39.Aldorp had a P10,000 unfavorable fixed overhead budget variance, a

P6,000 unfavorable variable overhead spending variance, and a P2,000

favorable volume variance. The total overhead was

A. P14,000 overapplied C. P18,000 overapplied

B. P14,000 underapplied D. P18,000 underapplied

40.Fidelity Company uses a flexible budget system and prepared the

following information for the year: Fidelity operated at 80 percent of

capacity during the year, but applied factory overhead based on the 90

percent capacity level. Assuming that actual factory overhead was

equal to the budgeted amount of overhead, how much was the

overhead volume variance for the year?

Percent of Capacity 80 Percent 90 Percent

Direct labor hours 24,000 27,000

Variable factory overhead P54,000 P60,750

Fixed factory overhead P81,000 P81,000

Total factory overhead rate pre DLH P5.625 P5.25

A. P9,000 U C. P9,000 F

B. P15,750 U D. P15,750 F

55.At its present level of operations, a small manufacturing firm has total

variable costs equal to 75% of sales and total fixed costs equal to 15%

of sales. Based on variable costing, if sales change by P1.00, income

will change by

A. P0.25 C. P0.75

B. P0.12 D. P0.10

57.If revenues are P210,000 under alternative A and P216,000 under

alternative B, and costs are P190,000 for A and P204,000 for B, then

using the basic approach in incremental analysis, incremental

revenues, costs, and net income, in comparing B to A are respectively

A. P6,000, P(14,000), P(8,000) C. P6,000, P14,000, P8,00

B. P(6,000), P14,000, P8,000 D. P(6,000), P(14,000), P(8,000)

58.For the year ended April 30, 2003, Leba Company incurred direct costs

of P800,000 based on a particular course of action. Had a different

course of action been taken, direct costs would have been P650,000.

In addition, Leba's fixed costs during the fiscal year were P110,000.

The incremental (decremental) costs was:

A. P40,000 C. P(40,000)

B. P150,000 D. P(150,000)

59. Wallace Company produces 15,000 pounds of Product A and 30,000 pound of

Product B each week by incurring a common variable costs of P400,000. These

two products can be sold as is or processed further. Further processing of either

product does not delay the production of subsequent batches of the joint product.

Data gathering there two products are as follows: Product A Product B

Selling price per pound without further Processing P 12.00 P 9.00

Selling price per pound with further Processing P15.00 P 11.00

Total separate weekly variable costs of Further processing P50,000 P45,000

To maximize Wallace Company's manufacturing contribution margin,

the total separate variable costs of further processing that should be

incurred each week are

A. P45,000 C. P95,000

B. P50,000 D. P0

60.Blue & Company sells a product for P20 with variable cost of P8 per

unit. Blue could accept a special order for 1,000 units at P14. If Blue

accepted the order, how many units could it lose at the regular price

before the decision become unwise?

A. 1,000 units C. P500 units

B. P200 units D. 0 units

61.Geary Manufacturing has assembled the following data pertaining to

two popular products.

Blender Electric mixer

Direct materials P 6 P 11

Direct labor 4 9

Factory overhead @ P16 per hour 16 32

Cost if purchased from an

outside supplier 20 38

Annual demand (units) 20,000 28,000

Past experience has shown that the fixed manufacturing overhead

component included in the cost per machine hour averages P10.

Geary has a policy of filling all sales orders, even if it means

purchasing units from outside suppliers.

If 50,000 machine hours are available, and Geary Manufacturing

desires to follow an optimal strategy, it should

A. produce 25,000 electric mixers, and purchase all other units as

needed

B. produce 20,000 blenders and 15,000 electric mixers, and purchase

all other units as needed

C. produce 20,000 blenders and purchase all other units as needed

D. purchase all units as needed

62.The Hingis Corporation manufactures two products: X and Y.

Contribution margin per unit is determined as follows:

Product X Product Y

Revenue P 130 P80

Variable costs 70 38

Contribution margin P 60 P42

Total demand for X is 16,000 units and for Y is 8,000 units. Machine

hours is a scarce resource. 42,000 machine hours are available during

the year. Product X requires 6 machine hours per unit while product Y

requires 3 machine hours per unit.

How many units of X and Y should Hingis Corporation produce?

A. B. C. D.

Product X 16,000 8,000 7,000 3,000

Product Y - 0 - 4,000 - 0 - 8,000