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MAY 2024 BATCH

REO CPA REVIEW

MANAGEMENT SERVICES
FIRST PREBOARD – MAY 2024 BATCH

1. Management accounting and financial accounting are similar in which of the following
respects?
A. Both use the same unit of measurement.
B. Both rely heavily on the double-entry system.
C. Both produce almost all of their respective informational reports on a routine monthly
basis.
D. Both provide relevant and useful information to management.

2. Which of the following is not part of the "perform" stage in the management process?
A. Matching human resources to the task to be performed
B. Hiring and training personnel
C. Identifying operating activities that minimize waste
D. Controlling operations

3. In today's competitive business environment, managers

A. need only be concerned with quality.

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B. must provide the highest value at the highest cost to customers.
C. must provide the highest value at the lowest cost to customers.
D. need not be concerned with the cost to the customers.
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4. Which of the following statements is true regarding the ethical standards of
management accountants?
A. Management accountants are not obligated to develop their knowledge and skills beyond
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the level they had when they sought employment with the company.
B. Management accountants are not responsible for monitoring their subordinates to ensure
maintenance of confidentiality within the company.
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C. Management accountants are allowed privacy and are not bound to refrain from
supporting activities of personal interest even when they could discredit the profession.
D. Management accountants should refrain from relationships with individuals that could
cause possible conflicts of interest.
C

5. A retail manager is preparing a budget for the coming year and is considering the
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various costs of the retail store. What is the best approach for the manager to take
when budgeting for the cost of the store's merchandise?
A. The total costs will stay the same as last year, but the unit cost will change with
each sale.
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B. The total cost of merchandise for the year and the unit cost will remain constant
with each sale.
C. The total cost of merchandise for the year will depend on the amount of sales, but
the unit cost of each sale will stay fairly constant.
D. The total costs will stay the same as last year, and the unit cost will remain
constant with each sale.

6. The delivery trucks of Italiana's Pizzeria incurred maintenance costs of P2,400

during its busiest month of 20xx, in which 8,000 miles were driven collectively. During
its slowest month, P1,800 in maintenance costs were incurred, resulting from 5,000 miles
being driven. Using the high-low method, what maintenance cost would the company expect
to incur at 6,800 miles of driving?
A. P2,160
B. P2,060
C. P2,310
D. P2,010

7. In a graph of cost-volume-profit analysis, the

A. total revenue line typically begins at a required minimum level.
B. slope of the total cost line is dependent on the variable cost per unit.
C. total cost line normally begins at zero.

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D. sales level at which total cost and total revenue lines intersect is also equal to
fixed costs.

8. At production levels beyond the breakeven point,

A. fixed costs are not recovered.
B. profit is negative.
C. variable costs are zero.
D. profit is positive.

9. How many total pesos of sales must BAC Company sell to break even if the selling
price per unit is P8.50, variable costs are P4.00 per unit, and fixed costs are
P9,000?
A. P4,000
B. P8,500
C. P9,000
D. P17,000

10. Edward Cheezer's makes and sells frozen four-cheese pizzas, New York–style. The
expected selling price is P10 per pizza. The projected variable cost per pizza is P6.
The estimated fixed costs per month are P10,000.

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The number of pizzas that must be sold to obtain a monthly profit of P20,000 is
A. 2,000 pizzas.
B. 5,000 pizzas.
C. 2,500 pizzas.
D. 7,500 pizzas. i
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11. Dilly LLC, wants to make a profit of P30,000. It has variable costs of P66 per
unit and fixed costs of P20,000. How much must it charge per unit if 5,000 units are
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sold?
A. P51
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B. P36
C. P66
D. P76
C

12. The following data are available for the Phelps Corporation for a recent month:
Product A Product B Product C Total
Sales P150,000 P130,000 P90,000 P370,000
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Variable expenses 91,000 104,000 27,000 222,000

