MULTIPLE CHOICE THEORY

1. D
2. C
3. C
4. B
5. B
6. B
7. D
8. C
9. A
10. D
11. D
12. B
13. Di ko mahanap
14. C

PROBLEM SOLVING

1. B.

Differential (incremental) cost is the difference in total cost between two decisions. The
relevant costs do not include unavoidable costs, such as the $3 of fixed overhead.

Cost to purchase (12,000 × 37) 444,000

Minus rental income (40,000)
Net cost to purchase 404,000
Cost to manufacture [12,000 × (35 - 3)] (384,000)
Cost differential 20,000

2. Food 100,000
Labor 75,000
VOH (110,000x60%) 66,000
TOTAL 241,000

3. D.
60,000/30,000 = 2 per unit (FOH)
FOH 36 per unit - (8 per unit – 2 per unit) = 30 per unit
(33 per unit)
LOSS (3 per unit)

4. D
30,000 X 3 = 90,000 loss
100,000
190,000
5. DI KO MAHANAP

6. DI KO MAHANAP PERO FEELING KO 50

7. C.

($160 - 22* -15 - 12 - 3) x 10,000 units = $1,080,000

* Because direct material increase 10% = 20 x 110% = 22

8. A.
DM 20
DL 15
VOH 12
S&H 3
OC (10,000/1,000) 10
60

9. DI KO MAHANAP

10. A.
7,000 X 1.85 = 12,950
(7,000)
5,950