Exact2Pass
Refer to the exhibit.
RS operates a standard absorption costing system. The following data is available for the month of March.
The sales budget for the month of March was for 3,000 units to be sold giving sales revenue of $40,000.
The actual sales volume is
Refer to the exhibit.
A machine costing $47,000 will generate the following accounting profits:
The annual charge for depreciation is $9,000.
The cost of capital is 12%.
The net present value of the investment in the machine is:
Refer to the exhibit.
A company issued its production budget based on an anticipated output of 800 units. Actual output was 1000 units. The details of the costs are shown below:
The budget volume variance was:
Xter Ltd produces product 'PZ'. The forecast sales for the forthcoming year are 50,000 units.
It is anticipated that there will be 10,000 units of opening inventory at the beginning of the year. However, management wishes to reduce this inventory by 30% by the end of next year.
The production budget for the forthcoming year will be
LC produces a household detergent in a single process. Information for this process for last month is as follows:
(a) Materials input - 11,000 Litres at £2.00 per litre.
(b) Conversion costs - £23,000
(c) Output during the month - 8,000 litres.
(d) There were 2,000 units of closing work in progress which was complete as to materials and 35% complete as to conversion.
(e) Normal loss for the month was 5% of input and all losses have a scrap value of 50p per litre.
(f) There was no opening work in progress.
What was the value of the abnormal loss/gain during the month (to the nearest £)?
The records of a manufacturing company show the following relationship between total cost and output.
The budgeted output for Period 3 is 27,000 units. Assume that previous cost behaviour patterns will continue.
What is the total budgeted cost for Period 3?
Give your answer in the nearest whole number.
A company uses an integrated accounting system. The following data relate to the latest period.
At the end of the period, the entry in the production overhead control account in respect of under or over absorbed overheads will be:
The following is an extract from a budgetary control report for the latest period:
The budget variance for prime cost is:
Refer to the exhibit.
The following data relates to Department A within a business unit.
The overhead absorption rate per direct labour hour for Department A is:
Give your answer to 2 decimal places.
Refer to the Exhibit.
AM Ltd. makes and sells a single product for which the standard cost information is as follows:
What is the variable overhead expenditure variance?
A product sells for £10 per unit and has an annual break-even volume of 50,000 units. The annual fixed costs are £100,000.
The variable cost per unit is:
Give your answer to 2 decimal places.
A company currently allows a discount of 20% to customers who pay at the time of purchase. If 30% of customers pay immediately, the extra sales needed in July to increase the cash receipts in that month by £6,000 are:
A company operates a full cost system of pricing. Production overheads are absorbed using a pre-determined absorption rate of £3.50 per machine hour. The direct production cost of product A is £15 per unit and it utilises 6 machine hours per unit. The mark-up for non-production costs is 10% of total production cost. The company applies a 25% mark-up on total cost for all products.
The required selling price for Product A, to two decimal places, is:
A company operates an absorption costing system. Overheads are absorbed using a pre-determined absorption rate using labour hours. In the period actual labour hours were 10,600, 400 hours below budget. Actual overheads for the period were £234,680 and there was an under-absorption of overheads of £1,480.
What was the budgeted level of overheads?
Refer to the exhibit.
The budgeted contribution for last month was $53,600. The variances reported were as follows:
The actual contribution for last month was:
Refer to the exhibit.
The following data are available for last period for the x-ray department of a local hospital:
The x-ray department cost per patient for last period was (to the nearest $0.01) is:
In order to provide information that is suitable for control purposes, the budget must be:
A company operates a full cost system of pricing. Production overheads are absorbed using a pre-determined absorption rate of £3.50 per machine hour. The direct production cost of product A is £15 per unit and it utilises 6 machine hours per unit. The mark-up for non-production costs is 10% of total production cost. The company wants to make a 25% return on sales revenue for all products.
The required selling price for Product A, to two decimal places, is:
Refer to the exhibit.
C Ltd manufactures three products, which require the same type of materials. The following contribution and profit per unit is available:
In a period in which labour hours are in short supply, which of the following options is the rank order of production?
The net present value (NPV) of an investment is as follows.
NPV at 14% = $6,320
NPV at 18% = ($4,600) negative
The internal rate of return (IRR) of the investment is closest to
Refer to the exhibit.
Budget information for 'Crome Ltd' is as follows:
The budgeted cost allowance for the sale of 1000 units would be:
Which of the following statements is correct?
i. sector bodies use budgetary planning and control systems
ii. costing cannot be used by public sector bodies because they have no measurable output
iii. in public sector bodies tend to focus on cost management therefore they have no need for non-financial information
A company uses an integrated accounting system and absorbs production overhead using a predetermined rate of $6 per machine hour.
Last period a total of 25,500 machine hours were worked and the actual production overhead incurred was $158,000.
The accounting entries for the absorption of production overhead for the period would be:
Refer to the Exhibit.
PD manufactures a product in a process operation. Normal loss is 5% of input and occurs at the end of the process. The following data is available for the month of August:
Scrapped units have no value.