Contribution margin P59,000 P26,000 P63,000 148,000
Fixed expenses 55,000
Net operating income P93,000
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The break-even sales for the month for the company is closest to:
A. P91,667
B. P203,000
C. P148,000
D. P137,500

13. Hedman Corporation has provided the following contribution format income
statement. Assume that the following information is within the relevant range.
Sales (9,000 units) P270,000
Variable expenses 202,500
Contribution margin 67,500
Fixed expenses 63,750
Net operating income P3,750

The margin of safety percentage is closest to:

A. 75%
B. 1%
C. 6%
D. 24%

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14. Goodman Corporation has sales of 3,000 units at P80 per unit. Variable costs are
35% of the sales price. If total fixed costs are P66,000, the degree of operating
leverage is:
A. 0.79
B. 0.93
C. 2.67
D. 1.73

15. A reason why absorption costing income statements are sometimes difficult to
interpret is that:
A. they omit variable expenses entirely in computing net operating income.
B. they shift portions of fixed manufacturing overhead from period to period according
to changing levels of inventories.
C. they include all fixed manufacturing overhead on the income statement each year as a
period cost.
D. they ignore inventory levels in determining cost of goods sold.

16. Generally speaking, net operating income under variable and absorption costing will:
A. always be equal.
B. never be equal.

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C. be equal only when production and sales are equal.
D. be equal only when production exceeds sales.

17. A company produces a single product. Variable production costs are P21 per unit and
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variable selling and administrative expenses are P4 per unit. Fixed manufacturing
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overhead totals P30,000 and fixed selling and administration expenses total P36,000.
Assuming a beginning inventory of zero, production of 6,000 units and sales of 5,600
units, the peso value of the ending inventory under variable costing would be:
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A. P10,000
B. P8,400
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C. P12,000
D. P14,400

18. Silver Corporation produces a single product. Last year, the company's variable
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production costs totaled P7,500 and its fixed manufacturing overhead costs totaled
P4,500. The company produced 3,000 units during the year and sold 2,400 units. There
were no units in the beginning inventory. Which of the following statements is true?
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(Round your intermediate calculations to 2 decimal places.)

A. Under variable costing, the units in the ending inventory will be costed at P4.00
each.
B. The net operating income under absorption costing for the year will be P900 lower
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than the net operating income under variable costing.

C. The ending inventory under variable costing will be P900 lower than the ending
inventory under absorption costing.
D. Under absorption costing, the units in ending inventory will be costed at P2.50 each.

19. Bellue Inc. manufactures a single product. Variable costing net operating income
was P96,300 last year and its inventory decreased by 2,600 units. Fixed manufacturing
overhead cost was P1 per unit for both units in beginning and in ending inventory. What
was the absorption costing net operating income last year?
A. P2,600
B. P93,700
C. P96,300
D. P98,900

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20. Lindsey Company uses activity-based costing. The company has two products: A and B.
The annual production and sales of Product A is 5,000 units and of Product B is 2,000
units. There are three activity cost pools, with estimated total cost and expected
activity as follows:
Estimated Expected Activity
Overhead Product Product
Activity Cost Pools Cost A B Total
Activity 1 P 24,000 200 800 1,000
Activity 2 P 36,900 750 150 900
Activity 3 P 63,000 1,000 800 1,800

The overhead cost per unit of Product A under activity-based costing is closest to:
(Round your intermediate calculations to 2 decimal places.)
A. P14.11
B. P13.77
C. P7.00
D. P17.70

21. Budgets identify, gather, summarize, and communicate

A. financial data only.

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B. financial and nonfinancial data.
C. nonfinancial data only.
D. none of these.
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22. After management has set short-term goals, the budgeting process typically starts
with
A. a clearly defined timetable of events.
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B. input only from the accounting personnel.

