales
49.
The following data have been taken from the budget reports of Brandon Company, a merchandising
company.
Purchases
Sales
January
P160,000
Pl00,000
February
March
April
May
June
160,000
160,000
140,000
140,000
120,000
200,000
240,000
300,000
260,000
240,000
Forty percent of purchases are paid for in cash at the time of purchase, and 30% are paid for in each
of the next two months. Purchases for the previous November and December were P150,000 per
month. Employee wages are 10% of sales for the month in which the sales occur. Operating expenses
are 20% of the following month’s sales. (July sales are budgeted to be P220,000.) Interest payments
of P20,000 are paid quarterly in January and April Brandon's cash disbursements for the month of
April would be:
a. P140,000
b. P254,000
c. P200,000
d. P248,000
50. Flexible budgets:
a. Provide for external factors affecting company profitability.
b. Are used to evaluate capacity utilization.
c. Are budgets that project costs based on anticipated future improvements.
d. Accommodate changes in activity levels.
51. It is the process of varying key estimates to identify those estimates-that are the most critical to a
decision.
a. The graph method
b.
A sensitivity analysis
c. The degree of operating leverage
d. Sales mix
52. Leis Company's direct labor costs for the month of January 2018 were as follows:
Actual direct labor hours
20,000
Standard direct labor hours
21,000
Direct labor rate variance - unfavorableP3,000
Total payroll
P12,000
What was Leis' direct labor efficiency variance?
a. P6,000 favorable
b. P6,150 favorable
c. P6,300 favorable
d. P6,450 favorable
53.Which of the following best describes an OPPORTUNITY COST?
a. It is usually relevant but is not recorded the books
b. It is usually relevant and recorded in the books
c. It is usually irrelevant but is recorded in the books
d. It is usually irrelevant and is not recorded in the books
54.
Sonimad Sawmill manufactures two lumber products from a joint milling process. The two products
developed are mine support braces (MSS) and unseasoned commercial building lumber (CBL). A
standard production run incurs joint costs of P300,000 and results in 60,000 units of MSB and
90,000 units of CBL. Each MSB sells for P2 per unit, each CBL sells for P4 per unit. Assume the
commercial building lumber is not marketable at split-off point but must be further planed and sized
at a cost of P200,000 per production run. During this process, 10,000 units are unavoidably lost;
these spoiled units have no discernable value. The remaining units of commercial building lumber
are salable a P10.00 per unit. The mine support braces, although salable immediately at the split-off
point, are coated with a tar-like preservative that costs P100,000 per production run. The braces are
then sold for P5 each. If Sonimad Sawmill chose not to process the mine support braces beyond the
split-off point, the contribution from the joint milling process would be:
a. P50,000 higher.
b. P180,000 lower.
c. P100,000 higher.
d. P80,000 lower.
55.Ladder, Inc. manufactures a component in a router assembly. The selling price and unit cost data for
the component are as follows:
Selling price Pl 5
Direct materials cost 3
Direct labor cost 3
Vanable overhead .cost 3
Fixed manufacturing overhead cost 2
Fixed selling and administration cost 1
The company received a special one-time order for 1,000 components. Ladder has an alternative use of
production capacity for the 1,000 components that would produce a contribution margin of P5,000.
What amount is the lowest unit price that Ladder should accept for the component?
a. P9
b. P12
c. P14
d. P24
56. In its first year of operation, Magna Manufacturers had the following costs when it produced 100,000
and sold 80,000 units of its only product:
Manufacturing costs
Fixed P180,000
Variable 160,000
Selling and admin costs
Fixed 90,000
Variable 40,000
How much lower would Magna’s net income be if it used friable costing instead of full absorption
costing?
a. P36,000
b. P54,000
c. P68,000
d. P94,000
57.The following data were abstracted from Johnson Corporation for the year:
Sales
P1,800,000
Bond interest expense
60,000
Income taxes
300,000
Net Income
P400,000
How many times was bond interest earned?
a. 7.67
b. 11.67
c. 12.67
d. 13.67
58. Raul Corporation had a current ratio of 2.0 at the end of 2018. Current assets and current liabilities
increased by equal amounts during 2019. The effects on net working capital and on the current ratio,
respectively, were
a. no effect; increase
b. no effect; decrease
c. increase; increase
d. decrease; decrease
59. The Someday Corporation produces a variety of cleaning compounds and solutions for both industrial
and household use. While most of its products are processed independently, a few are related.
"Smart" is a coarse cleaning powder with many industrial uses. It costs P16 a pound to make and has a
selling price of P20 a pound.
A small portion of the annual production of this product is retained for further processing in the
Mixing Department where it is combined with several other ingredients to form a paste which is
marketed as a silver polish selling for P40 a jar. This further processing requires 1/4 pound of Sprit
3S7 per jar. Other ingredients, labor, and variable overhead associated with this further processing cost
P25 per jar. Variable selling costs amount to P3.00 per jar. If the decision were made to cease
production of the silver polish, PS4 000 of fixed Mixing Department costs could be avoided. Assume
that the demand for Smart is unlimited.