There was no opening or closing work in progress for August.
What is the value of the abnormal gain in August?
A company currently allows a discount of 10% to customers who pay at the time of purchase. If 20% of customers pay immediately, the extra sales needed in July to increase the cash receipts in that month by £9,000 are:
Refer to the exhibit.
SP, a manufacturing company, uses a standard costing system. The standard variable production overhead cost is based on the following budgeted figures for the year:
During the month of September, 5,300 actual hours were worked and 5,600 standard hours of output were produced. Total variable production overhead costs in September were $8,600.
What was the total variable production overhead variance in September?
You are put in charge of a new, independent factory. The products you produce are cheap to produce but the profit margin is small. Maintaining low costs and maximum efficiency is key.
You are concerned that certain parts of the production line are producing excess waste and damaging profits.
Which type of cost centre would be most useful in this situation?
Refer to the exhibit.
Which type of cost do the following figures represent?
Refer to the exhibit.
A manufacturing company makes a product called 'Delta'. Each unit of product 'Delta' uses 4 kgs of raw material. Data for next month's budget for product Delta is as follows:
How many units of product 'Delta' should be produced in the month?
Refer to the exhibit.
The following extracts are taken from a company’s budgetary planning papers, showing the budgeted costs to be incurred at two activity levels:
Direct material is a wholly variable cost.
Direct labour is a semi-variable cost.
Production overhead is a step cost, with a single step at an output of 450 units.
The total budget cost allowance for an output of 480 units is:
An increase in variable costs per unit, where selling price and fixed costs remain constant, will result in which of the following:
A company budgeted £100,000 for labour.
However, feedback indicates that due to the need for overtime, the actual figure is more likely to be £120,000.
What type of feedback is this an example of?
Select the correct answer from the choices below:
Refer to the exhibit.
The standard labour cost per unit of product 'B' is $24 (6 hours @ $4 per hour).
During period 5 the following details were recorded:
The output during period 5 was
In which industries would idle time not be expected? (Select ALL that apply.)
How does Beyond budgeting help to resolve the weaknesses of traditional budgeting? (Select ALL that apply.)
Refer to the exhibit.
The following costs apply to batch 325, which consists of 10000 units of identical products:
The company charges selling and administration costs at a rate of 20% of production costs and wishes to achieve a profit margin of 20% of sales.
What is the required selling price per unit of product?
Give your answer to 2 decimal places.
A company’s management accountant wishes to calculate the present value of the cost of renting a delivery vehicle. There will be five annual rental payments of $5,000, the first of which is due immediately. The company’s discount rate is 12%.
Which TWO of the following are valid ways to calculate the present value of the rental payments? (Choose two.)
Which of the following statements relating to risk and uncertainty is correct?
The International Federation of Accountants (IFAC) stated that it was important that “accountants in business” should understand what the drivers of stakeholder value are. Which of the following statements is valid?
Which of the following would NOT require taking into account the time value of money?
A company that uses standard costing wishes to reconcile the difference between the profit for a period calculated using absorption costing with that calculated using marginal costing.
Which TWO of the following will NOT help with this reconciliation? (Choose two.)
A company which manufactures and sells one product has fixed costs of $80,000 per period. The selling price per unit of $25 generates a contribution/sales ratio of 40%.
How many units would need to be sold in a period to earn a profit of $10,000?
Which TWO of the following are characteristics of Management Accounts? (Choose two.)
A company is considering investing $57,000 in a machine that will last for five years, after which time it will have no value. The machine will generate additional revenue of $190,000 each year. Annual running costs, including depreciation of $11,400 will amount to $168,400.
Assuming that all cash flows occur evenly, the payback period of the investment in the machine is closest to:
A company has three production departments X, Y and Z, and one service department.
The service department’s overhead has been apportioned to the production departments in the ratio 3:2:5. As a result of this apportionment, $2,070 was given to Department Y.
What is the amount of service department overhead that would have been apportioned to Department Z? Give your answer to the nearest dollar.
The forecast costs per unit for a new product are as follows:
The company uses marginal cost plus pricing and all products are required to achieve a 40% margin.
What would be the selling price per unit?
Based upon extensive historical evidence, a company’s daily sales volume is known to be normally distributed with a mean of 1,728 units and a standard deviation of 273 units.
What is the probability that, on any one day, the sales volume will be at least 1,300 units?
A new product requires an investment of $200,000 in machinery and working capital. The total sales volume over the product’s life will be 5,000 units. The forecast costs per unit throughout the product’s life are as follows:
The product is required to earn a return on investment of 35%.
What unit selling price needs to be achieved?
A company has spent $5,000 on a report into the viability of using a subcontractor. The report highlighted the following:
A machine purchased six years ago for $30,000 would become surplus to requirements. It has a written-down value of $10,000 but would be resold for $12,000.
A machine operator would be made redundant and would receive a redundancy payment of $40,000.
The administration of the subcontractor arrangement would cost the company $25,000 each year.
Which THREE of the following are relevant for the decision? (Choose three.)