Cma Practice Essay Type Questions Variable Absorption and Thorough Costing

7/23/2019 Cma Practice Essay Type Questions Variable Absorption and Thorough Costing

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CMA PRACTICE ESSAY TYPE QUESTIONS VARIABLE ABSORPTION ANDTHOROUGH COSTING

Q1 For 20x4, Ni!o"#, I$% !&' #&"(# o) *+,000 $i-# &$' .ro'-io$ o) 100,000 $i-#% O-!(r

i$)or/&-io$ )or -!( (&r i$"'('

Dir(- /&$)&-ri$ "&3or 15*,+00 V&ri&3"( /&$)&-ri$ o6(r!(&' 100,000 Dir(- /&-(ri&"# 1+0,000 V&ri&3"( #(""i$ (x.($#(# 100,000 Fix(' &'/i$i#-r&-i6( (x.($#(# 100,000 Fix(' /&$)&-ri$ o6(r!(&' 200,000

T!(r( 7 $o 3(i$$i$ i$6($-or%

R(8ir('

&% Co/.-( -!( ($'i$ )i$i#!(' oo'# i$6($-or $'(r 3o-! &3#or.-io$ &$' 6&ri&3"( o#-i$%3% Co/.-( -!( o#- o) oo'# #o"' $'(r 3o-! &3#or.-io$ &$' 6&ri&3"( o#-i$%

A$#7(r

&% A3#or.-io$ V&ri&3"( Dir(- /&-(ri&"# 1+0,000 1+0,000 Dir(- /&$)&-ri$ "&3or 15*,+00 15*,+00 V&ri&3"( /&$)&-ri$ o6(r!(&' 100,000 100,000

Fix(' /&$)&-ri$ o6(r!(&' 200,000 0 To-&" 9:*,+00 4:*,+00

U$i- o#-# 9:*,+00;100,000 $i-# 9%:*+ 4:*,+00;100,000 $i-# 4%:*+

E$'i$ i$6($-or 2+,000 $i-# x 9%:*+ 1+


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Q2 % Br#-(r Co/.&$ #(""# i-# .ro'-# )or 99 (&!% T!( rr($- .ro'-io$ "(6(" i# 2+,000 $i-#,&"-!o! o$" 20,000 $i-# &r( &$-ii.&-(' -o 3( #o"'%

U$i- /&$)&-ri$ o#-# &r( Dir(- /&-(ri&"# 12%00

Dir(- /&$)&-ri$ "&3or 15%00 V&ri&3"( /&$)&-ri$ o#-# 20,000 x 9? 120,000 Fix(' 90,000 150,000

O.(r&-i$ i$o/( 219,000

@ 12%00 15%00 150,000;2+,000? 49%20

3% Variable-costing income statement

S&"(# >20,000 x 99? 1,:20,000 V&ri&3"( o#-# Co#- o) oo'# #o"' >20,000 x :20,000 x 9? 120,000


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Difficulty 2 Objective 2


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Q: % Ir("&$' Cor.or&-io$ ."&$$(' -o 3( i$ o.(r&-io$ )or -!r(( (&r#%

Dri$ -!( )ir#- (&r, 20x1, i- !&' $o #&"(# 3- i$rr(' 120,000 i$ 6&ri&3"( /&$)&-ri$

(x.($#(# &$' 40,000 i$ )ix(' /&$)&-ri$ (x.($#(#%

I$ 20x2, i- #o"' !&") o) -!( )i$i#!(' oo'# i$6($-or )ro/ 20x1 )or 100,000 3- i- !&' $o

/&$)&-ri$ o#-#% I$ 20x:, i- #o"' -!( r(/&i$'(r o) -!( i$6($-or )or 120,000, !&' $o /&$)&-ri$ (x.($#(# &$'

