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Assessment DetailCandidate Barre Arale Mohamud

Assessment Name Management Accounting MOCK EXAM

Assessment Date 20 November 2016

Assessment End 19:02 GMT

Test Duration 46 minutes (120 minutes max)

Result Pass

Score 98.3%

Powered by Calibrand Page 1 of 40

Question 1/60

Text Which form of accounting relates to the financial control procedures reflecting thedelegation of financial authority?

You answered C

Responsibility accounting

The correct answer was This was the correct answer

The incorrect answerswere

A

Management accounting

B

Procedural accounting

D

Financial accounting

Marks for this Question 1

Question 2/60

Text A production department’s accommodation costs comprise of three items: £10 000 permonth for rent, £500 per month for cleaning and maintenance and electricity costs of£1 per unit of production. What is the overall cost behaviour for the department’saccommodation costs?

You answered C

Semi-variable cost



A

Variable cost

B

Marginal cost

D

Semi-fixed cost



Question 3/60

Text Summarised information taken from an external source that covers a long time frameis most likely to be required for decisions at which management level?

You answered C

Strategic



A

Operational

B

Tactical

D

Any level


Question 4/60

Text A company currently makes a component in-house at a cost of £18, A contractor hasoffered to supply the component for £21. The company calculates that it would save£1 000 a month in fixed costs if it discontinued in-house production. The companyrequires 3 000 units a year. What would be the saving or additional cost of buying thecomponent externally rather than making it in-house?

You answered C

£3 000 saving



A

£6 000 additional cost

B


D




Question 5/60

Text A company manufactures bicycles. The budgeted output is 100 bicycles during eachaccounting period. The standard cost of each bicycle includes the following: • Materials: £50 (5kg of steel at £10 per kg)The following information is available for a particular accounting period: • 120 bicycles were made. • 660kg of steel was bought at a total cost of £7 260What are the materials price and usage variances?

You answered A

Materials price £660 adverse; Materials usage £600 adverse.



B


C


D

Materials price £660 adverse; Materials usage £1 600 adverse.


Question 6/60

Text Which of the following IS a reason why traditional systems of absorption costing areoften considered inadequate today?

You answered D

Absorption costing is designed to account for situations where most of the costs arerelated to direct labour and materials.



A

Absorption costing is designed to account for a wide range of products.

B

Absorption costing is designed to account for situations where there are a highproportion of non-volume related overheads.

C

Absorption costing focuses on calculating the costs of the activities and processes ofan organisation rather than the functions and departments.



Question 7/60

Text A company is preparing a materials purchases budget. It has a single product: ProductX – of which it intends to produce 2 000 units in month one and 2 500 units in monthtwo. Each unit of Product X requires 5kg of materials. Materials will cost £10 per kg inmonth one and £12 per kg in month two. The company has an inventory of 500kg atthe beginning of month one which it intends to increase to 1 000kg at the end of monthone and month two.What would be the budget for materials purchases in months one and two?

You answered B

£105 000 in month one and £150 000 in month two.



A


C


D



Question 8/60

Text A company is considering a request from a customer for a bespoke job at a specialprice.The job would require 1 000 units of material A and 500 units of material B. Thecompany has none of material A in stock and would have to purchase it at a cost of £5a unit. 1 000 units of material B are in stock due to over-buying at £4 a unit on aprevious contract. The company does not usually use material B but has received anoffer of £1 a unit from another company.What are the relevant costs of the materials in deciding whether to accept thecontract?

You answered B

£5 500



A

£5 000

C

£7 000

D

£9 000



Question 9/60

Text A company operates a staff incentive payment scheme using the Halsey methodwhere the employee receives 50% of the time saved.The formula is:Bonus = time rate x (time allowed – time taken)/2An employee works at a time rate of £10 per hour and takes six hours to completework for which seven hours is allowed.What bonus would the employee earn?

You answered A

£5



B

£10

C

£20

D

£32



Question 10/60

Text A public library collected the following income from library fines during the year: • April £250 • May £272 • June £285 • July £299 • August £230 • September £272 • October £299 • November £312 • December £155 • January £164 • February £223 • March £299What is the mean average collected in library fines per month?

You answered B

£255



A

£250

C

£272

D

£299



Question 11/60

Text

Above is a scatter diagram showing the relationship between output and costs duringrecent accounting periods. Which classification BEST describes this cost?