C. the naming of an efficient coordinator or director.
D. a set of procedures or instructions.
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23. Which type of budgeting utilizes employees at all levels of the company?
A. Group budgeting
B. Selective budgeting
C

C. Target budgeting
D. Participative budgeting
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24. Financial budgets include

A. pro forma statements, a sales budget, and a cost of goods manufactured budget.
B. a budgeted income statement and budgeted balance sheet only.
C. a budgeted income statement, budgeted balance sheet, and cash budget.
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D. pro forma statements, a capital expenditures budget, and a cash budget.

25. Which of the following would most likely be considered a short-term goal?
A. Modernization and expansion of the plant
B. A product line change
C. A unit sales forecast
D. A marketing plan to gain a higher percentage of control of the market in five years

26. J. J. Johnson has decided to supplement his income by selling beehives. He expects
to sell 25,000 hives in 20x1. He ended 20x0 with 2,500 completed hives in inventory and
would like to complete operations in 20x1 with at least 2,800 completed hives in
inventory. There is no ending work in process inventory. One beehive holds about 250
bees. The bees are purchased for P4.00 per 1,000 bees. The hives sell for P15.00 each.
How many beehives would the 20x1 production budget identify as needing to be produced?
A. 25,300
B. 25,000
C. 30,300
D. 24,700

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27. Fantastic Futons manufactures futons. The estimated number of futon sales for the
first three months of 20x1 are as follows:
January 40,000
February 50,000
March 60,000

Finished goods inventory at the end of 20x0 was 12,000 units. On average, 25 percent of
the futons are produced during the month before they are sold, which normally accounts
for the ending balance in finished goods inventory. The planned selling price is P150
per unit.

How many futons are budgeted to be produced in February?

A. 37,500
B. 65,000
C. 52,500
D. 55,000

28. Selling and administrative expenses are billed and paid the month after they occur.
Selling and administrative expenses have both a fixed and a variable component. The
fixed component is a constant P8,000 a month. The variable component equals 5 percent

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of revenues. Given revenues of P300,000 for January, P350,000 for February, and P400,000
for March, what would be the budgeted selling and administrative expenses that would be
paid in March?
A. P8,000
B. P16,500 i
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C. P25,500
D. P28,000
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29. United Insurance Company specializes in term life insurance contracts. Cash
collection experience shows that 30 percent of billed premiums are collected in the
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month before they are due, 60 percent are collected in the month they are due, and 6
percent are collected in the month following their due date. Four percent of the billed
premiums are collected late (in the second month following their due date). Total billing
notices in January were P50,000; in February, P60,000; in March, P66,000; in April,
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P65,000; in May, P60,000; and in June, P70,000. How much cash does the company expect
to collect in May?
A. P63,540
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B. P66,750
C. P63,360
D. P64,700
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30. Wean Corporation's budgeted balance sheet for the coming year shows total assets of
P5,000,000 and total liabilities of P2,000,000. Common stock and retained earnings make
up the entire stockholders' equity section of the balance sheet. Common stock remains
at its beginning balance of P1,500,000. The projected net income for the year is P366,000.
The company pays no cash dividends. What is the balance of retained earnings at the
beginning of the budget period?
A. P1,034,000
B. P1,134,000
C. P1,866,000
D. P1,500,000

31. Leaverton's forecast of sales is as follows: July, P60,000; August, P90,000;

September, P130,000. Sales are normally 80 percent cash and 20 percent credit in any
month. Credit sales are collected in full in the following month. Merchandise cost
averages 60 percent of sales price. The company desires an inventory as of September 30
of P52,000. The inventory as of June 30 was P25,000.

The July 31 balance of accounts receivable will be

A. P12,000.
B. P48,000.
C. P18,000.
D. P0.

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32. The primary difference between a fixed (static) budget and a flexible budget is that
a fixed budget
A. cannot be changed after the period begins, whereas a flexible budget can be changed
after the period begins.
B. is concerned only with future acquisitions of fixed assets, whereas a flexible budget
is concerned with expenses that vary with sales.
C. is a plan for a single level of production, whereas a flexible budget is several
plans (one for each of several production levels).
D. includes only fixed costs, whereas a flexible budget includes only variable costs.

