1. Skousen buys tennis balls at P 25 per dozen from its wholesaler. Skousen will sell 35,000 dozens of tennis balls evenly throughout the year. Skousen desires a 12% percent return on investment (cost of capital) on its inventory investment. In addition, rent, insurance and related taxes for each dozen tennis balls in inventory amounts to P 0.50. The cost per order is P 8. Skousen uses a 350-day year.

How often shall Skousen place the orders within a year?

Group of answer choices

a. Every 5 days

b. Every week

c. Every 6 days

d. Every 4 days

2. Ebi Company began business at the start of the current year. The company planned to produce 25,000 units, and actual production conformed to expectations. Sales totaled 22,000 units at P 30 each. Costs incurred were:

Fixed manufacturing overhead	P 150,000
Fixed selling and administrative cost	100,000
Variable manufacturing cost per unit	8
Variable selling and administrative cost per unit	2

If there were no variances, how much was the company's absorption costing income?

Group of answer choices

a. P 208,000

b. P 190,000

c. P 220,000

d. P 202,000

3. Snacku Company sells optical equipment, orders 5,200 lens per year, 100 lens per week at P 20 per lens. Snacku Company earns 30% on its cash investments. The purchase-order lead time is 2.5 weeks. Snacku Company sells 125 lens per week. The following data is available:

Ordering costs per purchase order	P 21.25
Insurance, materials handling, breakage, per year	P 2.50

What is the economic-order quantity (rounded to nearest whole lens)?

Group of answer choices

a. 210 lens

b. 297 lens

c. 325 lens

d. 161 lens

4. La Lisa uses FIFO for inventory costing:

Beginning Inventory	300 units
Units Produced	600
Units Sold	600
Prior year Budgeted Fixed Overhead Rate	P 50/unit
Current year Budgeted Fixed Overhead Rate	P 44/unit

Which of the following statements is true about the difference between absorption-costing and variable-costing operating income?

Group of answer choices

a. Absorption-costing is P 15,000 more than variable-costing operating income.

b. Absorption-costing is P 15,000 less than variable-costing operating income.

c. Absorption-costing is P 1,800 more than variable-costing operating income.

d. Absorption-costing is P 1,800 less than variable-costing operating income.

5. Kikkoman Corporation operates two stores: A1 and B2. The following information relates to store B2:

Sales revenue	P 100,000
Variable operating expenses	45,000
Fixed expenses:
Traceable to B2 and controllable by B2	17,500
Traceable to B2 and controllable by others	12,500

If the common costs of P 10,000 are divided equally between the two stores, Store B2's segment margin is:

Group of answer choices

a. P 55,000

b. P 20,000

c. P 42,500

d. P 25,000

6. Ningning Company makes a white liquid substance that is used to cover errors made on printed documents. Ningning expects to use 4 ounces of a chemical known as Fatal per bottle of correction fluid. Fatal expected to cost P 0.40 per ounce. Actual materials cost amounted to P 0.46 per ounce. Ningning expected to make and sell 1,000,000 bottles of correction fluid during the period. Actual production amounted to 900,000 bottles and 4,095,000 ounces.

The materials usage variance for Fatal is:

Group of answer choices

a. P 245,700 favorable

b. P 198,000 unfavorable

c. P 198,000 favorable

d. P 245,700 unfavorable

7. Chips, Inc. has developed a new production process to manufacture its product. The new process is complex and requires a high degree of technical skill. However, management believes there is a good opportunity for the employees to improve as they become more familiar with the production process. The production of the first unit requires 100 direct labor hours. If a 70% learning curve is used, using the cumulative average time model, the cumulative direct labor hours required to produce a total eight units would be:

Group of answer choices

a. 560 hours

b. 392 hours

c. 274 hours

d. 196 hours

8. The following information regarding a capital project was given for consideration:

Estimated life	10 years
Cost of capital	20%
Initial investment	P 6,500
Cash inflows per year	P 1,000
Straight-line depreciation	P 325

What is the unadjusted accounting rate of return (ARR) of the capital project?

Group of answer choices

a. 20.77%

b. 30.77%

c. 15.38%

d. Cannot be determined from the given information

9. Skousen buys tennis balls at P 25 per dozen from its wholesaler. Skousen will sell 35,000 dozens of tennis balls evenly throughout the year. Skousen desires a 12% percent return on investment (cost of capital) on its inventory investment. In addition, rent, insurance and related taxes for each dozen tennis balls in inventory amounts to P 0.50. The cost per order is P 8. Skousen uses a 350-day year.

What is the average number of tennis balls does Skousen maintain?

Group of answer choices

a. 4,800 tennis balls

b. 200 tennis balls

c. 2,400 tennis balls

d. 400 tennis balls

10. Jisoo Company uses a standard costing system. At a normal level of activity of 15,000 units and 45,000 standard direct labor hours, the standard direct labor cost would be P 270,000. During June, 42,800 hours were worked to produce 14,000 units at an actual direct labor cost of P 352,000. The direct labor efficiency variance in June was:

Group of answer choices

a. P 4,800 F

b. P 12,800 U

c. P 4,800 U

d. P 7,800 U