The minimum number of jars of silver polish that would have to be sold to justify further processing
of Sprit 3S7 is
a. 5,600 jars
b. 4,667 jars
c. 10,500 jars
d. 12,000 jars
60.
The indifference point is the level of volume at which company
a. earns the same profit under different operating scheme
b. earns no profit
c. earns its target profit
d. any of the above
NUMBER 61 & 62 ARE BASED ON THE FOLLOWING:
Blumax Company makes blankets that it markets through a variety of department stores.
It makes the blankets in batches of 1,000 units. Blumax made 20,000 blankets during the prior
accounting period. The cost of producing the blankets is summarized here.
Materials cost @P60
Labor cost @P30
Variable overhead @P15
Batch-level costs (20 batches at
batch)
P6,000
per
Product-level costs
Facility-level costs
Total costs
Cost per unit Pl,770,000 / 20,000
= P88.50
P 500,000
440,000
40,000
120,000
320,000
350,000
1,770,000
61. Laurel Company has offered to buy a batch of 600 blankets for P112 each. Blumax's normal selling
price is P125 per unit. Based on the preceding quantitative data, should Blumax accept the special
order?
a. No, because profit will decrease by Pl,000.
b. No, because profit will decrease by P9,000.
c. Yes, because profit will increase by P4,200.
d. Yes, because profit will increase by Pl,000.
62. What is the minimum number of units on this special order to make it barely acceptable?
a. 700
b. 857
c. 858
d. 900
63. Mine and Yours Company uses a regression equation to analyze the behavior of its transportation
costs (T) as function of travel time (H). They developed the following equation using two years'
observations with a related coefficient determination of 0.85:
T = P100,000 + P50H
If 500 hours of travel time were logged in one period, the related point estimated of total
transportation costs would be
a. P110,000
b. 121,250
c. 106,250
d. 125,000
64. The Variable Cost of Goods Sold in the Marin Company totals P325,000. Fixed selling and
administrative expenses totaled P115,000 and variable-selling and administrative expenses were
P210,000. If Marin Company's contribution margin totaled P590.000, then sales must have been
a. P1,125,000
b. P1,030,000
c. P650,000
d. P915,000
USE THE FOLLOWING FOR NUMBER 65 THROUGH 67
Super Men's Clothing s revenues and cost data for 2016 are:
Revenues
Cost of goods sold (40% of sales)
Gross margin
Operating costs:
Salaries fixed
Sales commissions (10% of sales)
Depreciation of equipment and fixtures
Store rent (P4,000 per month)
48,000
Other operating costs
50.000
Operating income (loss)
P500,000
200,000
P300.000
Pl 50,000
50,000
12,000
310.000
P( 10,000)
Mr. Super, the owner of the store, is unhappy with the operating results. An analysis of other operating
costs reveals that it includes P40,000 variable costs, which vary with sales volume, and P10.000 (fixed)
costs.
65. What is the contribution margin of Super Men's Clothing?
a. P300,000
b. P260,000
c. P210,000
d. P200,000
66. What is the contribution margin percentage?
a. 42%
b. 60%
c. 52%
d. 40%
67. Mr. Super estimates that he can increase revenues by 20% by incurring additional advertising costs
of P10, 000. As a result, how much would Super Men's Clothing operating income be?
a. P32,000
b. P22,000
c. P40,000
d. P50,000
68. A supply curve illustrates the relationship between
a. Price and quantity supplied
b. Price and consumer tastes
c. Price and quantity demanded
d. Supply and demand
69. A decrease in the price of a complementary good will
a. shift the demand curve of the joint commodity to the left
b. increase the price paid for a substitute good
c. shift the supply curve of the joint commodity to the right
d. shift the demand curve of the joint commodity to the right
70. In the long run, a firm may experience increasing returns due to
a. Law of diminishing returns
b. Opportunity costs
c. Comparative advantage
d. Economies of scale
-END OF EXAMINATION-
PRTC FIRST PREBOARD ANSWER KEY
1. B
2. B
3. C
4. C
5. C
6. A
7. C
8. B
9. A
10. C
11. C
12. B
13. A
14. B
15. C
16. C
17. C
18. A
19. B
20. A
21. D
22. C
23. A
24. D
25. D
26. B
27. A
28. D
29. A
30. C
31. B
32. A
33. A
34. D
35. A
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.
61.
62.
63.
64.
65.
66.
67.
68.
69.
70.
C
B
A
B
D
D
B
C
B
A
B
C
B
B
D
B
B
A
D
C
A
C
B
D
A
A
C
D
A
C
A
B
A
D
D