Answer: D

Monthly fixed costs 480,000 / 12 P 40,000

Variable 20,000 x 5 100,000
Total P140,000

. Answer: B
Monthly budgeted fixed cost (72,000/12) P 6,000
Variable cost based on actual units:
Number of hours allowed
(96,000 x 5/60)= 8,000 hours
Variable cost: 8,000 x 1.60 12,800
Budgeted overhead cost P18,800

. Answer: C
The solution can be made using an equation approach:
a = y bX
(P2,300,000 50,000X)1.25 = P2,800,000 60,000X
2,875,000 62,500X = 2,800,000 60,000X
2,500X = 75,000
X = P30

. Answer: B
Variable factory overhead (150,000/60,000) P2.50
Fixed overhead [240,000/(60,000 x 0.80) 5.00
Total rate P7.50

Note: Variable rate per activity unit is constant. Fixed overhead per unit behaves inversely with the activity-
unit level.

. Answer: B
Variable rate = ( in activity cost)/( in activity level)
= (P84,000 P46,000)/(3,500 1,100)
= P16.00

Fixed cost a = y bx
a = P46,000 (1,100 x 16)
a = P28,400

. Answer: B
Days Occupancy:
70% -- 2,000 x 30 days x 0.7 42,000
45% -- 2,000 x 30 days x 0.45 27,000

Variable cost per Room Day:

(42,000 x 21) - 792,000
P6.00
42,000 - 27,000

Fixed costs: 792,000 (27,000 x 6) P630,000

Cost at 60% rate:

 Variable:
2,000 x 30 x 0.6 x P6 P216,000
Fixed 630,000

Total P846,000

. Answer: D
b = (853.560 723,060) (540,000 450,000)
130,500 90,000 P 1.45

a = 853,560 (540,000 x 1.45) P 70,560

Y = 70,560 + 1.45b
= 70,560 + (470,000 x 1.45) P752,060

. Answer: D
X = 36
Y = 2,320
XY = 22,600
X2 = 404

Y = na + bX
XY = as + bX2

2,320 = 4a + 36b
22,600 = 36a + 404b
20,880 = 36a + 324b
1,720 = 80b
b = 21.50

2,320 = 4a + (36 x 21.50)

2,320 = 4a + 774
4a = 1,546
a = 386.50

Y = 386.50 + 21.50 X
Y = 386.50 + (10 x 21.50)
Y = 601.50

. Answer: C
4X = 42,500 17,500
4X = 25,000

X = 6,250

. Answer: C
b = (31,000 27,000) (15,000 12,500)
4,000 2,500
b = 1.6

a = 31,000 - (15,000 x 1.60)

 a = 7,000

Y = 7,000 + 1.60X

. Answer: B
61,000 - 58,500
Variable Rate =
3,000
= 0.8333

Fixed : 61,000 (34,000 x .8333)= 32,677

. Answer: A
b = (720 640) (600 - 200)
80 400 P0.20

a = 720 (600 x .2)

720 120 P600

Total Cost for month of May

Y = 600 + (500 x 0.2) P700

. Answer: B
Y = 100 x 3 P300

Within a relevant range, the amount of total fixed cost remains constant at P4,000. The only cost that will
change in total is variable cost because every additional hour will add P3 to total costs.

. Answer: A
Unit level costs: P12000 3000 x 800 P3,200
Product level costs: P1,000 40 x 4 100
Customer level costs: P3,500 10 350
Cost of Job 002 P3,650

Within a relevant range, the amount of fixed cost remain constant at P4,000. The only cost that will charge in
total is variable cost between every additional hour will be accompanied by an increase of P3.

