CAPE, JESSIELYN VEA C.

PCBET-01-301P
AC9/ THURSDAY/ 9:00AM-12:00PM
CHAPTER 7

Multiple choice- Theoretical

1. C
2. B
3. B
4. B
5. B
6. C
7. A
8. D
9. A
10. C
11. A
12. C

Multiple choice- Computational

1. C
30,000/ 40,000 x P100,000= P75,000

2. A
40% x P20,000= P10,000

3. B
Computer time (P4,500 x 70%) = P3,150
Computer program (P4,500- P3,150) + P2,500= P3,850

4. A

5. D
Service department costs:
S1 = P27,000 + .20 S2
= P27,000 + .20 (P18,000 + .10 S1)
= P27,000 + P3,600 + .02 S1
0.98S1 = P30,600
S1 = P31,224

S2 = P18,000 + .10(P31,224)
= P18,000 + P3,122
= P21,122
Total service cost allocated to P2: (40% x P31, 224) + (50% x P21,122) = P23,051
6. D
30% / 90% x P9,000= P4,500

7. B
Under the step method, the maintenance department would allocate its P18,700 of cost first,
because it has the greatest total cost. Note that both the maintenance and utilities department
provides service to the other service department. Thus, the criterion for first allocation is
greatest cost, not greatest number of service department.

8. C
As determined in No. 7, Maintenance Department budget is allocated first under the step
method. Thus, P3, 740 (20% of P18,700) is allocated to the Utilities Department. Now the
Utilities Department has P12,740 (P9,000 allocate between Department A and B.

9. B
Under the reciprocal method, simultaneous equations are developed to determine the gross
costs of each service department, taking into account the interactive effect of other service
departments providing inter service department service. For Utilities, the cost is P9,000 plus
20% of the maintenance cost, 30% of it will be applied to Department A and 60% to B. The 10%
the have already been assigned to the Maintenance Department is reflected in the set of
simultaneous equations.

10. D
M = Maintenance Department’s total cost
E = Engineering Department’s total cost
M = P12,000 + .20E
E = P54,000 + .25M
E = P54,000 + .25 (12,000 + .20E)
E = P54,000 + P3,000 + .05E
.95E = P57,000
E = P60,000

11. A
Out of the total Engineering Department’s cost of P60,000, P48,000 is allocated to producing
departments on the basis of total hours as follows:

Dept. A: (800/2,000) x P60,000 = P24,000

Dept. B: (400/2,000) x P60,000 = 12,000
Dept. C: (400/2,000) x P60,000 = 12,000
Total P48,000
12. A
M = P12,000 + .20E
E = P54,000 + .25M
M = P12,000 + .20(P54,000 + .25M)
M = P12,000 + P10,800 + .05M
.95 = P22,800
M = P24,000

13. A

14. D
Under the direct method, no service department costs are allocated to another service
department. Thus, there would be no maintenance cost allocated to the Engineering
Department.

15. C
200/1,200 x P12,000 = P2,000

16. B
800/ 1,600 x P54,000 = P27,000

17. C
400/ 1,600 x P12,000 = P3,000

18. C
200/ 1,600 x P12,000 = P1,500

19. D
Under the step method, once department’s cost have been allocated to subsequent
departments, no reallocation back to Maintenance Department is to be made, no Engineering
costs is reallocated to the maintenance Department.

20. B
400/ 1,600 x (P54,000 + P3,000) = P14,250

21. D
Maintenance costs: (800/1,600) x P12,000 = P6,000
Engineering costs: (800/1,600) x (P54,000 + P3,000) = 28,500
Total allocated to Department A P34,500\
22. D
Total Factory Maintenance Cost x Fabrication Square footage occupied
Total Square Footage

P82,100 + P65,000 + P56,100 x 88,000 = P111,760

88,000 + 72,000

23. A
General Factory Adm. Dept. Cost x DLH of Assembly
Total Direct Labor Hours

P90,000 + P70,000 x 437,500 = P70,000

562,500 + 437,500

24. B
Total Factory Cafeteria Cost x No. of employee of Factory Maintenance
Total employee

P87,000 + P91,000 + P62,000 x 8 = P3,840

280+200 + 12+8

25. B
Factory Cafeteria cost P240,000
Factory Maintenance P203,300

Factory Cafeteria cost already closed out.

