If the company will use the traditional full cost

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4. If the company will use the traditional full cost system, the cost per unit ofproduct X for the coming period will bea.P36.b.P50.c.P86.d.P68.
5. If the company will use the ABC system, the cost per unit of product X forthe coming year will be
6. The Activity-Based Costing System is one means of avoiding what has beencalledpeanut-butter costing.Inaccurately averaging or spreading costs likepeanut-butter over products or service units that use different amounts ofresources results in cross-subsidization of product costs.Cross-subsidization
CPARFirst Pre-board Examination-JULY 21 AND 24, 20217. Relative to traditional product costing, activity-based costing differs in theway costs are
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8.Which of the following statements about relevant or differential cost analysisis correct?a.All variable costs are relevant.b.All fixed costs are irrelevant.c.All variable and fixed costs to be incurred are considered as theychange with each decision alternative.d.All future costs are relevant.
ITEMS 9 and 10 ARE BASED ON THE FOLLOWING INFORMATION:Ramon Corporation, a manufacturer of light bulbs, budgeted sales of 500,000units of light bulbs at P100 per unit for the year 200A.Variablemanufacturing costs was budgeted at P40 per unit and fixed manufacturingcosts at P25 per unit.A special order offering to buy 50,000 units of light bulbs for P58 each wasreceived by Ramon Corporation in March 200A.Ramon Corp. has sufficientplant capacity to produce the additional units of light bulbs.However,overtime work has to be done at an additional cost of P8 per unit.No sellingexpenses would be incurred for this special order.9. Should Ramon Corporation accept the special order, assuming that it wouldnot affect regular sales?

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