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MAS PROBLEMS 2018.doc

# A 142 b 322 c 376 d 452 number 80 working capital

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A. 14.2% B. 32.2% C. 37.6% D. 45.2% Number 80 (WORKING CAPITAL MANAGEMENT & FS ANALYSIS) If a firm borrows P500,000 at 10% and is required to maintain P50,000 as a minimum compensating balance at the bank, what is the effective interest rate on the loan? A. 10.0% B. 11.1% C. 9.1% D. 12.2% Number 81 (DECENTRALIZATION & PERFORMANCE EVALUATION) Failure Corporation is a manufacturer of a versatile statistical calculator. The following information is a summary of defective and returned units for the previous year. Total defective units 1,000 Number of units reworked 750 Number of customer units returned 150 Profit for a good unit P40 Profit for a defective unit P25 Cost to rework a defective unit P10

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MANAGEMENT ADVISORY SERVICES Page 25 Cost of a returned unit P15 Total prevention cost P10,000 Total appraisal cost P5,000 The total quality cost is A . 15,000 B. 15,750 C. 28,500 D. 11,250 Numbers 82 and 83 (DECENTRALIZATION & PERFORMANCE EVALUATION) Computer Solutions Corporation manufactures and sells various high-tech office automation products. Two divisions of Computer Solutions Corporation are the Computer Chip Division and the Computer Division. The Computer Chip Division manufactures one product, a "super chip," that can be used by both the Computer Division and other external customers. The following information is available on this month's operations in the Computer Chip Division: Selling price per chip P50 Variable costs per chip P20 Fixed production costs P60,00 0 Fixed SG&A costs P90,00 0 Monthly capacity 10,00 0 chip s External sales 6,00 0 chip s Internal sales 0 chip s Presently, the Computer Division purchases no chips from the Computer Chips Division, but instead pays P45 to an external supplier for the 4,000 chips it needs each month. 82. Two possible transfer prices (for 4,000 units) are under consideration by the two divisions: P35 and P40. What would be the effect on corporate profit if P35 is selected as the transfer price rather than P40, and the Computer Division purchases from the Computer Chip Division instead of from the external supplier? A. 20,000 larger B. 100,000 larger C. 20,000 smaller D. the same
MANAGEMENT ADVISORY SERVICES Page 26 83. Assume, for this question only, that the Computer Chip Division is selling all that it can produce to external buyers for P50 per unit. How would overall corporate profits be affected if it sells 4,000 units to the Computer Division at P45? (Assume that the Computer Division can purchase the super chip from an outside supplier for P45.) A. no effect B. 40,000 largerP20,000 increase C. 20,000 decrease D. 90,000 increase Number 84 (DECENTRALIZATION & PERFORMANCE EVALUATION) The following information is given for the Alpha Division of Sorority Corporation. Sales Var. cost of goods sold 200,000 Fixed manufacturing costs 50,000 Variable selling 30,000 Fixed admin. (50% allocated) 20,000 Fixed selling (20% allocated) 50,000 Assets at cost 800,000 Accumulated depreciation 200,000 If Sorority Corporation uses ROI to evaluate division managers and uses historical cost as the investment base, the ROI for Alpha Division is: A. 31.25% B. 33.75% C. 41.67% D. 45.00% Number 85 (DECENTRALIZATION & PERFORMANCE EVALUATION) The following year-end data pertain to Adan Corporation: Earning before interest and taxes P 800,000

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• Summer '18
• Jane
• Integers, Chem, Jane Corporation

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