Case study on Master in Business Administration
University of the Immaculate Conception Master in Business Administration Program BA 205 – Management Accounting and Control Mid-Term Examination 1. Using the following data, find the missing items. Total assets, beginning of year . . . . . . . . . . . . . . . . . . . . . . P1,050 Total assets, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . P1,200 Total liabilities, beginning of year . . . . . . . . . . . . . . . . . . . . . P 630 Total owners’ equity, end of year . . . . . . . . . . . . . . . . . . . . . P 480 Net income for year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P 164 Additional capital invested during year . . . . . . . . . . . . . . . . . P 50 Contributed capital, beginning of the year . . . . . . . . . . . . . . P 200 a. Total owners’ equity at the beginning of the year. b. Total liabilities at the end of the year. c. Retained earnings at the beginning of the year. d. End-of-the-year retained earnings. e. Dividends declared during the year. 2. Seneca Company has two products with the following information: Engine Race Rebuilds Cars Total Annual revenue P1,200,000 P1,400,000 P2,600,000 Material costs 400,000 P 600,000 P1,000,000 Labor costs 250,000 150,000 P 400,000 Number of receipts 8,000 2,000 Number of batches 425 75 The business also has overhead costs as follows: Cost pool Cost in pool Cost driver__________ Receiving P300,000 number of receipts Material moves 275,000 number of batches Administrative 225,000 labor cost Total P800,000 a. Allocate the overhead costs to the segments based on material costs. b. Determine the income of each segment. c. Allocate the overhead costs to the segments using ABC. d. Determine the income of each segment under ABC. 3. Parsons Company incurred P475,000 in overhead costs making 40,000 units in August. It made 30,000 units and incurred P447,000 in overhead costs in September. a. Compute the variable component of overhead cost. b. Find the fixed factor of overhead cost. 4. Eleva Company has sales of P350,000, variable costs of P200,000, and fixed costs of P125,000. Eleva has an effective tax rate of 40%. a. Compute the break-even point. b. Compute Eleva’s sales needed to earn a P75,000 after-tax profit. c. Compute the sales Eleva would need to earn a 15% after-tax return on sales. 5. Superior Company manufactures a single product. It keeps its inventory of finished goods at twice the coming month’s budgeted sales and inventory of raw materials at 150% of the coming month’s budgeted production. Each unit of product requires five pounds of materials, which cost P3 per pound. The sales budget is, in units: May, 10,000; June, 12,400; July, 12,600; August, 13,200. a. Compute budgeted production for June. b. Compute budgeted production for July. c. Compute budgeted material purchases for June in pounds and in pesos. 6. Hicks Company has the following sales projections for 20X4: January P160,000 March 175,000 May 195,000 February 168,000 April 180,000 June 190,000 Hicks collects 30% of its sales in the month of sale, 45% in the month following the sale, and 24% in the second month following the sale. Records show that sales were P160,000 in November and P168,000 in December 20X3. a. Prepare a schedule of cash receipts and determine the total cash receipts for the first three months of 20X4. b. What would be the accounts receivable balance (net of bad debts) on March 31, 20X4? 7. The data below relate to a product of Salois Company. Standard costs: Materials, 2 pounds at P6 per pound P12 per unit Labor, 3 hours at P15 per hour P45 per unit Variable overhead at P8 per labor hour P24 per unit Budgeted fixed production costs P140,000 per year Budgeted production for the year 4,000 units Actual results were: Production 3,700 units Material purchases, 8,000 pounds P 46,400 Labor, 10,360 hours P160,580 Variable overhead incurred P 84,700 Fixed overhead incurred P137,500 Material used in production 7,300 pounds For each variance, determine the amount and indicate whether each is favorable or unfavorable: a. Material price variance. b. Material use variance. c. Direct labor rate variance. d. Direct labor efficiency variance. e. Variable overhead budget variance. f. Variable overhead efficiency variance. g. Fixed overhead budget variance.
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