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Answer: A
The amount of fixed costs in operating branches 10 warehouses is P400,000 (the fixed cost line intercepts
the vertical axis).
Total operating costs
P2,900,000
400,000
P2,500,000
P 250,000
Answer: A
Cost of units sold
(0.65 x P800,000)
Add Desired ending inventory
Total cost of goods available for sale
Deduct Beginning inventory
Budgeted purchases
P520,000
140,000
660,000
130,000
P530,000
Answer: A
Cost of goods sold
P750,000 x 0.6
P450,000
240,000
P690,000
P450,000 x 0.5
225,000
P465,000
Answer: D
Cost of sales
Add Desired ending inventory
Total available for sale
Deduct Budgeted purchases
Beginning inventory
P120,000
42,000
162,000
100,000
P 62,000
Answer: A
Total payments for purchases in June
P140,000
(P100,000 x 0.6)
P60,000
May
(P200,000 x 0.30)
120,000
P 20,000
P200,000
Answer: C
Budgeted sales, First Quarter
120,000 units
30% x 160,000
48,000 units
168,000 units
36,000 units
60,000
132,000 units
Answer: C
Sales for three-month period:
July
400,000
August
400,000 x 1.05
420,000
September
420,000 x 1.05
441,000
Total
Inventory, September 30
1,261,000
Total Requirements
1,631,440
300,000
Budgeted Production
.
370,440
1,331,440
Answer: C
Beginning Inventory
(8000 x 3.5)
Required Purchases
Direct Materials Used for Production
Desired Ending Inventory
28,000
8,000
(8000 x 3)
(24,000)
12,000
Answer: C
Budgeted production
Required materials per unit of product
Materials required
Unit cost
Peso amounts of materials used by
units produced
LL
MM
NN
622,000
622,000
622,000
0.50
1.00
1.2
311,000
622,000
746,400
P0.60
P1.70
P1.00
P186,600
P1,057,400
P746,400
730,000
108,000
Budgeted production
622,000
Answer: D
Required pounds by production
180,000
60,000
Budgeted purchases
90,000
Total
640,000
Answer: B
Materials required by June production 1,300 x 2
Add Ending raw materials inventory 1,600 x 2 x 0.5
Total materials required
Deduct Beginning materials inventory 1,300 x 2 x 0.5
Materials to be purchased
( 30,000)
210,000
2,600
1,600
4,200
1,300
2,900
Answer: D
Budgeted sales
18,000
11,400
Total
29,400
15,000
Budgeted production
14,400
(14,400 x 6 0.9)
24,400
Total
120,400
21,000
99,400
Answer: D
Raw materials required by June production:
Add: Ending materials inventory
Total materials required
Deduct Beginning material inventory
Budgeted materials purchase
1,200 x 2
1,300 x 2 . 1.5
2,400 x 1.5
2,400
3,900
6,300
3,600
2,700
Answer: A
Budgeted sales
300,000
10,000
Budgeted production
290,000
290,000 x 3
60,000 80,000
6,000
870,000
20,000
850,000
Answer: B
Materials required by production
500,000 x 2
(50,000 40,000)
Purchases
1,000,000
10,000
1,010,000
Answer: B
Materials required by 2nd Quarters production
112,500
25.000
137,500
112,500 x 0.25
28,125
109,375
Answer: D
Under flexible budget, analysis should be based on actual level achieved.
P1.80
P26,100
Answer: C
Cash sales (March)
0.2 x P420,000
P 84,000
235,200
February sales:
60,000
January sales:
9,600
P388,800
Answer: B
Total cash collections
Deductions collections on September sales
P57,000
(P80,000 x 0.6)
48,000
P 9,000
P30,000
Answer: D
Collections from:
January sales
(P860,000 x 0.2)
Answer: A
Collections sales of:
June:
May:
Total collections from sales
172,000
P987,000
P8,000 x 0.7
P7,000 x 0.3
P5,600
2,100
P7,700
Answer: B
October 90,000 x .95
P 85,500
85,000
59,500
299,000
815,000
P516,000
P230,000
Answer: D
Cash sales
P 70,000
(P340,000 x 0.60)
204,000
December
(P50,000 x 30/40)
37,500
November
Total cash receipts in January
.
20,000
P331,500
Answer: B
The balance of Accounts Receivable, based on the collection pattern for Liberal Sales Company, equals 40
percent of credit sales for that month:
P1,500,000 x 0.8 x 0.4 = P480,000
Answer: C
Gross receivable collected months sales
November
2,000,000 x .12
P 240,000
October
1,800,000 x .75
1,350,000
September
1,600,000 x .06
96,000
August
1,900,000 x .04
Total credit
.
76,000
P1,762,000
Answer: A
The balance of Accounts Receivable as of January 31, its first month of operations, will increase by P400,000
because the first collection on account sales will be in February.
However, a question of how much increase in Accounts Receivable in February will equal to the difference
between the February credit sales and 70% of January sales.
Answer: D
Cost of goods sold
P1,680,000
P1,610,000
150,000
P1,760,000
Answer: A
November costs
P1,248,000
October costs
320,000
Total disbursements
.
