BA 116 FINAL EXAMINATION: Answer Key

1. 101299
Production Budget
budgeted sales
beginning
ending
units to be produced

March
11,800
15,730

April
12,100
15,730
15,470
11,840

May
11,900
15,470
14,820
11,250

June
11,400
14,820
15,600
12,180

July
12,000
15,600
15,860
12,260

August
12,200

Collection of Accounts receivables

March
March

April

354,00
0

363,00
0

May

357,00
0

June

342,00
0

60%
25%
9%

(w/n discount period)

(end of the month)
(end of the 2nd month)

60%
25%
9%

(w/n discount period)

(end of the month)
(end of the 2nd month)

60%
25%
9%

(w/n discount period

(end of the month)
(end of the 2nd month)

25%

(end of the month)

April

May

June

July

206,028
88,500
31,860
211,266
90,750
32,670
207,774
89,250

85,500
333,876

329,694

Payment of Accounts payable

April

May

June

236,80
0

225,00
0

243,60
0

54%
46%

during the month

following month

54%
46%

during the month

following month

54%
46%

during the month

following month

127,872
108,928
121,500
103,500
131,544
112,056
230,428

235,044

Selling and Administrative expenses

April
363000

54,450
-2,000
52,450

54%
46%

during the month

following month

May
357000

53,550
-2,000
51,550

54%
46%

during the month

following month

June

51,300

54%

during the month

reahdelmontegordo

24,127

27,837
23,713

26,622

Page 1 of 16

342000

-2,000
49,300

46%

following month

22,678
51,964

50,335

CASH BUDGET
May

June

Cash receipts
Collection of Accounts receivables

April

333,876

329,694

Cash Disbursements
Payment of Accounts payable due to purchases
Payment of Selling and Admin, expenses
Total Cash disbursement

230,428
51,964
282,392

235,044
50,335
285,379

Net Cash flows

Beginning Cash Balance

51,484
5,500

44,315
56,984

56,984

101,299

Ending Cash Balance

5,500

2. 858600
Collection of Accounts Receivables

May

700,000

350,000

350,000

June

800,000

400,000

400,000

July

900,000

450,000

450,000

August

900,000

450,000

450,000

80%
18%

May
274,400

June

July

Aug

Sept

Oct

63,000

80%
18%

274,400

80%
18%

313,600

63,000

72,000

80%
18%

320,000

80%
18%

352,800

72,000

81,000

80%
18%

352,800

80%
18%

352,800

81,000

81,000

80%
18%

352,800
81,000
651,000

807,800

858,600

514,800

June

July

Aug

Sept

3. 433800
May
July

900,000

450,00
0

reahdelmontegordo

80%
18%

352,800
81,000

Page 2 of 16

450,00
0

80%
18%

352,800
81,000
352,800

433,800

81,000

4. 660000 or 690000
Production Budget
May
700,00
0
560,00
0

sales
80%
beginning

160,00
0

end
units to be produced

June

July

August

September

800,000

900,000

900,000

600,000

640,000
160,000

720,000
180,000

720,000
180,000

480,000
120,000

180,000

180,000

120,000

660,000

720,000

660,000

Payment of Merchandise purchases

June

July

August

660,000

720,000

660,000

50%
50%

June
330,000

July

Aug

Sept

330,000

50%
50%

360,000
360,000

50%
50%

330,000
330,000
690,000

5. 3845
MATERIALS VARIANCES
Actual
Standard

5,405
5,280

125

unfavorable

Breakdown:
Material price variance
(AP-SP)AH

(1.15-1.1)4,700

235

unfavorable

Material quantity variance

(AH-SH)SR

(4,700-4,800)1.1

-110

favorable

870

unfavorable

LABOR VARIANCES
18,87
0
18,00
0

Actual
Standard
Breakdown:
Labor rate variance
(AR-SR)AH

(2.55-2.5)7,400

370

unfavorable

Labor efficiency variance

(AH-SH)SR

(7,400-7,200)2.5

500

unfavorable

OVERHEAD VARIANCES (4-way)

reahdelmontegordo

Page 3 of 16

FOH spending variance

AFOH
BFOH

26,40
0
26,52
0

-120

favorable

25,23
4
25,90
0

-666

favorable

700

unfavorable

2,040

unfavorable

VOH spending variance

AVOH
AHSVOR
Variable efficiency variance
BAAH

26,520
25,900

BASH

52,42
0

26,520
25,200

51,72
0

Volume variance
51,72
0

BASH
SHSR

24,480
25,200

49,68
0

Sum of unfavorable variances

3,845

6. 8000
Sales
Cost of Goods Sold
Total Manufacturing Cost
Direct
Materials
Beginning
65,000
Purchases
360,000
Ending
50,000
Direct Labor
Overhead
Cost of Goods Manufactured
Beginning FG
Ending FG

940,000

375,000
140,000
280,000
795,000
130,000
120,000

Selling and General Expenses

Income before tax
Income Tax (40%)

805,000
135,000
115,000
20,000
12,000

Net Income

8,000

7. 388.5 favorable
Materials Mix Variance
Actual Input at Standard price
Echol
26,600
0.2
Protex
12,880
0.425

reahdelmontegordo

5,320
5,474

Page 4 of 16

Benz
CT 140

37,800
7,140

Actual Input x ASIC

0.15
0.3

5,670
2,142
18,606
18,994.5

(84,420x0.225)*

-388.5
*ASIC
Echol
Protex
Benz
CT 140

200
100
250
50
600

ASIC

40
42.5
37.5
15
135
135/600

*Actual Input
Echol
26,600
Protex
12,880
Benz
37,800
CT 140
7,140

Favorable

0.225

84,420

8. 94.5 unfavorable
Materials Yield Variance
Actual Input x ASIC
(84,4200 x 0.225)
Actual Output x ASOC (70,000 x 0.27)**

18994.5
18900
94.5

**ASOC
Echol
Protex
Benz
CT 140
ASOC

40
42.5
37.5
15
135

500
135/500

**Actual output
140 batches x 500-L batch

Unfavorable

0.27

70,000

9. 14000
Using weighted average,
(since we are dealing with actual returns)
Returns in process, Mar 1
Returns worked on in March
Total returns in process

200
825
1,025

Returns completed
Returns in process, Mar 31
Total returns processed

900
125
1,025

Total actual cost

Returns in Process, Mar 1
Current cost

reahdelmontegordo

EUP
900
100
1,000

3,000
3,000
89,00

Page 5 of 16

0
45,00
0
Total cost to account for
Divided by EUP
Cost per unit of return

140,000
1,000
140

Returns in process, Mar 31 (140 x 100)

14,000

10. 16000 favorable

Using FIFO method,
Returns in process, Mar 1
Returns worked on in March
Total returns in process

200
825
1,025

Returns in process, Mar 1

Return started and completed
Returns completed
Retuns in process, Mar 31
Total returns processed

200
700
900
125
1,025

Labor efficiency variance

(AH-SH*)SR
(4,000-4,800)20

EUP
160
700
100
960

16000

favorable

*SH = 960 x 5 = 4,800

11. 1821005 or 1826000 (if assumed P10 is per unit)

Koo
Lam

2,000 lbs.
3,000 lbs.

P 3,000
2,000

Joint cost
Cost of by product:
using reversal cost method
SV
420000
Less:
APC
180000
CTS
10
Profit
42000
Total joint cost

Sales value
6,000,000 50%
6,000,000 50%

Allocation
1,821,005
1,821,005
3,642,010

3,840,000

197,990
3,642,010

Or, if P10 is spent to sell Wiz is assumed per unit price, then

Koo

2,000 lbs.

P 3,000

Lam

3,000 lbs.

2,000

Joint cost
Cost of by product:
using reversal cost method

reahdelmontegordo

Sales value
6,000,00
0 50%
6,000,00
0 50%

Allocation
1,826,000
1,826,000
3,652,000

3,840,00
0

Page 6 of 16

SV
Less:
APC
CTS
Profit

420000
180000
10000
42000

188,000
3,652,00
0

Total joint cost

12. traditional 4.8; ABC - 10

TRADITIONAL
Total set-up cost
Divided by: Total DL hours
Cost per hour
X DL hour per unit
Set-up cost per unit

ABC
Total set-up cost
Divided by: Set-up cost per batch
Cost per hour
X Set-up cost per batch for Prod A
Total set-up cost
Divided by: Production Volume
Set-up cost per unit

60000
25000
2.4
2
4.8

60000
3000
20
1000
20000
2000
10

13. 99265 or 104265

Job order #
1001
1002
1003
1004
1005
1006

DM
4,320
9,150
11,27
5
3,225
6,500
2,750
37,22
0

DL
1,600
7,250
14,325
2,800
6,100
1,650
33,725

Total cost of placed in process

OH
1,950
5,550
12,30
0
2,250
4,800
1,470
28,32
0

Job order #
1001
1002

99265

Total Manufacturing cost

WIP beginning

99,265
5,000

Total cost of placed in process

104265

1003
1004
1005
1006

DM
4,320
9,150

DL
1,600
7,250

OH
1,950
5,550

11,275
3,225
6,500
2,750

14,325
2,800
6,100
1,650

12,300
2,250
4,800
1,470

37,220

33,725

28,320

14. 174.05
Cost of 8000 pairs
Less:
Spoilage
400 pairs-due to fault of the client
200 pairs-due to production
Total cost
Cost at 140%
Divided by: no. of acceptable pairs
Price per unit to be charged to client

960,000

16,00
0
24,00
0

40,000
920,000
1,288,000
7,400
174.05

15. 5359200
Using 2-way analysis
Controllable variance

reahdelmontegordo

Page 7 of 16

AFOH
BASH

1,200,000
4,147,200

Volume Variance
BASH
SHSR
(SQUEEZED)

5,323,200
5,347,200

24,000

unfavorable

5,347,200
5,359,200

12,000

favorable

16. 102900
RIP to FG

FG to CGS

Beg (5000-500)
Purchases
End (5250-650)

4,500
100,000
4,600

Beg (11,250-3,250)
RIP to FG
End (7,500-2,500)

99,900

8,000
99,900
5,000
102,900

17. 13468
Product
A
B

Sales
price
4.5
9

Units
2,000
4,000

Joint cost
Joint cost
By product (500 x P.40)

Final SV
9,000
36,000

APC
10,000

SV @ SO
9,000
26,000
35,000

%
0.26
0.74

allocation
4,732
13,468
18,200

18,000
200
18,200

18. 50000
Sales
Variable cost
Contribution margin
Fixed cost:
Avoidable
Unavoidable
Net Income

continue
50,000
34,000
16,000
16,000
21,600
-21,600

drop
0
0
0
0
0
21,600
-21,600

Sales
Variable cost (92000-37600)
Contribution margin
Fixed cost:
Avoidable
Unavoidable

80,000
54,400
25,600

%
100
68
32

16,000
21,600

19. 2.86
Quantity Schedule
Beg
6,000
SIP
15,000
UTAF
21,000
Units completed
Ending
Lost
UAAF

12,000
8,000
1,000
21,000

Mat
12,000
8,000
1,000
21,000

CC
12,000
6,000
750
18,750

Trans-in

21,000

Cost Data

reahdelmontegordo

Page 8 of 16

Beg
Current
TCTAF
Divided by EUP

15,500
39,500
55,000

Cost per unit

Cost of lost units

2,500
5,500
8,000
21,000

1,000
5,000
6,000
18,750

12,000
29,000
41,000
21,000

0.38

0.32

1.95

2,573.33

2.6
5
0.2
1

2.86

20. 22000
Quantity Schedule
In process, beg
SIP
UTAF
Completed & transferred
Completed & on hand
End 1/4 (7/8 complete)
End 1/2 (1/2 complete)
End 1/4 (1/6 complete)
Lost - at the start
Lost - 50%
Lost - 80%

12,000
100,000
112,000
71,840
4,160
6,000
12,000
6,000
2,000
4,000
6,000

A
71,840
4,160
6,000
12,000
6,000

B
71,840
4,160
6,000
12,000

4,000
6,000
110,000

4,000
6,000
104,000

Differenc
e

C
71,840
4,160
6,000

6,000
88,000

22,000

21. 182800
WIP, beginning
Direct material (3000 units x P2.4/unit)
Direct labor (3000 units x P0.80 per unit)
Overhead (48 hours x P100)
Current manufacturing cost
Cost of goods placed in process
Less: WIP, ending
Direct material (2000 units x P2.4/unit)
Direct labor (2000 units x P0.80 per unit)
Overhead (32 hours x P100)
Cost of goods manufactured
Finished goods, beginning
Cost of goods available for sale
Less: Finished goods, ending
Direct materials
Direct labor
Overhead
COST OF GOODS SOLD

7,200
2,400
4,800

4,800
1,600
3,200

5,000
3,000
6,000

14,400
180,000
194,400

9,600
184,800
12,000
196,800

14,000
182,800

22. Decrease by 30000

Contribution margin
reahdelmontegordo

240,000
Page 9 of 16

Avoidable fixed cost

Segment margin

210,000
30,000

A positive segment margin implies that it is profitable if the department is continued. Dropping or discontinuing the
department will have a negative effect on the companys income; that is, decrease by an amount equal to the
segment margin.

23. 1900 unfavorable

Variable overhead spending variance
AVOH
AHSVOR

88,600
86,700

Variance

1,900 unfavorable

24. absorption; 26250

Production < Sales so, absorption costing method would show lower operating income for 2006.
No. of units produced
No. of units sold
Fixed OH rate (113,750/32,500)

32,500
40,000
7,500
3.5

Difference in income

26,250

25. no increase; decrease by 2000

Reduction in selling price
Increase in units sales

(0.40 x 25,000 units)

(1.6 x 5000 units)

Effect in profits

-10000
8000
-2,000

26. buy = 30000; make = 28,800

Purchase price
Cost if part is made in-house
Fixed overhead saved if part is purchased
Rental income if part is purchased
Total cost

BUY
30,000

MAKE
20,000
6,000
2,800

30,000

28,800

27. 250000
1.20x + 800,000 = x + 850,000
1.20x - x = 850,000 - 800,000
0.20x = 50,000

reahdelmontegordo

Page 10 of 16

x = 250,000
WIP beginning
Total manufacturing cost
Cost of goods placed in process
Less: WIP ending
Cost of goods manufactured

300000
800,000
1100000
250,000
850,000

28. 22481.49

Beginning
Started and completed
Ending

Before

After

2,760.00
26,714.29
1,680.00

2,628.57
21,371.43
1,460.87

Evaporation loss

Evaporation
loss
131.43
5,342.86
219.13
5,693.42

Beginning
Started in process

2,760.00
28,613.42

Gallons to account for

31,373.42

Beginning
Started & completed
Ending

2,628.57
21,371.43
1,680.00

Evaporation Loss

5,693.42

Gallons accounted for

31,373.42

EUP
525.71
21,371.43
584.35

22,481.49

29. 41600
30. 10800
31. 9000
Quantity Schedule
Beginning
Started in process

4,000
20,000

Units to account for

24,000
Mat

Beginning
Started & Completed
Completed
Ending

4,000
14,000
18,000
6,000

Units accounted for

24,000

14,000

CC
1,000
14,000

6,000

2,000

20,000

17,000

Mat

CC

Trans-in

12,000
20,000

10,200
17,000

20,000
20,000

Cost data
Beginning costs
Current costs
Divided by EUP
reahdelmontegordo

4,600
22,200

Page 11 of 16

Cost per unit

0.60

0.60

Finished and Transferred

Beginning
Cost to complete
Started & Completed

4,600
600
30,800

36,000

Ending work in process

Trans-in
Mat
CC

6,000
3,600
1,200

10,800

1.00

2.20

Cost Allocation

For total cost allocated to SIP (30,800 + 10,800)

41,600

Current conversion cost allocated to completed units

9,000

32. 484000
Work in process, beginning
Current manufacturing cost
Direct materials
Beginning
Purchases
Freight-in
Less: PRA
Less: Ending
Direct labor
Factory overhead

145,000

67,000
163,00
0
4,000
2,000
62,000

170,000
200,000
140,000

510,000

Total cost placed in process

655,000

Less: Work in process, ending

171,000

Cost of goods manufactured

484,000

33. 1915200
Direct materials
Direct labor
Overhead

(42,000 units x 2 x 12)

(42,000 units x 12)
(42,000 units x 12 x 80%)

Budgeted cost of sales

1,008,000
504,000
403,200
1,915,200

34. 66875.2
35. 21296
Mat

beginning
ending

CC

beginning
ending

reahdelmontegordo

68% complete
32% work to be done
25% complete
75% work to be done
60% complete
40% work to be done
40% complete
60% work to be done
Page 12 of 16

S&C

Received for A

50,000

In process, beg

12,000

Units to account for

Less: Ending
Less: beginning
S&C in units

62,000
22,000
12,000
28,000

Total current unit cost

1.1

Beginning
Cost to complete
Started and completed
Ending

(0.9 + 0.08 + .12)

Mat
816
307.2

CC
1,080
576

Trans-in
12,000

440

1056

19,800

Total
13,896
883.2
30,800
21,296

Total cost to account for

66875.2

36. 23130
Cost schedule
Mat
360

CC
630

Trans-in
18,00

Current cost

Total
2,790
20,34
0

4,020

4,320

12,000

Total cost to account for

23,13
0

4,380

4,950

13,800

Beginning

37. 402700
RIP to FG

FG to CGS

Beg
Purchases
Less: End

20,100
406,000
21,600

Beg
RIP to FG
Less: End

84,000
404,500
85,800

404,500

402700

38. 395000
Input:
Output:

2,500,000 pounds
3,500,000 pounds (2,500,000 pounds x 1.4)

3,500,000/100 = 35,000 x 12
1,250 tons x 20

420,00
0
(25,000)
395,000

39. 267500
Chemicals
Direct labor
Overhead

(25,000 x 7 x .4)
(35,000 x 3)
(35,000 x 1.5)

Additional costs

reahdelmontegordo

70,000
105,000
52,500
227,500
40,000

Page 13 of 16

267,500

Incremental Cost

40. 51000
Sell or process further?
Criteria:
If incremental revenue > incremental costs of further processing = PROCESS FURTHER
If incremental revenue < incremental costs of further processing = SELL AT SPLIT-OFF
Product
s
M
N
O
P

Final SP
180,000
132,000
52,000
12,000

SP @ SOP
80,000
36,000
10,000
-

Incremental revenue
100,000
96,000
42,000
12,000

Incremental costs
110,000
60,000
40,000
15,000

Incremental profit
(10,000)
36,000
2,000
(3,000)

If the companys decision as to whether to process further or not were incorrectly made for all products (that is,
those to be processed further are sold at split-off; and those to be sold at split-off are processed further), the
difference in income if the correct decision was followed is simply equal to the sum of all the incremental profits.
Products
M
N
O
P

Incremental profit
(10,000)
36,000
2,000
(3,000)

SHOULD BE done
sell
process
process
sell

WHAT WAS done

process
sell
sell
process

51,000

41. 1975 unfavorable

Labor yield variance (SAS SSS)
Square feet of tiles laid
Std. hours of labor per sq. ft of tiles laid
Standard hours of labor
Actual labor hours used

SAS

SSS

62500
0.298
18625
18750

(62500 x 0.298)
(7500 + 11250)

grade 2

Mix
38%

Quantity
18,750

Price
22

MxQxP
(sas / sss)
156,750

grade 1

62%

18,750

12

139,500

grade 2

38%

18,625

22

155,705

grade 1

62%

18,625

12

138,570

LABOR YIELD VARIANCE

296,25
0

294,27
5
1,975

unfavorable

42. D If Downtown store is closed, income decreases to P13,200

Using incremental analysis,
If downtown store is colsed, effect on income:
10% decrease in Mall store sales

reahdelmontegordo

(4,800)

Page 14 of 16

Positive segment margin of Downtown store

CM
36,000
Avoidable FC
(30,000)
6,000
NET EFFECT ON INCOME

(6,000)
(10,800)

So, income should be equal to:

Income before downtown store is closed
Net effect on income is downtown store is closed

24,000
(10,800)
13,200

Net income if downtown store is closed

Using total approach,
Sales
Variable expenses
Contribution margin
Fixed expenses
Net income

mall
72,000
(28,800)
43,200
(20,000)

downtown
(10,000)

total
72,000
28,800
43,200
30,000

23,200

(10,000)

13,200

43. 0.08 or 8%
Wait time
Inspection time
Process time
Move time
Queue time

17
0.4
2
0.6
5
25

reahdelmontegordo

Manufacturing cycle efficiency:

(2 days / 25 days)

0.08

Page 15 of 16

NOTE:
Akon la inin solutions guys.. so theres no 100% reliability..hehe..
Bsta pag may sayop, try to find way nla to solve it
Hope this will help you
Goodluck!
-rai

reahdelmontegordo

Page 16 of 16