CPAR

CPA Review School of the Philippines

MANAGEMENT ADVISORY SERVICES FEBRUARY 2023

First Pre-board Examination – SOLUTIONS 93rd Batch

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

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

1. Profit before tax (₱75,000 ÷ 75%) ₱100,000 16. Actual cost ₱10,080
Add fixed costs 250,000 AQ at Std. price (4,200 x ₱2.50) 10,500
Contribution margin ₱350,000 Price variance – favorable ₱ 420
÷ Unit sales 125,000
CM per unit ₱ 2.80 17. Fixed cost (₱500,000 - ₱430,000) ₱ 70,000
₱430,000
Variable cost ( 5 ) x 8 688,000
Selling price ₱6.00
Total cost ₱758,000
Less CM per unit 2.80
Variable cost per unit ₱3.20
20. Increase in CM of Fat
₱200,000
12,415−11,737 (25,000 x ) ₱500,000
3. Var. cost per hour = 150−120
= ₱22.60 10,000∗
Decrease in CM of Thin
₱2,000,000
Total cost ₱11,737 (55,000 x ) 200,000
50,000∗∗
Var. cost (120 x 22.60) 2,712 Increase in fixed costs 245,000
Fixed cost ₱ 9,025 Increase in profit ₱ 55,000

4. Var. cost per unit ₱22.60 * ₱300,000 ÷ ₱30 = 10,000

9,025
Fixed cost per unit ( 130 ) 69.42 **₱2,500,000 ÷ ₱50 = 50,000
Total cost per unit ₱92.02
22. Actual time@ std. rate (4,100 x ₱12) ₱49,200
11. Absorption income ₱ 30,000 Std cost (1,000 x 4 x ₱12) 48,000
Difference in income (3,000 x ₱12.50*) 37,500 Efficiency variance – unf ₱ 1,200
Variable costing income (₱7,500)
24. AFOH (₱4,100 + ₱22,000) ₱26,100
₱100,000 BASH:
* Fixed overhead per unit = 8,000
= ₱12.50 Budeted fixed OH ₱20,000
Std. variable
12. Selling price ₱ 40 (19,000 x 0.1 x ₱2) 3,800 23,800
Cost per unit (₱3 + ₱5 + ₱1 + ₱12.50) 21.50 Controllable variance - Unf ₱ 2,300
Gross profit per unit ₱ 18.50
X units sold 5,000 25. AFOH ₱26,100
Gross profit ₱92,500 BAAH:
Absorption income 30,000 Budgeted fixed OH ₱20,000
SG & A ₱62,500 AH at Std VR
(2,100 x ₱2) 4,200 24,200
13. Ending inventory (8,000 – 5,000) 3,000 Spending variance - Unf ₱1,900
X variable mfg. cost per unit ₱ 9
Cost of ending inventory ₱27,000 26. BAAH ₱24,200
BASH 23,800
Efficiency variance – Unf ₱ 400
MANAGEMENT ADVISORY SERVICES
FIRST PREBOARD SOLUTIONS
BATCH 93 – FEBRUARY 2023
PAGE 2
_______________________________________