7($- o- o) 3#i$(##%

M&r=(-i$ &$' &'/i$i#-r&-i6( (x.($#(# 7(r( )ix(' &$' -o-&"(' 20,000 (&! (&r%

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&% Pr(.&r( &$ i$o/( #-&-(/($- )or (&! (&r #i$ &3#or.-io$ o#-i$% 3% Pr(.&r( &$ i$o/( #-&-(/($- )or (&! (&r #i$ 6&ri&3"( o#-i$%

A$#7(r

&% Absorption-costing income statements 20x1 20x2 20x: S&"(# 0 100,000 120,000 Co#- o) oo'# #o"' 0 50,000 50,000

Gro## /&ri$ 0 20,000 40,000 M&r=(-i$ &$' &'/i$i#-r&-i6( 20,000 20,000 20,000

O.(r&-i$ i$o/( >20,000? 0 20,000

3% Variable-costing income statements 20x1 20x2 20x: S&"(# 0 100,000 120,000 V&ri&3"( (x.($#(# 0 90,000 90,000

Co$-ri3-io$ /&ri$ 0 40,000 90,000

Fix(' (x.($#(# M&$)&-ri$ 40,000 0 0 M&r=(-i$ &$' &'/i$i#-r&-i6( 20,000 20,000 20,000

To-&" )ix(' 90,000 20,000 20,000

O.(r&-i$ i$o/( >90,000? 20,000 40,000

Difficulty : Objective 2


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Q4 % &r6i# Go") Co/.&$ #(""# & #.(i&" .--(r )or 20 (&!% I$ M&r!, i- #o"' 25,000 .--(r# 7!i"(/&$)&-ri$ :0,000% T!(r( 7 $o 3(i$$i$ i$6($-or o$ M&r! 1% Pro'-io$ i$)or/&-io$)or M&r! 7

Dir(- /&$)&-ri$ "&3or .(r $i- 1+ /i$-(#

Fix(' #(""i$ &$' &'/i$i#-r&-i6( o#-# 40,000 Fix(' /&$)&-ri$ o6(r!(&' 1:2,000 Dir(- /&-(ri&"# o#- .(r $i- 2 Dir(- /&$)&-ri$ "&3or .(r !or 24 V&ri&3"( /&$)&-ri$ o6(r!(&' .(r $i- 4 V&ri&3"( #(""i$ (x.($#(# .(r $i- 2

R(8ir('

&% Co/.-( -!( o#- .(r $i- $'(r 3o-! &3#or.-io$ &$' 6&ri&3"( o#-i$% 3% Co/.-( -!( ($'i$ i$6($-ori(# $'(r 3o-! &3#or.-io$ &$' 6&ri&3"( o#-i$%

% Co/.-( o.(r&-i$ i$o/( $'(r 3o-! &3#or.-io$ &$' 6&ri&3"( o#-i$%

A$#7(r

&% A3#or.-io$ V&ri&3"( Dir(- /&$)&-ri$ "&3or >24;4? 9%00 9%00 Dir(- /&-(ri&"# 2%00 2%00 V&ri&3"( /&$)&-ri$ o6(r!(&' 4%00 4%00 Fix(' /&$)&-ri$ o6(r!(&' >1:2,000;:0,000? 4%40 0

To-&" o#- .(r $i- 19%40 12%00

3% A3#or.-io$ V&ri&3"( B(i$$i$ i$6($-or 0 0

Co#- o) oo'# /&$)&-r(' :0,000 x 19%40 4


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A$#7(r % Absorption-costing income statement

S&"(# >25,000 x 20? +90,000 Co#- o) oo'# #o"' >25,000 x 19%40? 4+25,000 x 20? +90,000 V&ri&3"( COGS >25,000 x 12? ::9,000 V&ri&3"( #(""i$ (x.($#(# >25,000 x 2? +9,000 :


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Q+ % o!$#o$ R(&"- 3o!- & 2,000&r( i#"&$' )or 10,000,000 &$' 'i6i'(' i- i$-o 200 (8&" #i("o-#%

A# -!( "o-# &r( #o"', -!( &r( "(&r(' &- &$ &6(r&( o#- o) +,000% S-or/ 'r&i$# &$' 'ri6(7 &r( i$#-&""(' &- &$ &6(r&( o#- o) 5,000 .(r #i-(% S&"(# o//i##io$# &r( 10 o) #(""i$ .ri(% A'/i$i#-r&-i6( o#-# &r( 5+0,000 .(r (&r% T!( &6(r&( #(""i$ .ri( 7 190,000 .(r "o- 'ri$ 20x2 7!($ +0 "o-# 7(r( #o"'%

Dri$ 20x:, -!( o/.&$ 3o!- &$o-!(r 2,000&r( i#"&$' &$' '(6("o.(' i- (x&-" -!( #&/(7&% Lo- #&"(# i$ 20x: -o-&"(' :00 7i-! &$ &6(r&( #(""i$ .ri( o) 190,000% A"" o#-# 7(r( -!(#&/( i$ 20x2%

R(8ir('

Pr(.&r( i$o/( #-&-(/($-# )or 3o-! (&r# #i$ 3o-! &3#or.-io$ &$' 6&ri&3"( o#-i$ /(-!o'#%

A$#7(r Co#- .(r #i-( A3#or.-io$ V&ri&3"( L&$' o#- 10,000,000;200 #i-(# +0,000 0 C"(&ri$ o#-# +,000 +,000 I/.ro6(/($-# 5,000 5,000

To-&" 9:,000 1:,000

Absorption-costing income statements 20x2 20x: S&"(# 5,000,000 45,000,000 Co#- o) oo'# #o"' +0 x >+0,000 5,000 +,000? :,1+0,000 :00 x >+0,000 5,000 +,000? 15,


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Fix(' (x.($#(# L&$' 10,000,000 10,000,000 A'/i$i#-r&-i6( 5+0,000 5+0,000 O.(r&-i$ i$o/( >4,:00,000? 25,4+0,000

Difficulty : Objective 2


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Q9 % M(r(' Co/.&$ .r(.&r(' -!( )o""o7i$ &3#or.-io$o#-i$ i$o/( #-&-(/($- )or -!( (&r($'(' M& :1, 20x4%r(6i#(

S&"(# >19,000 $i-#? :20,000 Co#- o) oo'# #o"' 219,000

Gro## /&ri$ 104,000 S(""i$ &$' &'/i$i#-r&-i6( (x.($#(# 49,000 O.(r&-i$ i$o/( +5,000

A''i-io$&" i$)or/&-io$ )o""o7#

S(""i$ &$' &'/i$i#-r&-i6( (x.($#(# i$"'( 1%+0 o) 6&ri&3"( o#- .(r $i- #o"'% T!(r( 7 $o3(i$$i$ i$6($-or, &$' 1*,+00 $i-# 7(r( .ro'('% V&ri&3"( /&$)&-ri$ o#-# 7(r( 11.(r $i-% A-&" )ix(' o#-# 7(r( (8&" -o 3'(-(' )ix(' o#-#%

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Pr(.&r( & 6&ri&3"(o#-i$ i$o/( #-&-(/($- )or -!( #&/( .(rio'%

A$#7(r

S&"(# :20,000 V&ri&3"( (x.($#(# M&$)&-ri$ o#- o) oo'# #o"'1 1*9,000 S(""i$ &$' &'/i$i#-r&-i6(2 24,000 200,000 Co$-ri3-io$ /&ri$ 120,000 Fix(' (x.($#(# Fix(' )&-or o6(r!(&': 4:,*+0 Fix(' #(""i$ &$' &'/i$i#-r&-i6(4 22,000 9+,*+0 O.(r&-i$ i$o/( +4,2+0

1 19,000 $i-# x 11 1*9,000 2 19,000 $i-# x 1%+0 24,000 : >219,000;19,000 $i-#? 11 x 1*,+00 $i-# 4:,*+0 4 49,000 24,000 22,000

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Cma Practice Essay Type Questions Variable Absorption and Thorough Costing