Refer to the exhibit.

WS operates an integrated accounting system. Transactions relating to production overheads for the month of May were as follows:

Indirect Material costs were $15,000

Indirect Labour Costs were $45,000

Production overheads of $58,000 were incurred during the period.

Depreciation of factory machinery amounted to $32,000.

Overheads costs absorbed by production using a standard absorption rate was $164,000 for the period.

What are the correct entries to record the absorption of production overheads for the period?

The correct set of entries to record the absorption of production overheads for the period is:

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:

The following costs are incurred by a company which owns a five star hotel. Which THREE of the items would normally be classified as variable costs?

Which ONE of the following would be the LEAST effective performance indicator for a distribution manager who is responsible for controlling the cost of the transport fleet?

Refer to the exhibit.

A company is considering purchasing a machine that will have a useful life of three years after which time it will be sold. Relevant cash flows relating to the purchase and operation of the machine are as follows.

The annual cost of capital is 14%.

The net present value of the investment in the machine is, to the nearest whole $:

Within a relevant range of output, the variable cost per unit of output will:

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 company uses full cost pricing. The unit costs for product Z are given below.

What price per unit should be charged in order to achieve a profit margin of 20%?

Give your answer to the nearest cent.

Which THREE of the following are included in the Global Management Accounting Principles? (Choose three.)

Which of the following statements about batch costing is true?

A project is about to be launched. Two of the three possible outcomes and their associated probabilities are as follows:

The remaining possible outcome is a $70,000 gain.

What is the correct calculation of the expected value of the project?

Which of the following is a relevant cost?

The budget and actual cost statements for the production department for the latest period were as follows.

Notes.

The 10% increase in production was required to meet unexpected additional sales demand.

The production manager is responsible for negotiating the price of materials with suppliers.

The normal working time is 900 hours per period. Any overtime worked above these 900 hours is paid at a premium of 50%.

In preparing the flexible budget for the latest period, which TWO of the following statements are correct? (Choose two.)

The concept of the time value of money:

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?

The year-to-date results at the end of month 9 included sales revenue of $3,600,000 and variable costs of $2,100,000.

During month 10, sales revenue was $450,000 and variable costs were $270,000.

What year-to-date contribution to sales ratio (C/S ratio) would be reported at the end of month 10?

A company manufactures three products using the same direct labour which will be in short supply next month. No inventories are held. Data for the three products are as follows:

The fixed costs are all committed costs and cannot now be altered for the next month.

Place the labels against the correct product to indicate the order of priority for manufacture that will maximise the profit for the next month.

The following data relate to the latest period.

A statement is to be prepared that reconciles the difference between the flexible budget profit and the actual profit.

Which TWO of the following will appear on this statement? (Choose two.)

A confectionery manufacturer is considering adding a new product to the current range. Forecast data for the product are as follows.

Incremental fixed costs attributable to the new product are forecast to be $24,000 each period.

The forecast sales volume of 180 units is insufficient to achieve the target profit of $10,000 each period.

Which of the following statements is correct?

A company makes and sells a range of products. The standard details per unit for one of these products, product X, are as follows.

To meet sales demand, the company must obtain 2,000 units of product X next month. There is sufficient labour capacity to produce 1,500 of these units in-house during normal time. However, any production above this level would require overtime working which would be paid at a premium of 50%.

The company can buy as many units of product X as it wishes next month from an external supplier at a price of $120 per unit.

What is the total financial benefit to the company of purchasing the appropriate number of units from the external supplier rather than producing them in-house?

Which of the following is a valid definition of a cash budget?

Which of the following statements regarding variances is valid?

The possible returns and associated probabilities of two independent projects are as follows:

It has been decided that both projects are to be launched.

Which TWO of the following statements are correct? (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:

Which type of budget would be the most suitable for a cash budget?

Which of the following would NOT be an appropriate performance measure for a profit centre manager?

Refer to the exhibit.

The following data relate to two activity levels of an enquiry-handling centre:

The amount of fixed overheads is:

If fixed costs are increased, the gradient of the line plotted on a profit/volume (PV) graph will be:

An increase in variable costs per unit, where selling price and fixed costs remain constant, will result in which of the following:

Refer to the exhibit.

In this profit/volume graph, which distance indicates the contribution earned at level of activity L?

Distance a

Distance b

Distance c

Distance d

Why is it important to have a professional body such as CIMA in management accounting?

The standard labour hours for all products manufactured by a company include an allowance for idle time. Idle time is budgeted to be 5% of total hours worked. Each unit of product G requires an input of 9.5 active labour hours. The labour rate is $12 per hour.

The standard labour cost shown on the standard cost card for one unit of product G will be

A cash budget is an example of a:

Overhead apportionment is best described as:

Refer to the exhibit.