70,000
P1,568,000
Answer: C
Beginning Cash
P 20,000
(P300,000 x .8 x .98)
Total
235,200
283,200
P303,200
(P240,000 x .6 x .99)
(P200,000 x .4)
142,560
80,000
222,560
P80,640
Answer: C
January
February
Budgeted sales
11,900
11,400
14,820
15,600
Total
26,720
27,000
15,470
14,820
11,250
12,180
200
P2,250,000
200
P2,436,000
Budgeted inventories:
December 31
130% x 11,900
15,470
January 31
130% x 11,400
14,820
February 28
130% x 12,000
15,600
March 31
130% x 12,200
15,860
February purchases
54% x P2,436,000
P1,315,440
January purchases
46% x P2,250,000
1,035,000
Answer: D
Payments for:
P2,350,440
266,220
January:
237,130
P2,853,790
Answer: A
Billings of December 31:
Collections with 3% discount
P3,630,000 x 0.25
907,500
P3,540,000 x 0.09
318,600
P2,112,660
P3,338,760
Answer: B
Budgeted March sales
12,000
15,860
27,860
15,600
12,260
Answer: A
Payments for purchases in the month of:
December
P14,400
January
12,800
P27,200
Answer: C
Payments for purchases:
May purchase
P24,000
June purchase
17,600
Total
41,600
Labor costs
60,000
Fixed Overhead
30,000
Interest payments
45,000
30,600
Total disbursements
.
P207,200
Answer: C
June cash sales (P390,000 x 0.1)
P 39,000
245,700
May sales
113,400
P398,100
Answer: B
Marketable securities purchased on:
June
P 5,600
July
126,900
Cumulative purchase of MS
.
P132,500
Answer: A
Cash Budget (P000)
June
July
Aug
Sept
P398.1
P404.9
P382.2
P374.9
367.5
278.0
296.5
702.5
30.6
126.9
85.7
( 327.6)
25.0
50.0
50.0
50.0
Cash receipts
Cash disbursements
55.6
176.9
135.7
( 277.6)
5.6
- 126.9
- 85.7
218.2
0.0
0.0
109.4
Cash loan
0.0
P 50.0
P 50.0
P 50.0
P 50.0
June
July
Aug
Sept
P351.0
P315.0
P378.0
P369.0
Cash sales
P 39.0
P 35.0
P 42.0
P 41.0
245.7
105.3
94.5
113.4
264.6
245.7
220.5
P398.1
P404.9
P382.2
P374.9
June
July
Aug
Sept
Purchases
P210.0
P240.0
P320.0
P230.0
P 99.0
P 94.5
P108.0
P144.0
110.0
121.0
115.5
132.0
209.0
215.5
223.5
276.0
Labor
58.5
52.5
63.0
61.5
General overhead
10.0
10.0
10.0
10.0
Interest
35.0
Cash dividend
25.0
Taxes
30.0
Collection of accounts
Total
113.4
Purchase of equipt.
35.0
30.0
290.0
Total payments
.
P367.5
P278.0
P296.5
P702.5
Answer: A
Budgeted Production
January
February
March
Total
Sales
1,700,000
1,200,000
1,400,000
4,300,000
Inventory, end
2,600,000
3,400,000
4,500,000
4,500,000
Total
4,300,000
4,600,000
5,900,000
8,800,000
Inventory, beg.
(2,900,000
(2,600,000
(3,400,000 (2,900,000
Budgeted production
1,400,000
2,000,000
2,500,000
5,900,000
Answer: B
Payments for Purchases:
January
February
84,000
March
120,000
P 93,600
P297,600
Answer: B
Budgeted Collections on Accounts Receivable
January
November sales
87,500
December sales
116,250
January sales
February
116,250
131,750
Answer: C
203,750
Total
87,500
February sales
Total
March
248,000
232,500
131,750
263,500
93,000
93,000
224,750
676,500
A months sales is collected 50 percent each in the first and second month. Therefore, the accounts receivable
outstanding as of March 31 includes Marchs sales as well as 50 percent of February sales.
Februarys accounts (P186,000 x 0.5)
P 93,000
Marchs sales
217,000
P310,000
Answer: A
Current unit cost per 1,000
Material
P 52
Labor
20
Overhead
10
Total
P 82
Effective January 1, 2007, the price of materials will be raised to P60. The unit cost for 2007 production will be
P90. Since the sales of January and February come from December production, only the March sales will have
cost of P90 per thousand.
P237,800
1,400 x P90
126,000
March
Cost of goods sold (first quarter)
.
P363,800
Answer: A
January
February
March
203,750
248,000
224,750
93,600
84,000
120,000
Labor expenses
28,000
40,000
50,000
Overhead
14,000
20,000
25,000
52,700
37,200
43,400
Cash collections
Cash disbursements
Interest
8,000
Taxes
64,560
Dividends
48,420
Total disbursements
188,300
181,200
359,380
15,450
66,800
(134,630)
30,000
25,000
25,000
45,450
91,800
(109,630)
Marketable securities
20,450
66,800
( 87,250)
Cumulative MS
20,450
87,250
47,380
25,000
112,250
25,000
Borrowings
Cash Balance, End
.
Answer: C
Proforma Income Statement
January
February
March
Total
Sales
263,500
186,000
217,000
666,500
139,400
98,400
126,000
363,800
Gross profit
124,100
87,600
91,000
302,700
52,700
37,200
43,400
133,300
Operating income
71,400
50,400
47,600
169,400
Interest expense
2,667
2,667
2,666
8,000
68,733
47,733
44,934
161,400
27,493
19,093
17,974
64,560
Net income
41,240
28,640
26,960
96,840
Answer: A
August sales
Billed 8/20
P350,000 x 18%
P 63,000
Billed 9/10
274,400
P337,400
Answer: B
Russon provides 25 percent of next months quantity sales.
25% x P400,000 x 80% = P80,000
Answer: D
May sales billed June 10 250,000x18%
P 45,000
June Sales:
Billed June 20
Billed July 10
300,000 x 18%
54,000
235,200
P274,400
July sales
Billed July 20
July Collections
P608,600