You answered A

Fixed



B

Variable

C

Semi-variable

D

Semi-fixed (Stepped)



Question 12/60

Text A company manufactures Product X. The standard materials cost per unit is £15based on using 5 kg of materials at £3 per kilogram. During an accounting period thecompany manufactures 500 units and purchases and uses 2 600 kg of materials at acost of £7 540. What are the materials variances?

You answered A

Price variance £260 favourable. Usage variance £300 adverse.



B

Price variance £250 favourable, Usage variance £290 adverse.

C

Price variance £40 adverse. Usage variance £100 adverse.

D

Price variance £260 favourable. Usage variance £100 adverse.


Question 13/60

Text A company budgets to produce 10 000 units of a product in a period. Fixed productionoverheads are budgeted at £350 000.Actual output achieved in the period is 11 000 units, but actual fixed productionoverheads are £400 000.What was the level of over or under absorption of overheads?

You answered C

£15 000 under absorbed



A


B

£35 000 over absorbed

D




Question 14/60

Text A company adopts standard costing and has calculated the following variances for thelast quarter:

Materials price variance £500 FMaterials usage variance £750 ALabour rate variance £250 FLabour efficiency variance £300 AVariable overhead expenditure £600 AVariable overhead efficiency £200 A

All other variances were nil.If budgeted profit was £10 000, what was the actual profit for this quarter?

You answered A

£8 900



B

£9 100

C

£10 800

D

£11 100



Question 15/60

Text

Above is a breakeven chart.What level of sales revenue will be received at the breakeven point?

You answered C

£20 000



A

Nil

B

£10 000

D

£30 000



Question 16/60

Text A company is producing a cash budget. Credit sales are £4 000 in April, £4 200 in Mayand £4 100 in June. Of the receivables, 40% pay in month of purchase with the restpaying the following month. Depreciation is £500 per month. Purchases are £3 000 inApril, £3 2 00 in May and £3 400 in June with two months credit used.What would be the net cash flow budget for June?

You answered D

£1 160 inflow



A

£200 inflow

B

£660 inflow

C

£700 inflow



Question 17/60

Text A company manufactures three products.The annual output of each product is as follows: • Product A 7 000 • Product B 8 000 • Product C 4 000The following information is available:

Product A Product B Product CSales price £110 £150 £300Direct labour £30 £45 £75Direct materials £20 £30 £40Direct labour hours 2 3 5Machine hours 3 4 5Production runs 20 25 50Orders 30 40 70Material movements 60 80 90

Overheads are as follows:

Cost Machine£560 000 Processing orders£420 000 Materials handling£460 000 Setting up

There are 280 000 machine hours a year.Using activity based costing, what would be the profit per unit for Product B?

You answered B

£19.50



A

£15.50

C

£23.50

D

£27.50



Question 18/60

Text A company has introduced a new product and the time workers took to make it hasbeen recorded. The first unit took 18 minutes and the next 15 units took 73.2 minutes. What is the learning curve rate for the new product?

You answered D

75%



A

67%

B

70%

C

71%


Question 19/60

Text A company has identified that it has three customer groups which each purchase thesame product – the difference in the amount paid reflects the various discounts thatthey have negotiated.

Group 1 Group 2 Group 3Selling price per unit £0.50 £0.75 £0.60Units sold 100 000 50 000 75 000Number of deliveries 25 4 5

The cost per delivery has been calculated at £250.Which group of customers generates the LOWEST total profit?

You answered B

Group 2



A

Group 1

C

Group 3

D

All generate an equal level of profit.



Question 20/60

Text Managers need knowledge of cost behaviour for a number of reasons. Which of thefollowing activities need knowledge of cost behaviour? Select ALL that apply. A. Budgeting and production planningB. Performance evaluationC. Preparation of final accountsD. Break even analysis and short term decision making

You answered C

A, B and D



A

A, B and C

B

B, C and D

D

All of them


Question 21/60

Text A company has produced the following materials usage budget:

Month 1 Month 2 Month 3 Month 425 000 kg 32 500 kg 33 500 kg 34 000 kg

There will be no opening inventory and the company is planning to introduce a policyof holding 15% of the following month’s materials requirement as closing stock fromthe end of Month 1 onwards.The price of the materials in Month 1 is expected to be £5 per kg and this is expectedrise by £1 a month.Calculate the materials purchases for Month 3.

You answered B

£235 025



A

£234 500

C

£240 125

D

£245 200



Question 22/60

Text A bicycle factory uses absorption costing. Its budgeted annual overheads total£100 000 and they are apportioned on the basis of direct labour hours at a rate of £1an hour. During the year 130 000 hours are worked and actual overheads are£110 000. What is the level of under or over absorption of overheads?

You answered C




A


B


D



Question 23/60

Text Starting at the highest level, what are the three levels of managerial decision making?

You answered A

Strategic, Tactical and Operational.



B

Tactical, Operational and Programmed.

C

Strategic, Operational and Tactical.

D

Strategic, Tactical and Programmed.



Question 24/60

Text A municipal authority is preparing a capital budget for the construction of ten newhouses that it intends to let to tenants. The following information is available: • The land will be purchased in 2016/17 for £500 000 • Each house will cost £100 000 to construct. Five will be built in 2016/17 and five in2017/18 • Fees will be payable at 12% of construction cost • Tax will be payable at 20% of construction costWhat will be the total capital budget required for 2016/17?

You answered B

£1 160 000



A

£1 000 000

C

£1 320 000

D

£1 820 000


Question 25/60

Text A hospital uses incremental budgeting. In one year the hospital’s budget included£200 000 for capital charges. During the year additional equipment has beenpurchased and so capital charges are expected to increase by 5% in the followingyear. General inflation is expected to be 2%.When preparing the following year’s budget what will be value for capital chargesBEFORE the adjustment for inflation is made?

You answered B

£210 000



A

£200 000

C

£204 000

D

£214 200



Question 26/60

Text A college has a financial year that runs from April to March and is preparing its budgetfor 2016/17 using incremental budgeting on a fixed price basis. The date on whichprices are fixed is 1 November.It has the following 2015/16 budgets for utilities: • Electricity: £11 990 • Gas: £14 120 • Water: £8 350The following price indices are available:

1 November 2013 1 November 2014 1 November 2015Electricity 100 102.5 105.1Gas 100 103.4 107.5Water 100 104.8 109.5

What would be the total budget for these three items for 2016/17?

You answered C

£35 698



A

£34 460

B

£35 641

D

£36 924


Question 27/60

Text A company manufactures wooden furniture. The manufacturing process producessawdust that the company can either dispose of at a cost of £1 per kg or it can bag it ata cost of £3 per kg and sell it for £6 per kg. During a particular month 100kg ofsawdust was produced. What would be the value to the company of the sawdust?

You answered C

£300



A

Nil

B

£100

D

£600



Question 28/60

Text A company has recorded the following data for the last three months.

Month 1 Month 2 Month 3Number of unitsproduced

12 000 10 000 11 200

Overhead costs 6 000 6 000 6 000Raw materials costs 36 000 30 000 33 600Salaries 18 000 18 000 18 000Maintenance costs 3 000 2 500 3 000

All costs are either fixed or variable.What would the equation be for the total monthly costs of units produced in the form ofy = a + bx?

You answered A

y = 24 000 +3.25x



B

y = 6 000 +2.5x

C

y = 18 000 + 2.5x

D

y = 30 000 +3.25x


Question 29/60

Text A flexible budget can be defined as:

You answered B

A budget that, by recognising different cost behaviour patterns, is designed to changeas the volume of activity changes.



A

A budget for a defined period of time that includes planned revenue, expenditure,assets, liabilities and cash flow.

C

A budget that only includes variable production costs and excludes all other costs.

D

A budget that is reviewed monthly with forecast income and expenditure being revisedand rolled forward by a month.



Question 30/60

Text A building company uses the ‘first in, first out’ (FIFO) method to cost materials to jobs.At the beginning of the accounting period it had no inventories of sand. On 1 April itbought 1 000kg of sand for £10 000. On 15 May it bought a further 1 000kg of sand for£12 000. At the end of May there was 1 500kg of sand held as inventory. On 1 June600kg of sand was issued to job A.What is the value of the sand issued to job A?

You answered B

£6 200



A

£6 000

C

£6 600

D

£7 200


Question 31/60

Text A company has established the following cost information.

Units produced Total costs (£)1 000 7 0001 500 9 5002 000 12 0001 700 10 1301 300 8 230

Using the high-low method estimate the total costs for 1 200 units.

You answered D

£8 000



A

£7 500

B

£7 000

C

£8 500



Question 32/60

Text A company that manufactures cosmetics uses Chemical A and Chemical B to produceCosmetic X. The standard cost in materials of manufacturing 1kg of Cosmetic X is750g of Chemical A at £0.50 per gram and 350g of Chemical B at £0.80 per gram(some of the chemicals are lost in the process).During an accounting period the company manufactures 10kg of Cosmetic X using9 500g of Chemical A at £0.50 per gram and 2 600g of Chemical B at £0.80 per gram.What is the materials mix variance?