A company manufactures three components on the same machine, on which there is spare capacity. An external supplier has offered to supply all of the company's requirements of the components. Data for the components are as follows:

Which components should be purchased from the external supplier?

Refer to the exhibit.

A company has the following budget information for next year:

The budgeted profit for the year is

Which THREE of the following cost items would normally be classified as fixed costs?

Refer to the exhibit.

The following conventional breakeven chart has been drawn for a product. Forecast sales volume for next period is V units.

Which ONE of the following distances on the graph indicates the forecast profit for next period?

Refer to the exhibit.

A company budgeted to provide 700 units of service last period for a budgeted variable overhead cost of $29,400. During the period a total of 790 units of service were provided and the variable overhead cost incurred was $29,660.

For effective control of variable overhead cost which two figures should be compared in the budgetary control statement?

When compiling profit statement using a marginal costing system we must calculate the contribution. Once we have the contribution, we must deduct a specific amount to calculate the profit. Which of these values

should we NOT deduct? (Select ALL that apply.)

Refer to the exhibit.

The budget for product Sentra for the month of August is given below:

Each unit of Sentra requires 4kg of raw materials.

The raw materials usage budget for the month of August is:

Overhead absorption is best described as:

Two rival furniture manufacturers have recently merged together. Before the merge each party had three outlets and one factory each. Now they have two factories, six stores with another 3 planned in the next year.

Previously, one company had operated with function cost centres, looking at costs incurred by each department whilst the other had chosen to look at costs per activity.

Whilst the companies were small this worked and costs were easy to manage and issues could be dealt with quickly and efficiently. Since then costs have gone out of control as the old systems no longer work for this

large, nationwide company.

What is a suitable type of cost centre to use now?

Refer to the exhibit.

JB Limited pays 60% of invoices for goods purchased on credit, in the month after purchase. The remaining 40% are paid a month later.

Invoices are received on the last day of each month. Invoices paid in the month following purchase attract a prompt payment discount of 2%, whilst those paid in the second month attract only a 1% discount.

Credit purchases for April to June are budgeted as follows:

The amount budgeted to be paid for credit purchases in June is:

Refer to the exhibit.

A company manufactures a single product, and relevant data is as follows:

Note. Overheads are assumed to be related to direct labour hours.

The actual results for the period were as follows:

What is the variable overhead expenditure variance?

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

PQR Manufacturing Ltd. has £3,000,000 of fixed costs for the forthcoming period. The company produces a single product 'X', which has a selling price of £75 per unit and total cost of £50.

75% of the total cost represents variable costs.

What are the break-even units?

A company operates an absorption costing system. Overheads are absorbed using a pre-determined absorption rate using labour hours.

Actual labour hours were 10% below budget for the period and overheads incurred were 10% above budget for the period. This would result in:

Refer to the Exhibit.

The following forecast cash flows relate to a proposed investment in new delivery vehicles at a total cost of $75,000.

The internal rate of return (IRR) of the proposed investment is (to two decimal places)

The production manager of your company has asked you to explain the methods of overhead analysis used, in particular the meaning of reciprocal servicing.

Reciprocal servicing is:

Within a relevant range of output, the fixed cost per unit of a product will:

Eton Ltd. operates a manufacturing process that produces product A. Information for this process last month is as follows:

(a) Opening work in progress - 2,500 kg valued at £2,000 for direct material and £1,500 for labour and overheads.

(b) Materials input - 25,000 kg at £2.10 per kg.

(c) Labour - £10,000

(d) Overheads - £5,000

(e) Output during the month - 20,000 kg.

(f) There were 7,500 units of closing work in progress which was complete as to materials and 30% complete as to conversion.

(g) Normal loss for the month was 3% of input and all losses have a scrap value of £1 per kg.

What was the average cost per kg of finished output during the month?

The standard labour cost for 1 component is $15.00 (5 hours at $3 per hour). Last month, 6,000 hours were worked at a cost of $17,000 to produce 1,100 components. The labour efficiency variance was:

FL uses an absorption costing system. The overhead absorption rate for production overheads is $8.60 per direct labour hour.

Budgeted production overhead costs for the year were $473,000 and actual costs incurred were $468,000. 56,000 labour hours were used.

Which ONE of the following statements is correct?

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?

GB Limited operates a standard costing system. During the month 18,500 labour hours were worked at a standard cost of $6 per hour. The labour efficiency variance was $8,700 favourable.

How many standard hours were produced?

Refer to the Exhibit.

The following budgetary information is available for a department in a manufacturing company:

The production overhead absorption rate percentage, when the percentage on prime cost is used, is: