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1. St. Jude Manufacturing has assembled the data appearing below pertaining to two popular products. Past experience has shown that the fixed manufacturing overhead component included in the cost per machine hour averages P10. St. Jude has a policy of lling all sales orders, even if it means purchasing units from outside suppliers. Juicer Slicer Direct materials P 6 P11 Direct labor 4 9 Factory overhead at P16 per hour 16 32 Cost if purchased from an outside supplier 20 38 Annual demand (units) 20,000 28,000 If 50,000 machine hours are available, and St. Jude Manufacturing desires to follow an optimal strategy, it should a. Produce 25,000 Slicers and purchase all other units as needed. b. Produce 20,000 Juicers and 15,000 Slicers and purchase all other units as needed. 0. Produce 20,000 Juicers and purchase all other units as needed. d. Purchase all units as needed. 2. St. Christopher's Motors, Inc. is considering a new product for the coming year, an electric motor which it can purchase 'om a reliable vendor for P2100 per unit. The alternative is to manufacture the motor internally. St. Christopher's Motors, Inc. has excess capacity to manufacture the 30,000 motors needed in the coming year except for manufacturing space and special machinery. The machinery can be leased for P45,000 annually. Finished goods warehouse space adjoining the main manufacturing facility, leased for P39,000 annually, may be converted and used to manufacture the motors. Additional off-site space can be leased at an annual cost of P54,000 to replace the nished goods warehouse. The estimated unit costs for manufacturing the motors internally, exclusive of the leasing costs itemized above, are: Direct material P 8.00 Direct labor 4.00 Variable manufacturing overhead 3.00 Allocated xed manufacturing overhead 5.00 Total manufacturing cost per unit P20.00 A cost-benet analysis would show that St. Christopher's Motors, Inc. would save a. P54,000 by purchasing the motors from the outside vendor. b. P69,000 by purchasing the motors from the outside vendor. c. P81,000 by making the motors internally. d. P96,000 by making the motors internally. 3. Given the following information about St. Vincent, compute for its economic value added: Earnings before interest and taxes P20,000 Tax rate 40% Interest-bearing liabilities P50,000 Cost of equity capital 14% Debt to equity 1:1 Additional information: 0 St. Vincent pays 10% annual interest to its creditors. 0 There are no current liabilities held signicant by St. Vincent. a. P 8,000.00 b. P 2,000.00 c. P 5600.00 d. P 0 4. The following data have been extracted from the budget working papers of WR Limited: Activity Overhead cost (In machine hours) (In pesos) 1 | P a g e 10.\" 13.463 12.!!!) 14.162 18!!!) 15.549 18.\" 16.242 In March 2002, the actual activity was 13,780 machine hours and the actual overhead cost incurred was P14,521, The total overhead expenditure variance is nearest to a. P1,750 (F) b. P250 07) 0. P250 (A) d. P4,520 (A) 5. In the context of budget preparation the term \"goal congruence\" is... aThe alignment of budgets with objectives using feed-forward control b The setting of a budget which does not include budget bias c The alignment of corporate objectives with the personal objectives of a manager d The use of aspiration levels to set efficiency targets. 6. MNP plc produces three products from a single raw material that is limited in supply. Product details for period 6 are as follows: W Maximum demand 1,000 2,400 2,800 Optimum planned production 720 - 2,800 Unit Contribution (Pesos) 4.50 4.80 2.95 Raw materials cost per unit 1.25 1.50 0.75 (90.50 per kg) The planned production optimizes the use of the 6,000 kgs of raw material that is available om MNP plc's normal supplier at the price of P050 per kg. However, a new supplier has been found that is prepared to supply a further 1,000 kgs of the material. What is the maximum price that MNP plc should be prepared to pay for the additional 1,000 kgs of the material? Ia. P2,100 b. P2,240c. P2,300 d. P2,465 7. T-plc has developed a new product, the TF8. The time taken to produce the rst unit was 18 minutes. Assuming that an 80% learning curve applies, the time allowed for the h unit (to 2 decimal places) should be a. 579 minutes b. 7-53 minutes c. 10-72 minutes d.11'52 minutes Note: For an 80% learning curve y = ax -0-3219 Use the following to answer questions 8-9: Jebb's Lettuce Stand currently sells 60,000 heads of lettuce each year for P100 per head. Jebb is thinking of expanding operations and serving the customer better by purchasing a \"slice and dice\" machine that will cut up each head of lettuce into bite-size pieces that can be used for salads. Jebb expects he will then be able to sell his lettuce for Pl.70 per head. Jebb has prepared the following analysis for each option based on sales of 60,000 heads of lettuce: Selling Unsliced Lettuce.- Per Head Total Variable costs ................................ P025 P15,000 Fixed costs ..................................... 0.30 18,000 Total .............................................. P055 P33,000 Selling Sliced Lettuce: Per Head Total Variable costs ................................ P030 P18,000 Fixed costs ..................................... 0.90 54,000 Total .............................................. P1.20 P72,000 8. Based on the information above, what will be Jebb's increase or decrease in prot for the year if he chooses to start slicing up the lettuce instead of selling it whole? a, P3,000 increase b. P3,000 decrease c. P 12,000 decrease d. P30,000 increase 9. Assume that .T ebb is currently selling only 50,000 heads of lettuce per year instead of 60,000. Under this scenario, what will be Jebb's increase or decrease in prot for the year if he chooses to start slicing up the lettuce instead of selling it whole? a. P2,000 increase b. P2,500 decrease c. P3,000 increase 2 | P a g e d. P3,500 decrease