33. A standard costing system

A. is not typically used by management for cost planning and cost control purposes.
B. is a system in which all costs affecting the three inventory accounts and the Cost
of Goods Sold account are stated in terms of actual costs incurred.
C. depends on actual costs rather than planned costs.
D. is employed with an existing job order costing or process costing system and is not
a full cost accounting system in itself.

34. In standard costing,

A. the standards are developed only for overhead costs.
B. the standards are developed primarily from past costs.

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C. comparisons with actual costs usually are not performed.
D. debit and credit entries to inventory accounts are made at standard costs.

35. Under which of the following circumstances would the base used to calculate the
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variable overhead rate be the same as that used for the fixed overhead rate?
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A. When actual labor hours are the same as budgeted labor hours
B. When standard indirect labor hours agree with standard direct labor hours
C. In most circumstances; the base used for each calculation is normally the same.
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D. When the number of labor hours expected to be incurred for the period is the same
as normal capacity direct labor hours
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36. Suppose the standard for a given cost during a period was P80,000. The actual cost
for the period was P72,000. Under what circumstances would you consider the variance
from budget to be a positive performance indication?
C

A. The cost is fixed, and actual production was 90 percent of the standard level of
budgeted production.
B. The cost is variable, and the standard cost noted above is the cost at a production
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level lower than the actual production level.

C. The cost is variable, and actual production was 90 percent of the standard level of
production.
D. The cost is variable, and actual production was 75 percent of the standard level of
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production.

37. Using the standard costs of P5 per pound for a 10 pound bag of chocolate and the
following actual cost and usage data, compute the direct materials price variance.
Direct materials purchased 99,000 pounds
Direct materials used 95,000 pounds
Price paid for direct materials P4.00 per pound
Number of good units produced 9,000 units
A. P95,000 (F)
B. P45,000 (U)
C. P54,000 (F)
D. P99,000 (F)

38. Using the labor time standard of 0.5 labor hour per unit and a labor cost standard
of P10 per labor hour for a 10 pound bag of chocolate and the following actual cost
and usage data, compute the direct labor variance.
Direct labor hours used 4,950 hours
Total cost of direct labor P53,460
Number of good units produced 9,000 units
A. P3,960 (F)
B. P8,460 (U)
C. P3,960 (U)
D. P8,460 (F)

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39. Underfoot Products uses standard costing. The following information about overhead
was generated during May:

Standard variable overhead rate P2 per machine hour

Standard fixed overhead rate P1 per machine hour
Actual variable overhead costs P389,000
Actual fixed overhead costs P175,000
Budgeted fixed overhead costs P190,000
Standard machine hours per unit produced 10
Good units produced 18,000
Actual machine hours 200,000

Compute the variable overhead spending variance.

A. P11,000 (F)
B. P11,000 (U)
C. P31,000 (F)
D. P41,000 (F)

40. Point Company uses the standard costing method. The company's main product is a
fine-quality audio speaker that normally takes 0.25 hour to produce. Normal annual
capacity is 3,000 direct labor hours, and budgeted fixed overhead costs for the year

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were P6,750. During the year, the company produced and sold 8,000 units. Actual fixed
overhead costs were P4,800. Compute the fixed overhead volume variance.
A. P300 (F)
B. P300 (U)
C. P1,950 (U) i
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D. P2,250 (U)

41. The use of quantitative tools to gauge an organization's performance in relation

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to a specific goal or an expected outcome is known as

A. responsibility accounting.
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B. an asset turnover.
C. a performance management and evaluation system.
D. a performance measurement.
C

42. A performance management and evaluation system is utilized so that a company can
identify which of the following?
A. How well it is doing and where it is going
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B. How satisfied investors are with their return on investment

C. How satisfied both customers and employees are
D. How well it is doing, where it is going, and what improvements will bring in more
profit
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43. Division Alpha can purchase a required part from an outside supplier at P35.
Division Beta will supply the part at a transfer price of P38.50. Division Alpha's
manager should
A. pay the P38.50 price to Division Beta.
B. tell his immediate supervisor that Division Beta is being unreasonable.
C. negotiate an appropriate transfer price with the manager of Division Beta.
D. buy from the outside supplier.

