Accounting A level mixed paper 2

A manufacturer employs one factory supervisor for every 5 factory workers.

Which best describes the cost of the factory supervisors' salaries?

• Direct and stepped fixed

• Direct and variable

• Indirect and stepped fixed

• Indirect and variable

Which is the correct formula to calculate the current ratio?

Which of the following is an advantage of zero-based budgeting?

• Budgets are quick to prepare

• It encourages managers to work together

• Inexpensive to operate

• Minimal planning required

A manufacturer requires 9,000 labour hours and 3,000kg of material to produce 450 units of product L and 300 units of product M. It expects to have 7,500 labour hours and 3,500 kg of material available.

Which product should it product first?

• The product with the highest contribution per kg of material

• The product with the highest contribution per labour hour

• The product with the highest contribution per unit

• The product with the highest profit per unit

Answer explanation

There are not enough labour hours to enable production of all the units (9,000 hours are required, and only 7,500 hours are available). Therefore to maximise profit you need to produce the product with the highest contribution per labour hour.

The following information is available for the sale of product D for April 20x1+

Budgeted sales 3,100 units

Actual sales 2,950 units

Budgeted sales revenue £20,460

Actual sales revenue £19,765

What is the sales volume variance?

• £695 Adverse

• £695 Favourable

• £990 Adverse

• £990 Favourable

Which is the correct formula to calculate the rate of inventory turnover in days?

The following information is available for product K for May 20x1.

Standard Material Usage per unit 1.5kg

Standard material cost per kg £9.00

Actual production 4,500 units

Material usage variance £900 Adverse

How many kg of material were used in May 20x1?

• 6,650

• 6,750

• 6,850

• 7,650

The gross profit margin percentage of a business has decreased.

Which of the following could have caused this change?

• Decrease in carriage inwards

• Increase in carriage inwards

• Decrease in carriage outwards

• Increase in carriage outwards

Which is never a responsibility of a management accountant within a business?

• External audit

• Internal audit

• Monitor budgets

• Prepare budgets

Which of the following is NOT true for a public limited company?

• It can offer shares to the general public

• It is a separate legal entity

• It needs a minimum allotted share capital of £50,000

• It needs a minimum of one director