MAS 5. QUIZ 1 (AY22-23)-1 (Copy)
Lesson 1. Master Budget
1
The unit sales price is expected to be constant at P25.00. All sales are made on
credit. Receivables from customers are collected 50% in the quarter of sales, 40% in the
quarter following sales and 8% in the second quarter following sale. The remaining 2% is
considered uncollectible.
The accounts receivable balance on December 31, 20A is estimated to be P640,000.
30% of which is coming from the third quarter sales of 20A.
A. Projected Sales in Units for 1st Quarter 20B.
57100
2
B. Projected Sales in Peso 4th Quarter 20B.
2138850
3
Isla Company has the budgeted units sales of its products in 20B up to the first quarter of
20C as follows:
20B, Q1= 67,200
20B, Q2= 87,100
20B, Q3= 77,570
20B, Q4= 78,100
20C, Q1= 85,000
The company has a policy of maintaining finished goods inventory equals to 30% of the
next quarter's sales and materials inventory of 25% of the current quarter requirements.
It takes 2 lbs of material EX- 25 to produce one unit of product. The materials inventory at
the start of the year was recorded at 85, 000 pounds.
Material EX-25 costs 3 pesos per pound to purchase. The terms of the purchase is 2/30;
n/45. The company pays 60% of its purchases in the quarter of purchase and avail of
the 5% trade discount. The remaining balance is paid in the following quarter. The accounts
payables at December 31, 20A are recorded at P85,000.
A. Budgeted production in units for 2nd Quarter 20B.
84241
4
B. Budgeted raw materials to be used in units for 3rd Quarter 20B.
(3 Points)
155458
5
C. Budgeted Raw materials purchases in units 2nd quarter, 20B. (round off to whole number)
174018
6
D. Budgeted Raw materials purchases in peso for 3rd quarter, 20B. (round off to whole
number)
456606
7
E. Budgeted payments to merchandise suppliers for Q1, 20B. (round off to whole number)
252452
8
Lipana Corporation pays its production personnel at a rate of P30 per direct labor hour. It
takes .50 standard hours to complete a finished unit. The corporation pays its labor costs in
the month the payroll is recorded.
The standard variable overhead rate is P6 per direct labor hour and the standard fixed
overhead rate is P5 per direct labor hour. The company's normal capacity is 75,000 units or
37,500 direct labor hours.
Budgeted production per quarter follows:
Q1 75, 000
Q2 84, 000
Q3 77, 000
Q4 80,000
A. Budgeted labor Cost for Q4.
1200000
9
B. Budgeted factory overhead for Q1.
412500
10
Computer Zone operates a retail computer store in Sta. Mesa Manila. The results of its
operations for the year 200C is summarized below:
SALES:
Hardware
6,500,000.00
Software
2,520,000.00
Services
1,530,000.00
Costs and Expenses:
Cost of hardware sold
Cost of software sold
Selling expenses
Service costs
Administrative costs
3,870,000.00
1,530,000.00
650,000.00
750,000.00
1,620,000.00
The budget for 200D was based on the operating results in 200C and on the following
assumptions:
a. The selling price of hardware will increase by an average of 25% There will be no
change in the selling prices of software and services.
b. Unit sales are expected to increase as follows:
Hardware 10%
Software 5%
Service 8%
c. The costs of hardware and software are expected to increase by 5% while the cost of
service, which is purely fixed cost, will go up by 150,000.00
d. Selling costs will increase by 5%
e. Administrative costs will remain the same
A. The budgeted sales for 200D
11448400
11
B. The budgeted total costs and expenses for 200D
8872500
12
I. Budgets ensure goal congruence between superiors and subordinates.
II. Budgets define responsibility centers and promote communication and coordination
among organization segments.
False, False
13
I. Budget preparation is not the sole responsibility of any one organizational segment and is
prepared by combining the efforts of many individuals.
II. Budgeting provides a measuring device to which subsequent performances are compared
and evaluated.
False, True
14
I. A flexible budget is a series of budgets prepared for various levels of activity
II. ZBB is a budgetary process where the budget variance is always equal to zero.
True, False
15
I. A continuous budget assumes the continuous improvement of products and services.
II. A strategic budget is a short- range consideration related to liquidity.
True, False
MAS 5. QUIZ 2 (AY22-23)-1 (Copy)
CVP Analysis
1
I. For a given increase in peso sales, a high CM ratio will result in a greater increase in profits
than will a low CM ratio.