You answered D

£375 favourable



A

£675 adverse

B

£300 adverse

C

£300 favourable



Question 33/60

Text A municipal authority is preparing an activity based budget for its finance department.Three activities have been identified: Accountancy, Audit and Exchequer (incomecollection, creditor payments and payroll).The salaries for the senior management team are as follows: • Director of Finance: £80 000 • Deputy Director of Finance: £60 000 • Assistant Director of Finance (Accountancy): £50 000 • Assistant Director of Finance (Audit & Exchequer): £50 000 • Total: £240 000.The following information is also available from the staff time recording system: • Director of Finance: 50% accountancy; 30% audit; 20% exchequer. • Deputy Director of Finance: 80% accountancy; 10% audit; 10% exchequer. • Assistant Director of Finance (Accountancy): 100% accountancy. • Assistant Director of Finance (Audit & Exchequer): 70% audit; 30% exchequer.How much of the salaries of the senior management team should be included in theactivity based budgets?

You answered A

Accountancy £138 000; Audit £65 000; Exchequer £37 000.



B


C


D




Question 34/60

Text A company has calculated that is has an adverse labour rate variance and afavourable labour efficiency variance.Which of the following explanations would explain these variances?A. The labour used was more highly skilled than the standard meaning that they werepaid a higher rate but that they made the items more quickly than the standard.B. The company offered a bonus scheme if work was completed more quickly thanthe standard timeC. There was a lower learning curve achieved than in the standardD. The company had bought lower quality materials which were more difficult to workwith.

You answered A

A and B



B

C and D

C

A and D

D

B and C



Question 35/60

Text A company carries out a chemical process and in the month of June the followingcosts were incurred:

Materials – 10 000 kg£24 000 Labour and overheads costs

Actual output during the month was 9 700 kg.The normal loss from the chemical process is 5% giving an expected output in June of9 500kg. Any scrap can be sold for £2 per kg.What is the net value of the abnormal gain recorded in the company’s incomestatement?

You answered A

£420



B

£440

C

£820

D

£840


Question 36/60

Text An individual never leaving the office before 18.00 because all staff stay until 18.00despite their contracted hours being 09.00 to 17.00 is an example of which type ofcontrol?

You answered A

Social control



B

Self-control

C

Administrative control

D

Output control



Question 37/60

Text A company sells a single product and the following are expected in the next threemonths:

Sales Purchases ExpensesMonth 1 £550 000 £200 000 £25 000Month 2 £500 000 £225 000 £25 000Month 3 £600 000 £240 000 £25 000

All sales are on credit and collections have the following pattern: • During the month of sale 80% (a 5% discount is given for payment in this period) • One month later 10% • 10% of sales are never collectedPayment for purchases is made in the month of purchase in order to take advantage ofa 10% prompt settlement discount, calculated on the gross purchases figure shownabove.Expenses are paid for in the month in which they are incurred and include depreciationof £1 000.What would be the budgeted net cash inflow for Month 3?

You answered C

£266 000



A

£231 000

B

£255 000

D

£290 000



Question 38/60

Text A company operates a standard costing system. During the year the following salesdata is recorded: • Actual Price: £4.90 • Standard Price: £5 • Actual Quantity Sold: 1 100 • Standard Quantity: 1 000 • Standard Profit: £1What are the sales price variance and sales volume variance?

You answered A

Sales Price Variance £110A; Sales Volume Variance £100F



B


C


D




Question 39/60

Text

A company produces sacks of sugar which contain a mean weight of 15kg. A sampleof sandbags contain the following weights: 14.5 14.9 15 15.1 15.5Using the above formula, what is the standard deviation for this sample (to 2 decimalplaces)?

You answered D

0.36



A

0.10

B

0.13

C

0.32


Question 40/60

Text A company manufactures a single product. Its variable costs are £8 a unit and fixedcosts are £4 a unit. During September it manufactures 1 000 units. There were 100units in stock at the start of the period and 200 at the end of the period.What is the cost of sales using marginal costing and absorption costing?

You answered A

Marginal costing £7 200; Absorption costing £10 800.