44. The manager of Center C is responsible for the online order operations of a large
retailer. What type of responsibility center is Center C?
A. Discretionary cost center
B. Profit center
C. Revenue center
D. Investment center

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45. Chow Company has a number of investment centers to track on a day-to-day basis.
The following represent key figures related to one of Chow's investment centers for
May 20xx:
Operating income P 6,000,000
Sales 15,000,000
Asset turnover 55%

What is the investment center's ROI for May 20xx (rounded to two decimal places)?
A. 27.5 percent
B. 33 percent
C. 55 percent
D. 22 percent

46. Determine the February 20xx residual income for an investment center with the
following information:
Operating income for the month ended
February 28, 20xx P2,900,000
Desired ROI 52%
Actual ROI 15.93%
Assets invested P18,200,000

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A. (P4,016,000)
B. (P5,836,000)
C. (P6,564,000)
D. (P8,384,000)
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47. Compute the May 20xx EVA for an investment center with the following information:
Pre-tax operating income for May 20xx P18,000,500
Income tax expense for May 20xx 5,100,000
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Assets at May 31, 20xx 13,200,500

Current liabilities at May 31, 20xx 10,000,000
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Long-term liabilities at May 31, 20xx 3,500,000

Minimum desired rate of return 20%
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A. P12,260,400
B. P12,700,500
C. P11,880,500
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D. P12,200,500

48. A manager can improve EVA by

A. increasing assets and decreasing costs.
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B. increasing sales and assets.

C. increasing cost of capital and assets.
D. decreasing assets and lowering cost of capital.

49. The balanced scorecard links the perspectives of an organization's stakeholders

with the organization's
A. goals and vision, performance goals, strategic plan, and financial resources.
B. mission and overall plan, performance measures, departmental plans, and resources.
C. mission and vision, performance measures, strategic plan, and resources.
D. mission and vision, performance goals, overall plan, and resources.

50. One of the overall goals of the Pancake House Restaurant is customer satisfaction.
In the light of that goal, match the internal business processes perspective with the
appropriate objective.
A. Customer satisfaction means that the chefs engage in culinary continuing education.
B. Customer satisfaction means that customers receive their food within 10 minutes of
placing an order.
C. Customer satisfaction means that the customer appreciation program is successful.
D. Customer satisfaction means that the restaurant is profitable.

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51. Which of the following is an example of a performance measurement?

A. Product quality
B. Number of customer complaints
C. Customer satisfaction
D. Production standards

52. Analysis of nonfinancial data is important to the management accountant because

A. financial data are usually irrelevant.
B. nonfinancial data lend themselves more to computer analysis than do financial data.
C. managers make many decisions based solely on nonfinancial data.
D. nonfinancial data are easier to work with than financial data.

53. Taylor manufactures 12,000 units of a part used in its production to manufacture
guitars. The annual production activities related to this part are as follows:
Direct materials, P24,000
Direct labor, P60,000
Variable overhead, P54,000
Fixed overhead, P84,000

Best Guitars, Inc., has offered to sell 12,000 units of the same part to Taylor
for P22 per unit. If Taylor were to accept the offer, some of the facilities presently

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used to manufacture the part could be rented to a third party at an annual rental of
P18,000. Moreover, P4 per unit of the fixed overhead applied to the part would be
totally eliminated.