. Answer: B
Total number of minutes used after completing 8 units:
(10 .7 .7 .7) 3.43

. Answer: C
Cumulative average after completing 4 units:
1,500 .9 .9 P1,215

Total costs of 4 units 4 x P1,215 P4,860

Less total costs of first 2 units 1,500 x 0.9 x 2 2,700

Additional costs P2,160

. Answer: D
 Net income P 50,000
Add: selling and admin. Expense 120,000
Gross Margin 170,000
Add: excess of contribution margin over gross margin 15,000
Contribution Margin P185,000

. Answer: B
X = 91
Y = 687
XY = 15,669
X2 = 2,085

687 = 4a + 91b
15,669 = 91a + 2,085b
15,629.25 = 91a + 2,070.25b
39.75 = 14.75b

b = P2.70

687 = 4a + (91 X 2.695)

687 = 4a + 245.25
4a = 441.75
a = P110.44

Y = P110.44 + P2.70X

. Answer: C
Variable OH rate P 2.00
Fixed OH rate (340,000 425,000) 0.80
Total OH rate P 2.80

. Answer: B
b = (8,500 6,750) ( 2,000 1,500)
= 1,750 500
b = 3.50
a = 8,500 (2,000 x 3.5)
a = 1,500
y = 1,500 + 3.50X

. Answer: A
Change in cost Change in sales = Variable cost per peso sale
(P69,000 P52,000) (P148,000 P97,000)
P17,000 P51,000 = P0.333.

. Answer: B
Contribution margin per unit:
(P154,000 + P26,000) 12,000 units P15.00
Variable cost per unit: P20.00 P15.00 P 5.00

. Answer: B
X = 1,150,000
 Y = 3,110,000
XY = 770,900 Million
X2 = 307, 100 Million

The least-squares method is based on the cost model

Y = a + bX

I. Since all the observations are included, all the values are summed up:
Y = na + bX

II. To minimize distortion, the first equation is made bigger by multiplying it by X.

XY = aX + bX2

III. Solve for values of b and a

Eq. 1: 3.11 = .000005 + 1.15b
Eq. 2: 770,900 = 1.15a + 307,100b
715,300 = 1.15a + 264,500b
55, 600 = 42, 600b
b = P1.305164

770,900 = 1.15a + ( 307,100 x 1.31)

1.15a = 370,085
a = P320, 520

. Answer: A
X = 20
Y = 53,500
XY = 231,500
X2 = 90

53,500 = 5a + 20b
231,500 = 20 + 90b
214,000 = 20a + 80b
17,500 = 10b

b = P1,750

. Answer: D
Net income P 50,000
Add Fixed Costs:
Manufacturing P 15,000
Selling and administrative 120,000 135,000
Total Contribution Margin P185,000

. Answer: A
Maintenance cost at high level:
Total factory overhead P17,625,000
Less: Indirect materials (variable) 75,000 x P100 ( 7,500,000)
Rent (fixed) ( 6,000,000)
Amount of maintenance cost P 4,125,000
. Answer: A
Analysis of maintenance cost
b = (P4,125,000 P3,250,000) (75,000 50,000)
b = 875,000 25,000
b = P35

a = P3,250,000 (50,000 x P35)

a = P1,500,000

Indirect materials 70,000 x 100 P 7,000,000

Rent 6,000,000
Maintenance 500,000 + (70,000 x 35) 3,950,000
Total Overhead costs P16,950,000

. Answer: B
b = (135,000 75,000) (120,000 40,000) 60,000 80,000 P0.75
a = P75,000 (40,000 x 0.75) P45,000

Answer: D
Y = P45,000 + P0.75X
Y = P45,000 + (110,000 x P0.75) P127,500

. Answer: A
Number of bed days based on occupancy rate of:
80% = 450 x 30 x 0.8 10,800
60% = 450 x 30 x 0.6 8,100

(10,800 x 32) - 326,700

b=
10,800 - 8,100

18,900 2,700 P7

. Answer: B
a = P326,700 (8,100 x P7) P270,000

. Answer: C
Number of bed days at 75% occupancy rate
0.75 x 30 x 450 = 10,125
Y = P270,000 + (10,125 x P7) P340,875

. Answer: C
b = (P130,000 P115,000) (100,000 80,000)
P15,000 20,000 P0.75

. Answer: A
a = P130,000 (10,000 x P0.75)
a = P55,000

Total fixed overhead:

Maintenance Cost P 55,000
 Depreciation 60,000
Total P115,000

. Answer: B
Utilities 110,000 x P0.6 P 66,000
Maintenance P55,000 + (110,000 x P0.75) 137,500
Depreciation 60,000
Total P263,500

. Answer: B
b = (P775 - P550) (650 - 420)
P225 230

b= P0.98

a = P775 - (650 x 0.98)

= P775 - 637

a = P138.00

. Answer: C
Slope represents the variable rate.
Intercept represents total fixed cost

. Answer: C
Y = 12 x 30
= P360

a = P360 (12 x 3 x 10)

=0

. Answer: A
(105,000 x P11.40) - (70,000 x P13.40)
b=
105,000 - 70,000

b = (P1,197,000 P938,000) 35,000

b = P7.40

a = P938,000 (70,000 x P7.40)

a = P420,000

Y = P420,000 + P7.40X
Y = P420,000 + (80,000 x 7.40)
= P1,012,000

. Answer: D
Number of units sold = 1,500,000 7,500 200

Costs of goods sold = P200 x 4,500 P900,000

Variable selling expenses 200 x 500 P100,000
 Variable administrative expenses 0.20 x 100000 20,000
Total P1,020,000

. Answer: D
The total cost at an activity level of 16,000 units is determined as follows:
Total cost = P30,000 + (16,000 units x P5.00 per unit) P110,000

. Answer: C
Total Fixed Costs include:
Rental P 3,000
Cost of the caller 200
Prize money P10,000
Total P13,200

Total Variable costs are:

P3 per person for the 1,000 people attending P 3,000

. Answer: B
The cost of supplies varies based upon the number of players that attend each session not just the number of
sessions

. Answer: D
Total costs: (P3,000 + P13,200) P16,200

If the number of people attending each session is the same, all of the costs act like variable costs and the
average cost per session equals the total cost per session.

. Answer: B
If they hold 2 sessions per day:
Hall Rental P 3,000
Caller salary (2 x P200) 400
Total prize money 20,000
Total cost of supplies 6,000
Total P29,400
Average cost per session P29,400 2 sessions P14,700

The hall Rental is fixed per day and not per session. The prize money and cost of the caller varies per session
and the cost of supplies varies per person attending.

. Answer: C
Cost of Goods sold is P15 per unit. A variable cost is one which is constant per unit.
Unit sales Unit Variable Cost
1,000 15,000 1,000 P15
2,000 30,000 2,000 P15
3,000 45,000 3,000 P15

. Answer: B
The salary is a mixed cost. Notice that the cost per unit and in total for each volume level are not the same.
There is a variable cost component of P10 per unit and a fixed cost component of P10,000. Within a relevant
range, unit variable cost as well as total fixed cost are constant.
 Variable cost (30,000 20,000) (2,000 1,000) P 10
Fixed cost 20,000 (1,000 x 10) P10,000

. Answer: C
Cost of Goods Sold is a variable cost. Rent and Depreciation are fixed costs. Salary is a mixed cost that has
some fixed cost behavior.

. Answer: B
Sales P60 * 3000 units P180,000
Total Variable Cost 75,000
Contribution Margin P105,000

Total variable cost:

Cost of goods sold P45,000
Variable salary cost 30,000
Total P75,000

. Answer: B
Rent P20,000
Depreciation 30,000
Fixed salary cost 10,000
Total fixed costs P60,000

. Answer: C
To analyze mixed cost using high-low method, the analyst always identifies and uses the lowest and the highest
levels of activities. The reason is that the activity presumably causes costs, so the analyst would like to use data
that reflects the greatest possible variation in activity.

. Answer: D
The question does not require a computation. R2 (goodness of fit) indicates the percentage of the variation in
the dependent variable (cost) that is explained by variation in the independent variable (activity). The adjusted
R2 varies from zero to 100%, and the higher the percentage, the better.

. Answer: A
Variable cost 20,000 x 3.5 P70,000
Fixed cost 3,500
Total cost P73,500