B


C


D




Question 41/60

Text A bespoke job would require three types of materials:Material A • 1 000 units are required and there are currently no units in inventory. • Current replacement cost is £5 per unit.Material B • 1 000 units are required and there are currently 600 units in inventory which cost £3per unit. • It is used regularly by the firm and any units used on this job would need to bereplaced to meet other production demand. • Current replacement cost is £4 per unitMaterial C • 500 units are required and there are currently 700 units in inventory as a result ofoverbuying. They were purchased for £5 per unit • There is no other use for Material C within the firm but it could be sold as scrap for£2 per unit. • Current replacement cost is £6 per unit.What is the relevant cost for materials for this job?

You answered B

£10 000



A

£12 000

C

£9 400

D

£9 000



Question 42/60

Text A company is deciding whether or not to enter the market for two new products,Product X and Product Y.The company has a policy that all products must make a profit of at least 40% of theselling price.Market research has indicated that customers would be willing to pay £15 for productX and £10 for product Y.The following information is also available:

Product X Product YDirect costs £8 £4Overheads £2 £1

Based on financial factors only and following their policy what should the company do?

You answered B

Make Product Y only



A

Make Product X only

C

Make both products.

D

Make neither product.



Question 43/60

Text A municipal authority operates an incremental budgeting system using the Novemberprice base method to set the budgets. Their financial year is 1 April to 31 March.The 2014/15 budget included £120 000 for salaries, £50 000 for rent and £10 000 forelectricity.In December 2014 rent increased by 10% and it is expected to increase by a further5% in December 2015.Electricity prices increased by 5% in April 2014 and are expected to increase by afurther 5% each year from this point.Due to financial pressures staff have not received any pay increases since October2013 but due to successful campaigning by the trade unions a pay rise of 7% hasbeen agreed for all staff from 1 July 2015.What should be the budgets for 2015/16 be?

You answered C

Salaries £120 000, Rent £50 000, Electricity £10 500



A


B


D



Question 44/60

Text A diagram where the problem is noted in the centre and different categories of causeare then established, then for each category reasons for failure are sought is adescription of which type of diagram?

You answered B

Cause and effect diagram



A

Breakeven chart

C

Venn diagram

D

Pie chart



Question 45/60

Text A college provides training for accountancy, legal and engineering businesses. It usescustomer profitability analysis to assess the profitability of providing training to eachgroup of customers.Three cost drivers have been identified as follows: • Staff based expenditure: £50 per hour of staff time. • Premises based expenditure: £60 per m2 of floorspace used. • Student based expenditure: £900 per student enrolled.The following data is available regarding accountancy training: • Floorspace used: 200m2 • Students enrolled: 70 • Staff time per month: 140 hoursWhat would be the annual total cost for the accountancy training?

You answered B

159 000



A

156 000

C

161 000

D

163 000



Question 46/60

Text A Finance Director is considering investing surplus cash and is using the co-efficient ofvariation to decide which of four investment options to take.The following information is available: • Option A – mean return 9%; standard deviation 4%. • Option B – mean return 12%; standard deviation 8%. • Option C – mean return 8%; standard deviation 3%. • Option D – mean return 15%; standard deviation 15%.The Finance Director would like to choose the option with least risk. Which optionwould this be?

You answered A

Option A

The correct answer was C

Option C


A

Option A

B

Option B

D

Option D


Question 47/60

Text A batch used 2 000 kg of a material which cost £10 per kg.90 hours labour were spent in Department A where the employees were paid at £12per hour and 40 hours were spent in department B where employees are paid at £10per hour. Overheads are absorbed at the rate of £2.50 per labour hour.175 units were producedCalculate the total absorption cost of the batch and each unit produced.

You answered A

Total cost of batch £21 805, cost per unit £124.60



B


C


D




Question 48/60

Text A housing association’s asset management budgets for 2015/16 include the following: • Responsive Repairs: £1 500 000 • Works to Voids: £800 000 • Planned Maintenance: £3 200 000Budget monitoring reports show a 10% underspend on responsive repairs that isexpected to continue to the year end. The Asset Manager decides to use virement toincrease the budget for planned maintenance.What would be the budget for planned maintenance?

You answered C

£3 350 000



A

£3 050 000

B

£3 200 000

D

£3 520 000


Question 49/60

Text Budgets should be designed and managed in a way that encourages constructivebehaviour from managers.Which of the following actions support this aim?A. Discouraging virement to ensure budgets are fully spentB. Providing a statement of the overall direction of the organizationC. Focussing on a narrow range of fixed targetsD. Rewarding staff for achieving performance based targets

You answered D

B and D



A

A and B

B

B and C

C

C and D



Question 50/60

Text A company is carrying out key factor analysis on its products. The following data isavailable for the costs of producing one unit of product A: • Price: £80 • Materials: 10kg at £3 per kg • Skilled labour: half an hour at £20 per hour • Unskilled labour: 2 hours at £8 per hour • Fixed overheads £12The limiting factor is unskilled labour.What is the contribution per limiting factor?