26. B
Pesos of Assets Employed % No. of employees %
Advertising 762,400 29 12 32
Circulation 1,870,300 71 25 68
Total P2,632,700 37

Advertising Circulation
Administration
781,500 x .29 226,635
781,500 x .71 554,865
Human Resources
492,700 x .32 157,664
492,700 x .68 335,036
Total P384,299 P889,901

Advertising: 957,800 + 384,299 = 1,342, 099

Circulation: 1,352,600 + 889,901 = 2,242,501
Total P3,584,600
27. A
Administration (781,500)
Base % Allocation
Human Resources 291,700 10 781,500
Advertising 762,400 26 203,190
Circulation 1,870,300 64 500,160
Total P2,924,400 P781,500

Human Resources (492,700 + 78,150 = 570,850)

Base % Allocation
Advertising 12 32 182,672
Circulation 15 68 388,178
Total 37 P570,850

Advertising: 957,800 +203,190 + 182,672 = 1,343,662

Circulation1,352,600 + 500,160 + 388,178 = 2,240,938
Total P3,584600

28. A
Administration Human Resource
Base % Base %
Administration - - 10 21
Human Resources 291,700 10 - -
Advertising 762,400 26 12 26
Circulation 1,870,300 64 25 53
Total P2,924,400 47

H = 492,700 + .10A

A = 781,500 + .21H
A = 781,500 + .21(492,700 + .10A)
A = 781,500 + 103,467 + .021A
.979A = 884,967
A =P903,950

H = 492,700 + .10(903,950)
H = 492,700 + 90,395
H =P583,095

Administration Allocation
Human Resource: 903,950 x .10 = P90,305
Advertising: 903,950 x .26 = P235,027
Circulation: 903,950 x .24 = P578,528
Human resource allocation
Administration: 583,095 x .21 = P122,450
Advertising: 583,095 x .26 = P235,027
Circulation: 583,095 x .53 = P309,040

Administration Human resource Advertising Circulation

Direct costs 781,500 492,700 957,800 1,352,600
Administration (903,950) 90,395 235,027 578,528
H. Resources 122,450 (583,095) 151,605 309,040
Total 0 0 P1,344,4332 P2,240,168

29. B
Administration Editorial
Department Base % Base %
Administration (A) - - 10 10
Editorial (E) 144,000 6 - -
College Texts 1,200,000 50 55 55
Prof. Pubs. 1,056,000 44 35 35
Total P2,400,000 100 100 100

E = P350,000 + .06A

A = 450,000 + .10E
A = 450,000 + .10 (350,000 + .06A)
A = 450,000 + 35,000 + .06A
0.994A = 485,000
A =P487,928

E = 350,000 + .06 (487,928)

E = 350,000 + 29,276
E =P3797,276

Administration Costs:
Editorial: 487,928 x .06 = P29,276
College Texts: 487,928 x .50 = P243,964
Prof. Pubs.: 487,928 x .44 = P214,688

Editorial Costs:
Administration: 379,276 x .10 = P37,928
College texts: 379,276 x .55 = P208,602
Prof. Pubs.: 379,276 x .35 = P132,746
Department Administration Editorial College Texts Prof. Pubs
Direct Cost 450,000 350,000 2,250,000 950,000
Administration (487,928) 29,276 243,964 214,688
Editorial 37,928 (379,276) 208,602 132,746
Total 0 0 P2,702,566 P1,297,434

30. A

31. C
Service Department 1 (150x .33) = 50
Service Department 2 (300 x .125) = 37.50
Total P87.50

32. C
Direct cost Operating Dept. A Operating Dept. B
Service Dept. 1 150 (.40/ .60) 100 (.20/ .60) 50
Service Dept. 2 300 (.70/ .80) 262.50 (.10/ .80) 37.50
Operating Dept. A 5,000 5,000
Operating Dept. B 6,000 6,000
Total P5,362.50 P6,087.50

33. C
DC SD1 SD2 OP A OP B
Service Dept. 1 150 - (.40) 60 (.40) 60 (.20) 30
Service Dept. 2 300 - 360 (.70/ .80) 315 (.10/ .80) 45
Total P375 P75

Service Department 1 (150 x .20) = 30

Service Department 2 (360 x (.10/ .80)) = 45
Total P75

34. A
5,000 + 375 = P5,375

35. C
SD2 = 300 + .40SD1

SD1 = 150 + .20SD2

= 150 + .20 (300 + .40SD1)
= 150 + 60 + .08 SD1
.92SD1 = 210
SD1 =P228.26
SD2 = 300 + .40SD1
= 300 + .40 (228.26)
= 300 + 91.30
SD2 =P391.30

Operating Dept. A: 91.30 + 273.91 = P365.21

Operating Dept. B: 45.65 + 39.13 = P84.78

36. A
5,000 + 365 = P5,365

37. D
Allocation from SS1 (29,387.76 x 40%) = 11,755
Allocation from SS2 (23,877 x 50%) = 11, 939
Total Allocated Service Department Cost=P23, 051

38. D
10,000/ 60,000 x 70,000 = P11,667

39. B
35,000 x (1/40) = P875