II. If product 1 has a higher unit contribution margin than product 2, then product 1 will
always have a higher CM ratio than product 2.
(2 Points)
True, True
True, False
False, False
False, True
2
Product Cute has sales of P250,000, a contribution margin of 25% , and a margin of safety of
P100,000. What is Cute fixed cost?
37500
3
Marami Na Corporation produces and sells three products and has provided the following
operating data: (See image attached)
Compute for the BEP in units for Product X.
2878
4
Belle Co. has fixed costs of P150,000 and breakeven sales of P1,000,000. What is its
projected profit at P1,800,000 sales?
120000
5
Le Vinia Corporation, which is subject to a 20% income tax rate had the following operating
data:
Selling price per unit 30
Variable cost per unit 11
Fixed costs
236,000
Management is contemplating to improve the quality of its products sold by
* replacing a component that costs 1.75 with a higher grade unit that costs 3.00
*acquiring a P382,500 packing machine to be depreciated over a 5- year life
The company wants to earn after tax income of P172,800
Identify the number of units the company must sell to earn the desired profit after the
improvement (round up your final answer)
14000
6
During 2021, Ironman Laboratory supplied hospitals with a comprehensive diagnostic kit for
P150. At a volume of 100,000 kits, Ironman had fixed costs of P1,250,000 and a profit
before income taxes of P250,000. Due to an adverse legal decision, Ironman’s 2022 liability
insurance increased by P1,500,000 over 2021. Assuming the volume and other costs are
unchanged, what should the 2022 price be if Ironman is to make the same P250,000 profit
before income taxes?
175
7
The following pertains to Relax Company:
Sales (75,000 units) 1,500,000
DM and DL
450,000
Overhead
Variable
60,000
Fixed
105,000
Selling and General Expenses
Variable
15,000
Fixed
90,000
What is Relax Company's Margin of Safety Ratio?
80%
8
Marami Na Corporation produces and sells three products and has provided the following
operating data: (See image attached)
Compute for the BEP in peso for Product Y.
3067105
9
GT Supply, Inc. is considering introducing a new product that will require a
P125,000 investment of capital. The necessary funds would be raised through a bank loan at
an interest rate of 16%. The fixed operating costs associated with the product would be
P61,250 while the contribution margin percentage would be 21%.
Assuming a selling price of P22.50 per unit, determine the sales (rounded to the nearest
whole peso), GT Supply would have to generate for earnings before interest and taxes
(EBIT) of 16% of the amount of capital invested in the new product.
81250
10
Marami Na Corporation produces and sells three products and has provided the following
operating data: (See image attached)
Identify the composite sales in peso if Marami na wanted a profit before tax of P3,000,000
(rounded to the nearest whole peso),
9612802
11
GT Supply, Inc. is considering introducing a new product that will require a
P125,000 investment of capital. The necessary funds would be raised through a bank loan at
an interest rate of 16%. The fixed operating costs associated with the product would be
P61,250 while the contribution margin percentage would be 21%.
Assuming a selling price of P22.50 per unit, determine the number of units (rounded to the
nearest whole unit), GT Supply would have to sell to generate earnings before interest and
taxes (EBIT) of 16% of the amount of capital invested in the new product.
386905
12
I. At break- even, profit equals zero
II. An increase in unit variable cost, reduces the break- even point
True, True
True, False
False, False
False, True
13
I. All other things remaining the same, equal pesos increases in both the selling price and
variable cost per unit will cause the break- even point in pesos to remain unchanged.
II. All other things remaining the same, equal peso increases in both the selling price and
variable cost per unit will cause the break- even point in sales pesos to remain unchanged.
True, True
True, False
False, False
False, True
14
Marami Na Corporation produces and sells three products and has provided the following
operating data: (See image attached)
Identify the composite sales in units if Marami na wanted a profit before tax of P3,000,000
(rounded to the nearest whole unit),
(3 Points)
11608
15
Tom Company sells products X, Y, and Z. Tom sells three units of X for each unit of Z, and
two units of Y for each unit of X. The contribution margins are P1.00 per unit of X, P2 per
unit of Y, and P3.00 per unit of Z. Fixed costs are $120,000.
How many units of X would Tom sell at the breakeven point?
(3 Points)
36000