You answered B

12



A

1

C

24

D

56


Question 51/60

Text A company has budgeted overheads of £36 000 a year and plans to manufacture 100bicycles a month. It uses absorption costing to absorb overheads. In October it actuallymanufactures 110 bicycles and actual overheads are £3 500. What would be the levelof under or over absorption of overheads?

You answered A

£200 under absorbed



B

£500 under absorbed

C

£300 over absorbed

D

£200 over absorbed



Question 52/60

Text A building company has used the theory of constraints to identify that their cementmixer is a bottleneck.The following information is available: • Throughput contribution per hour has been calculated as £12. • Total factory cost is £80 per day. • Total time available on the cement mixer is 8 hours per dayWhat is the throughput accounting (TA) ratio?

You answered B

1.2



A

1.0

C

1.4

D

1.6



Question 53/60

Text

A municipal authority has a building maintenance direct labour organisation with an in-house window factory. The authority wants to calculate how expenditure on electricityis affected by variations in the level of output of windows.The correlation between two variables can be found using the formula above.The following data has been gathered over the previous six months:

Period

Output(x)

Costs £000(y)

xy x2 y2

1 120 11.2 1 344 14 400 125.442 130 12 1 560 16 900 144.003 150 13.3 1 995 22 500 176.894 120 11.9 1 428 14 400 141.615 180 15.1 2 718 32 400 228.016 170 13.7 2 329 28 900 187.69Total 870 77.2 11 374 129 500 1 003.64

What is the correlation coefficient?

You answered C

0.97



A

0.91

B

0.94

D

0.99



Question 54/60

Text A company has identified the following overhead costs:

CostProcessing orders £80 000Materials handling £60 000Setting up £90 000

The following information is available:

Orders 40Material movements 20Production runs 80

A department uses 5 orders, 10 material movements and 10 production runs. Howmuch overhead would be allocated to it?

You answered B

£51 250



A

£41 071

C

£61 250

D

£71 071


Question 55/60

Text A company has been offered a one-off contract that will involve using a piece ofmachinery that is no longer used. The machine was originally purchased for £15 000but a new replacement would cost £25 000. It had been intended to sell the machinefor scrap for £5 000 but it now emerges that it could be sold to another company for£10 000. What is the relevant cost of the machine in deciding whether to enter into theone-off contract using relevant costing methods?

You answered B

£10 000



A

£5 000

C

£15 000

D

£25 000



Question 56/60

Text A company budgets to make 10 000 units of a product. Annual budgeted variablecosts are £120 000 and overheads are £20 000. At the end of an accounting periodthe company has an inventory of 50 units. What would be the value of the inventoryusing marginal costing and absorption costing methods?

You answered C

Marginal costing £600; Absorption costing £700.



A


B


D



Question 57/60

Text A company has annual fixed costs of £300 000 and sells a single product for £100 perunit. The variable cost per unit consists of £60 for labour and £25 for materials. Howmany units must the company sell to make a profit of £60 000?

You answered B

24 000 units



A

30 000 units

C

20 000 units

D

12 000 units



Question 58/60

Text A new management accountant in a food processing company finds that the followingcosts are being charged to the production overhead account. Which of them shouldNOT be charged to the production overhead account?

You answered A

Ingredients.



B

Rent for the building in which the food processing takes place.

C

The salary of the site manager.

D

Depreciation of the freezers in which ingredients are stored.


Question 59/60

Text A company uses standard costing and for one month have established the followinginformation: • Materials price variance £7 000 F • Actual cost of raw materials used £50 000The standard cost of the raw materials is £15 per kg.What quantity of raw materials were used in the month?

You answered D

3 800 kg



A

3 200 kg

B

3 333 kg

C

3 633 kg



Question 60/60

Text A canteen’s budget for 2015/16 for meals was £620 250. Inflation is estimated at 2%. During 2016/17 it is estimated that 650 customers will require meals for 320 days at acost of £3.20 per meal. What should be the meals budget for 2016/17 applying zero-based budgeting?

You answered D

£665 600



A

£632 655

B

£649 125

C

£652 400



End of Report 20/11/2016

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