In i
the decision to make or buy the part, what is the relevant fixed overhead?
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A. P30,000
B. P54,000
C. P84,000
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D. P48,000
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54. Products Green, Red, and White have unit contribution margins of P6.50, P12, and
P10, respectively, and require 2, 4, and 3 direct labor hours per unit, respectively.
If demand currently is far exceeding supply, on which product should the company
concentrate its efforts?
C

A. Green
B. Red
C. White
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D. Either Green or Red

55. The normal selling price of our product is P42 per unit. The costs of production
are direct materials, P8; direct labor, P6; variable overhead, P7; and fixed overhead,
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P4 (based on normal capacity). The company has received a special order for 10,600
units at a unit sales price of P23. There is ample unused capacity to fill the order
and P1 per unit will be incurred for additional freight costs. If the order is
accepted, operating income will
A. increase by P10,600.
B. decrease by P31,800.
C. increase by P21,200.
D. decrease by P21,200.

56. All of the following are relevant in a sell or process-further decision except
A. sales value at the split-off point.
B. sales value after further processing.
C. additional processing costs.
D. joint costs.

57. An external issue to be considered when setting a price is

A. the variable costs of the product or service.
B. the desired rate of return.
C. the quality of materials and labor.
D. the number of competing products or services.

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58. The pricing method that establishes selling prices based on a specified rate of
return on the assets employed in the operation is
A. target cost pricing.
B. return on assets pricing.
C. time and materials pricing.
D. gross margin pricing.

59. Market research shows potential customers will buy a particular product at a
selling price of P3,100. If the desired profit is 28 percent of target cost, the
company should make the product if the cost does not exceed
A. P3,100.
B. P868.
C. P2,232.
D. P2,422.

60. Otool Inc. is considering using stocks of an old raw material in a special
project. The special project would require all 240 kilograms of the raw material that
are in stock and that originally cost the company P2,112 in total. If the company were
to buy new supplies of this raw material on the open market, it would cost P9.25 per
kilogram. However, the company has no other use for this raw material and would sell
it at the discounted price of P8.35 per kilogram if it were not used in the special

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project. The sale of the raw material would involve delivery to the purchaser at a
total cost of P71 for all 240 kilograms. What is the relevant cost of the 240
kilograms of the raw material when deciding whether to proceed with the special
project?
A. P1,933 i
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B. P2,004
C. P2,220
D. P2,112
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61. Lusk Corporation produces and sells 10,000 units of Product X each month. The
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selling price of Product X is P40 per unit, and variable expenses are P32 per unit. A
study has been made concerning whether Product X should be discontinued. The study
shows that P70,000 of the P120,000 in monthly fixed expenses charged to Product X
would not be avoidable even if the product was discontinued. If Product X is
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discontinued, the annual financial advantage (disadvantage) for the company of

eliminating this product should be:
A. (P30,000)
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B. P30,000
C. P40,000
D. (P40,000)
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62. Landor Appliance Corporation makes and sells electric fans. Each fan regularly
sells for P42. The following cost data per fan is based on a full capacity of 150,000
fans produced each period.
Direct materials P8
Direct labor P9
Manufacturing overhead (70% variable and 30% unavoidable fixed) P10

A special order has been received by Landor for a sale of 25,000 fans to an
overseas customer. The only selling costs that would be incurred on this order would
be P4 per fan for shipping. Landor is now selling 120,000 fans through regular
channels each period. Assume that direct labor is an avoidable cost in this decision.
What should Landor use as a minimum selling price per fan in negotiating a price for
this special order?
A. P28 per fan
B. P27 per fan
C. P31 per fan
D. P24 per fan

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63. Danny Dolittle makes crafts in his spare time and always sells everything he makes
at local craft shows. Danny specializes in four products. Because Danny's time is
limited before the next craft show, he is trying to decide how to use his time to the
best advantage. Information related to the four products that Danny produces are shown
below:
Rag Dolls Pot Holders Bread Baskets Finger Puppets
Contribution margin per unit P8 P2 P12 P6
Contribution margin ratio 40% 25% 32% 30%
Time required per unit (in hours) 1.4 0.5 3.5 2.0

