MAS Compilation of Questions_Problems - MANAGEMENT ADVISORY...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
MANAGEMENT ADVISORY SERVICES QUESTIONS & ANSWERS COMPILED BY: MA. CRISTINA P. OBESO, CPA 1. The following pertains to Sure Company: Sales (50,000 units) P1,000,000 Direct Materials and Direct Labor 300,000 Factory Overhead Variable 40,000 Fixed 70,000 Selling and General Expenses Variable 10,000 Fixed 60,000 How much was Sure's break-even point in number of units? a. 9,848 b. 10,000 c. 18,571 d. 15,700 2. Michael Company began its operations on Jan. 1,2008 and produces a single product that sells for P10/unit. Michael uses the actual (historical) cost system. In 2008, 100,000 units were produced and 80,000 units were sold. There was no work-in-process inventory at Dec. 31, 2008. Manufacturing costs and selling and administrative expenses for 2008 were as follows: Fixed costs Variable costs Raw materials 2.00/unit produced Direct labor 1.25/unit produced Factory overhead 120,000 0.75/unit produced Selling and administrative 70,000 1.00/unit produced What would be Michael's finished goods inventory at Dec. 31, 2008 under absorption costing method? 3. Hope Company manufactures Part P for use in its production cycle. The cost per unit for 10,000 units of part P are as follows: Direct materials 3 Direct labor 15 Variable overhead 6 Fixed overhead 8 32 Hope can buy 10,000 units of Part P at P30 per unit. If Hope buys Part P. the released facilities could be used to save P45,000 in relevant costs in the manufacture of Part T. In addition, P5/unit of the fixed overhead applied to Part P would be totally eliminated. What alternative is more desirable and by what amount is it more desirable?
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern