CPAR

CPA Review School of the Philippines

MANAGEMENT ADVISORY SERVICES FEBRUARY 2024

First Pre-board Examination – SOLUTIONS 95th Batch

1. C 11. B 21. C 31. A 41. D 51. A 61. D

2. B 12. D 22. B 32. B 42. C 52. C 62. D
3. A 13. A 23. B 33. C 43. C 53. C 63. D
4. C 14. B 24. C 34. B 44. B 54. C 64. A
5. B 15. D 25. D 35. D 45. D 55. C 65. D
6. A 16. C 26. D 36. D 46. A 56. B 66. A
7. B 17. B 27. A 37. C 47. D 57. B 67. A
8. C 18. D 28. C 38. B 48. C 58. C 68. A
9. B 19. C 29. B 39. B 49. A 59. A 69. B
10. C 20. A 30. C 40. D 50. B 60. D 70. B

4. Materials ₱400,000
Labor 250,000
Prime cost ₱650,000

5. Difference in costs (₱1,250 - ₱800) ₱450

÷ Difference in packages (25 – 10) 15
Variable cost per package ₱ 30

Total cost ₱1,250

- Variable cost (25 x ₱30) 750
Fixed cost ₱ 500

Variable cost (14 x ₱30) ₱420

Fixed cost 500
Total cost for 14 packages ₱920

8. Actual labor cost ₱1,599,040

Actual time @ std. rate (84,160 x ₱20) 1,683,200
Rate variance ₱ 84,160 F

9. Sales (in units) 100,000

Desired ending inventory 12,000
Total needs 112,000
Less: Beginning inventory 8,000
Units to be produced 104,000

10. Units to be produced 104,000

x Direct materials per unit (kgs.) 4
Production needs (kgs.) 416,000
Add desired ending inventory (kgs.) 6,000
Total needs (kgs.) 422,000
Less beginning inventory (kgs.) 4,000
Materials to be purchased (kgs.) 418,000
x Cost per kilo ₱2.50
Total purchase cost ₱1,045,000
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First Pre-board Examination – SOLUTIONS page 2 of 4 pages

11. Units to be produced 104,000

x Labor hours per unit 0.5
Total hours needed 52,000
x Labor rate per hour ₱ 9
Total direct labor cost ₱468,000

13. Beginning cash balance ₱ 1,230

Cash sales 45,000
Sale of property 3,500
Total cash available ₱49,730
Less disbursements:
Materials and supplies ₱10,000
Direct labor payroll 12,500
Other expenditures 14,900 37,400
Ending cash balance ₱12,330

14. Unadjusted ending balance ₱12,330

Plus borrowing 3,000
Adjusted ending balance ₱15,330

15. In April, interest owed would be (1/12 x 0.12 x ₱3,000) = ₱30.

30 TO 33.

AFOH (₱26,250 + ₱38,000) ₱64,250.00

SFOH (4,500 x 2.50) x (₱1.75 + ₱3.10) 54,562.50
Total variance – unfavorable ₱ 9,687.50

Actual variable overhead ₱26,250.00

Actual time @ SVR (10,000 x ₱1.75) 17,500.00 Spending variance = 8,750 U
Std var (11,250 x ₱1.75) 19,687.50 Efficiency variance = 2,187.50 F

AFxOH ₱38,000
BFxOH 38,750 Fixed spending variance = 750 F
SFxOH (11,250 x ₱3.10) 34,875 Volume variance = 3,875 U

34. LEAST SQUARES METHOD:

Y = 6,152.97 + 176.79X
For 65 programs = ₱17,644.32

HIGH AND LOW POINTS METHOD:

Y = 6,625 + 165x
For 65 programs = ₱17,350

37. Profit before tax (₱75,000 ÷ 75%) ₱100,000

Add fixed costs 250,000
Contribution margin ₱350,000
÷ number of units 125,000
CM per unit ₱2.80
Selling price 6.00
Variable cost per unit ₱3.20
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First Pre-board Examination – SOLUTIONS page 3 of 4 pages

39. At breakeven, Fixed costs = Contribution margin ₱100,000

Breakeven sales = 50,000 x ₱10 500,000

CMR = ₱100,000 ÷ ₱500,000 = 20%

40. (6,000units x ₱20per unit = ₱120,000).

41. Standard cost (60,000 x ₱10) ₱600,000

Add unfavorable materials cost variance 15,000
Actual cost ₱615,000

43. Sales (48,000 x ₱25) ₱1,200,000

Variable costs (48,000 x ₱7.55) 362,400
Contribution margin ₱ 837,600
Fixed costs:
Factory overhead (51,000 x ₱4)₱204,000
SG&A 75,000 279,000
Income ₱ 558,600

44. (51,000 – 50,000) x ₱4 = ₱4,000 favorable

46. 275,000 ÷ 75,000 = 3.67

47. Sales ₱400,000

Less breakeven sales:
Fixed costs ₱200,000
÷ CMR (275/400) 68.75% 290,909
Margin of safety ₱109,091

48. Sales (P400,000 x 130%) ₱520,000

x CMR 68.75%
Contribution margin ₱357,500
Less fixed costs 200,000
Profit ₱157,500

51. WaCMR = ₱20,000/₱56,000 = 35.71%

Sales with profit of 15% = ₱10,000 ÷ (35.71% - 15%) = ₱48,285.85

Product A = 48,285.85 x 48/56 = 41,387.87 ÷ 12 = 3,448.98

Product B = 48,285.85 x 8/56 = 6,897.98 ÷ 8 = 862

54. JUNE:
Beginning inventory (4,000 x 40%) 1,600
Add production 6,000
Goods available for sale 7,600
Less sales 4,000
Ending inventory (40% of sales in July) 3,600

July sales = 3,600 ÷ 40% = 9,000

55. Sales commission (₱5 x 1,000) ₱ 5,000

Administration 10,000
Labor cost in S, G & A budget ₱15,000
MANAGEMENT ADVISORY SERVICES FEBRUARY 2024
First Pre-board Examination – SOLUTIONS page 4 of 4 pages

57. FOR JUNE:

Budgeted labor cost ₱136,500
÷ Labor rate 13
Budgeted time 10,500
÷ Labor time per unit 3
Budgeted production 3,500
Add beginning inventory (40% x 3,000) 1,200
Total 4,700
Less sales 3,000
Ending inventory (40% of July sales) 1,700

July sales = 1,700 ÷ 40% = 4,250

59. Labor ₱250,000

Overhead 350,000
Conversion cost ₱600,000

62. Sales (100,000 x ₱40) ₱4,000,000

x CMR (100% - 40%) 60%
Contribution margin ₱2,400,000
Less profit 500,000
Fixed cost ₱1,900,000

65. April credit sales = ₱21,000 ÷ 15% = ₱140,000

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