Rank the products from the most profitable to the least profitable use of the
constrained resource.
A. Rag Dolls, Pot Holders, Bread Baskets, Finger Puppets
B. Rag Dolls, Bread Baskets, Finger Puppets, Pot Holders
C. Pot Holders, Rag Dolls, Finger Puppets, Bread Baskets
D. Bread Baskets, Rag Dolls, Finger Puppets, Pot Holders

64. Paine Corporation processes sugar beets in batches that it purchases from farmers
for P72 a batch. A batch of sugar beets costs P11 to crush in the company's plant. Two
intermediate products, beet fiber and beet juice, emerge from the crushing process.
The beet fiber can be sold as is for P27 or processed further for P16 to make the end

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product industrial fiber that is sold for P40. The beet juice can be sold as is for
P43 or processed further for P28 to make the end product refined sugar that is sold
for P100. Which of the intermediate products should be processed further?
A. beet fiber should NOT be processed into industrial fiber; beet juice should be
processed into refined sugar i
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B. beet fiber should NOT be processed into industrial fiber; beet juice should NOT be
processed into refined sugar
C. beet fiber should be processed into industrial fiber; beet juice should NOT be
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processed into refined sugar

D. beet fiber should be processed into industrial fiber; beet juice should be
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processed into refined sugar

65. One reason that a common-size statement is a useful tool in financial performance
evaluation is that it enables the user to
C

A. make better comparisons of two companies of different sizes in the same industry.
B. determine which companies in a single industry are of the same size.
C. judge the relative potential of two companies of similar size in different
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industries.
D. determine which companies in a single industry are of the same value.

66. Horizontal analysis of comparative financial statements includes the

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A. development of common-size statements.

B. calculation of peso amount changes and percentage changes from the previous to the
current year.
C. calculation of the percentage of net sales for each item listed.
D. calculation of liquidity ratios.

67. Stimac Corporation has total cash of P210,000, no marketable securities, total
current receivables of P281,000, total inventory of P151,000, total prepaid expenses
of P53,000, total current assets of P695,000, total current liabilities of P261,000,
total stockholders' equity of P1,014,000, total assets of P1,415,000, and total
liabilities of P401,000. The company's acid-test (quick) ratio is closest to:
A. 2.08
B. 1.73
C. 2.66
D. 1.88

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68. Wittels Corporation has provided the following data:

Year 2 Year 1
Total assets P1,253,000 P1,230,000
Total liabilities P586,000 P570,000
Total stockholders' equity P667,000 P660,000

In Year 2, the company's net operating income was P42,571, its net income before taxes
was P21,571, and its net income was P15,100. The company's equity multiplier is
closest to:
A. 1.14
B. 0.53
C. 0.88
D. 1.87

69. Braverman Corporation's net income last year was P75,000 and its interest expense
was P10,000. Total assets at the beginning of the year were P650,000 and total assets
at the end of the year were P610,000. The corporation's income tax rate was 30%. The
corporation's return on total assets for the year was closest to:
A. 13.5%
B. 12.4%
C. 13.0%

ew
D. 11.9%

70. Weightman Corporation's net operating income in Year 2 was P76,385, net income
before taxes was P55,385, and the net income was P36,000. Total common stock was
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P200,000 at the end of both Year 2 and Year 1. The par value of common stock is P4 per
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share. The company's total stockholders' equity at the end of Year 2 amounted to
P983,000 and at the end of Year 1 to P950,000. The market price per share at the end
of Year 2 was P7.92. The company's price-earnings ratio for Year 2 is closest to:
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(Round your intermediate calculations to 2 decimal places.)

A. 7.14
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B. 0.58
C. 5.18
D. 11.00
C

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