2:28 .Ill 59 Document (1) O . . . TOY STORE Inc. sells toy trucks. Information on estimated selling price and related costs are as follows: 2021 No. of toys sold 10,000 20,000 Selling price per unit P 50 P60 Flexible (Variable) Expenses 300,000 600,000 Capacity Related (Fixed) Expenses 100,000 300,000 2020 In 2020, Lotus Inc. expects annual real property taxes to decrease by P 10,000. 15. What is the operating income on 2020? a. P 100,000 b. P 120,000 2 C. P 130,000 d. P 200,000 e. None of the above 16. What is the break-even point in peso for 2020? a. P 200,000 b. P 250,000 c. P 300,000 d. P 350,000 e. none of the above 17. What is the breakeven point peso sales for 2021? a. P 550,000 b. P 600,000 C. P 650,000 d. P 750,000 e. none of the above 18. In 2021, how many units must be sold to achieve a profit of P200,000? a. 13,333 b. 16,667 c. 15,000 d. 20,000 e. none of the above 19. In 2021, what is the total flexible cost if sales are increased to P1,750,000? a. P 875,000 b. P 875,010 C. P 750,000 d. P1,000,000 e. none of the above 20 In 2020, what is the capacity related cost if sales are doubled to P1,000,000? a. P 100,000 b. P 200,000 c. P 300,000 d. none of the above 21. Given the information in 2020, how many units must be sold to earn a desired income of P150,000? a. 6,667 b. 8,333 c. 12,500 d. 10,000 e. none of the above 22. Performance evaluation measures in an organization a. affect the motivation of sub-unit managers to transact with one another. b. always promote goal congruence. c. are less motivating to managers than overall organization goals. d. Must be the same for all managers to eliminate sub-optimization. 23. Res23. _ Performance evaluation measures in an organization affect the motivation of sub-unit managers to transact with one another. always promote goal congruence. are less motivating to managers than overall organization goals. Must be the same for all managers to eliminate suboptimization. P-F'P'E\" _ Residual income is used as a performance measure in profit centers. cost centers. investment centers. revenue centers. P-F'P'P' 24. 25. 26. 2?. 29. 30. 31. 32. _ An increase in a corporation's target would result in an a. Increase in residual income. b. decrease in return on investment. c. decrease in residual income. d. decrease in both residual income and return on investment. _ All other things being equal, an increase in sales price would increase a Asset turnover. b Prot margin. c. Residual income. d All of the above. Cost center managers are evaluated on the profitability of their centers. how they control costs. how much they earn income. How much return on investments is achieved. P-F'P'E\" Its performance is measured by using the direct contribution margin approach to cost allocation or the determination of the center's contribution to the recovery of indirect cost of the company. a. cost center b profit center c. investment center d revenue center A company's return on investment is affected by a change in Asset turnover Prot maggin a. Yes yes b. Yes no c. no no d. no yes _ Return on investment is computed by dividing income by contribution margin. inventory turnover. assets invested. average assets employed. P-F'P'F' Residual income is determined as a. income tim es the asset turnover rate. b. income times the inventory turnover rate. c. income minus [asset base times target rate of return}. d. sales minus {asset base times target rate of return}. In evaluating the performance of a prot center manager, the manager and the subunit should be evaluated on the basis of the same costs and revenues. should only be evaluated on the basis of variable costs and revenues of the subunit. should be evaluated on all costs and revenues that are controllable by the manager. should be evaluated on all costs and revenues that can be directly traced to the sub unit. Fl-F'P'P' Everest Company budgeted manufacturing costs for 25,000 units are: Fixed manufacturing costs \"5,000 per month Variable manufacturing costs P 12.00 per unit The company produced 20,000 units during the month of June. How much is the exible budget in the total manufacturing costs for June? 2:30 .ill 1 59 Variable manufacturing costs P 12.00 per unit The company produced 20,000 units during the month of June. How much is the flexible budget in the total manufacturing costs for June? a. P 260,000 b. P 325,000 C. P 240,000 d. P 265,000 33. In Pricing Decisions, when prices are set up by the market due to strong competition a. target cost should be determined. b. target selling price should be set up first. c. target profit should be determined ahead of cost and selling prince. d. all of the above 34. Cost plus pricing involves establishing a cost base and a. a selling price. b. a mark-up. c. an ROI d. all of the above 35. _Total product cost is equivalent to a. manufacturing cost pricing b. manufacturing cost + ROI c. manufacturing cost and mark-up d. absorption cost pricing Gabrielle Corporation produces small wooden carriage. The following information is available for Gabrielle's anticipated annual volume of 5,000 units. Per Unit Total Direct Materials P 42 Direct Labor 34 Variable Manufacturing Overhead 42 Fixed Manufacturing Overhead P 200,000 Variable Selling and Administrative Expenses 34 Fixed Selling and Administrative Expenses P 720,000 The company has a desired ROI of 20 %. It has invested assets of P 750,000. 36. Give the total full cost per unit. a. 188 b. 198 c. 336 d. 366 e. none of the above, amount is . 37. Considering the target profit with ROI of 20% on investments of P750,000, what is the selling price per unit? a. 188 b. 198 c. 336 d. 366 e. none of the above, amount is 38. Using the markup percentage in cost-plus pricing to achieve the target ROI, what is the mark-up percentage based on total manufacturing cost? a. 101.3164 % b. 131.645 % c. 111.3164 % d. 141.645 % e. none of the above, percentage is 5