27. BASH ₱23,800 46. CMR (

₱200−₱150
) 25%
₱200
SH x SR (1,900 x ₱12*) 22,800
₱25,000
Volume or non-controllabe
Increase in income ₱ 6,250
Variance - unfavorable ₱ 1,000
49. Sales (300,000 x ₱2) ₱600,000
*Variable rate ₱ 2
₱20,000 Variable cost 450,000
Fixed rate ( ) 10 Contribution margin ₱150,000
20,000 𝑥 0.1
Standard rate ₱12 Fixed Cost 90,000
Profit ₱ 60,000
28. Fixed overhead is not affected by efficiency ÷ Average investment
[(500,000 + 700,000) ÷ 2] ÷600,000
30. Standard quantity (2 ÷ 80%) 2.50
x standard price ₱ 3 Return on average investment 10%
Standard cost per unit ₱7.50
50. Operating income ₱ 60,000
32. CMR (
₱130,000−₱100,000
) 30% Imputed interest (₱600,000 x 15%) 90,000
₱1,100,000−₱1,000,000
Residual income ₱(30,000)
VCR (100% - 30%) 70%
₱100,000−₱0
51. BEP = ₱90,000 ÷ [₱2 – (₱450,000 ÷ ₱300,000)]
33. CM per unit (250,000−200,000) ₱ 2 = 180,000 units
x Units BEP 200,000
CM = Fixed Costs at breakeven ₱400,000 52. Variable cost
[350,000 x (₱450,000/300,000)] ₱525,000
38. Budgeted sales 80,000 Fixed cost 90,000
Add ending inventory 18,000 Total ₱615,000
Total 98,000
₱178260−₱23,700
Less beginning inventory 15,000 53. VC per unit ( 35,000−3,000
) ₱4.83
Budgeted production 83,000
Total cost ₱178,260
39. Budgeted production 83,000 VC (35,000 x ₱4.83) 169,050
Materials per unit 5 Fixed cost ₱ 9,210
Production needs 415,000
Add ending inventory 23,000 Fixed cost per unit (₱9,210 ÷ 8,000) ₱1.15
Total 438,000 VC per unit 4.83
Less beginning inventory 27,000 Average cost per unit ₱5.98
Budgeted purchases 411,000
54. Budgeted revenue is equal to ₱8,964,000
40. Selling price ₱100 [(₱4,800,000 x 1.05 x 1.10)
Less variable cost per unit + (₱2,000,000 x l.08)
(₱10 + ₱7 + ₱5 + <₱100x10%˃) 32 + (₱1,200,000 x 1.05)].
CM per unit ₱ 68

₱6,864+₱37,200)
55. Budgeted total costs and expenses is equal to
BEP units = ( ₱68
) 648 ₱7,526,960

41. Actual time at std VOH rate [(₱3,360,000 x 1.05 (increase in unit sales) x 1.04
(11,000 x ₱8) ₱88,000 (increase in cost)]
Std VOH (12,000 x ₱8) 96,000 + [₱1,200,000 x 1.08 (increase in unit sales) x
Efficiency variance favorable ₱ 8,000 1.04 (increase in cost)]
+ [(₱600,000 x 1.05)
42. After-tax income (₱1,100,000 x 70%) ₱770,000 + (₱640,000 + ₱120,000) + ₱1,120,000].
Desired income (₱5M - ₱1.2M) x 10% 380,000
EVA ₱390,000 57. Actual time 25
x Difference in rates (₱8 - ₱10) ₱ 2
Spending variance – favorable ₱50
MANAGEMENT ADVISORY SERVICES
FIRST PREBOARD SOLUTIONS
BATCH 93 – FEBRUARY 2023
PAGE 3
_______________________________________

58. Product 1 Product 2

CM per unit ₱ 4 ₱ 12
Sales mix ratio 75% 25%
₱ 3 ₱ 3
Composite CM ₱6

₱100,000+₱212,000
Mixed Break even = = 52,000
₱6

Product 1 = 52,000 x 75% = 39,000

59. Change in inventory

(100,000 – 80,000) 20,000
₱180,000
x Fixed OH per unit ( 100,000 ) ₱ 1.80
Difference in income ₱36,000

60. Floor:
Cost to operate at capacity ₱45,000
Additional cost for excess
Capacity (50 x ₱48) 12,000
Total ₱57,000
÷ number of reports 1,250
Minimum cost per report ₱ 45.60

Ceiling = ₱70,000 ÷ 1,250 = ₱ 56

65. Total fixed cost (10,000 x ₱14) ₱140,000

÷ units 20,000
Fixed cost per unit ₱ 7

68. Let x = number of people

₱480,000 = ₱200,000 + ₱20x
₱280,000 = ₱20x
x = 14,000

70. Fixed OH in beginning inventory ₱95,000

Less Fixed OH in
ending inventory 25,000
Difference in income ₱70,000

- END -