Quiz about ACCA

Question 1

Which of the following describes Reginald's role
in department M?

Accepted Answer

A cost centre manager

Answer

An investment centre manager

Answer

A revenue centre manager

Answer

A profit centre manager

Question 2

Which of the following statements is NOT correct?

Accepted Answer

Financial accounting information can be used for
internal reporting purposes.

Answer

Cost accounting can be used for inventory
valuation to meet the requirements of internal reporting only.

Answer

Management accounting provides appropriate information for decision making, planning, control and performance evaluation.

Answer

Routine information can be used for both short-term and long-run decisions.

Question 3

The following statements relate to financial
accounting or to cost and management accounting.
(i) Financial accounts are historical records.
(ii) Cost accounting is part of financial
accounting and establishes costs incurred by an organisation.
(iii) Management accounting is used to aid planning, control and decision making.
Which of the statements are correct?

Accepted Answer

(i) and (iii) only

Answer

(i) and (ii) only

Answer

(ii) and (iii) only

Answer

(i), (ii) and (iii)

Question 4

The manager of a profit centre is responsible for which of the following?
(i) Revenues of the centre

(ii) Costs of the centre

(ii) Assets employed in the centre

Accepted Answer

(i), (ii) and (ji)

Answer

(i) only

Answer

(ii) only

Answer

(i) and (ii) only

Question 5

Which of the following would be best described as a short-term tactical plan?

Accepted Answer

Lowering the selling price by 15%

Answer

Reviewing cost variances and investigate as appropriate

Answer

Comparing actual market share to budget

Answer

Monitoring actual sales to budget

Question 6

The following statements refer to strategic planning:
(i) It is concerned with quantifiable and qualitative matters.
(ii) It is mainly undertaken by middle management in an organisation.
(iii) It is concerned predominantly with the long term.
Which of the statements are correct?

Accepted Answer

(i) and (iii) only

Answer

(i) and (ii) only

Answer

(ii) and (iii) only

Answer

(i), (ii) and (iii)

Question 7

Which of the following descriptions only contains essential features of useful management information?

Accepted Answer

Understandable, accurate, relevant for its purpose

Answer

Accurate, understandable, presented in report
format

Answer

Timely, reliable, supported by calculations

Answer

Regular, complete, communicated in writing

Question 8

A firm has to pay a $0.50 per unit royalty to the inventor of a device which it manufactures and sells.
How would the royalty charge be classified in the firm's accounts?

Accepted Answer

selling expense

Answer

direct expense

Answer

production overhead

Answer

administrative overhead

Question 9

Which of the following can be included when
valuing inventory?
(i) Direct material

(ii) Direct labour

(iii) Administration costs

(iv) Production overheads

Accepted Answer

(i), (ii) and (iv)

Answer

(i), (ii) and (iii)

Answer

(ii), (iii) and (iv)

Answer

(i), (iii) and (iv)

Question 10

Which of the following is usually classed as a step cost?

Accepted Answer

Supervisor's wages

Answer

Raw materials

Answer

Rates

Answer

Telephone

Question 11

Which of the following is NOT a cost object?

Accepted Answer

A manager

Answer

A cost centre

Answer

A customer

Answer

A product

Question 12

Which of the following costs would NOT be classified as a production overhead cost in a food processing company?

Accepted Answer

The cost of ingredients

Answer

The cost of renting the factory building

Answer

The salary of the factory manager

Answer

The depreciation of equipment located in the materials store

Question 13

Which of the following describes cost centres?

Accepted Answer

functions or locations for which costs are ascertained

Answer

Units of product or service for which costs are ascertained

Answer

amounts of expenditure attributable to various activities

Answer

a section of an organisation for which budgets are prepared and control exercised

Question 14

The correlation coefficient (r) for measuring the connection between two variables (x and y) has been calculated as 0.6.
How much of the variation in the dependent variable (y) is explained by the variation in the independent variable (x)?

Accepted Answer

36%

Answer

40%

Answer

60%

Answer

64%

Question 15

Which of the following are correct with regard to regression analysis?
(i) In regression analysis the n stands for the number of pairs of data
(ii) {x2 is not the same calculation as ({x)2

(iii) {xy is calculated by multiplying the total value of x and the total value of y

Accepted Answer

(i), (ii) and (iii)

Answer

(i) and (ii) only

Answer

(i) and (iii) only

Answer

(il) and (iii) only

Question 16

The coefficient of determination (r2) has been calculated as 60%.
What does this mean?

Accepted Answer

60% of the variation in the dependent variable (y) is explained by the variation in the independent variable (X)

Answer

40% of the variation in the dependent variable (y) is explained by the variation in the independent variable (x)

Answer

60% of the variation in the dependent variable (x) is explained by the variation in the independent variable (y)

Answer

40% of the variation in the dependent variable (x) is explained by the variation in the independent variable (y)

Question 17

Which of the following correlation coefficients indicates the weakest relationship between two variables?

Accepted Answer

- 0.6

Answer

+ 1.0

Answer

+ 0.4

Answer

- 1.0

Question 18

Which of the following is a feasible value for a correlation coefficient?

Accepted Answer

0

Answer

+1.2

Answer

-1.2

Answer

-2.0

Question 19

Which of the following will be completed by a production department requiring new materials to be obtained from suppliers?

Accepted Answer

A purchase order

Answer

A delivery note

Answer

A goods requisition note

Answer

A goods received note

Question 20

Which TWO of the following are included in the cost of holding inventory?

Accepted Answer

Rental payments on storage space

Accepted Answer

The cost of placing

Answer

The cost of insurance

Answer

The delivery costs

Question 21

Which of the following is in the correct chronological sequence for purchase documents?

Accepted Answer

Purchase order - Delivery note - Goods received note - Invoice

Answer

Purchase order - Invoice - Goods received note -
Delivery note

Answer

Delivery note - Goods received note - Purchase order - Invoice

Answer

Goods received note - Delivery note - Purchase order - Invoice

Question 22

Which of the following describes a purchase order?

Accepted Answer

Issued by the purchasing department, sent to the supplier requesting materials

Answer

Issued by the stores department, sent to the purchasing department requesting materials

Answer

Received together with the materials and compared to the materials received

Answer

Issued by the production department, sent to the stores department requesting materials

Question 23

Which of the following is least relevant to the economic order quantity model for inventory?

Accepted Answer

Safety inventory

Answer

Annual demand

Answer

Holding costs

Answer

Ordering costs

Question 24

The following statements refer to situations occurring in Process Q of an organisation which operates a series of consecutive processes:
(i) Direct labour is working at below the agreed productivity level.
(ii) A machine breakdown has occurred.

(iii) Direct labour is waiting for work to be completed in a previous process.
Which of these situations could give rise to idle time?

Accepted Answer

(ii) and (iii) only

Answer

(i) and (ii) only

Answer

(i) and (iii) only

Answer

(i), (ii) and (iii)

Question 25

At 1 January a company employed 5,250 employees. Due to expansion the number of employees increased to 5,680 by 31 December.
During the year 360 staff left the company and were replaced. What was the labour turnover rate?

Accepted Answer

6.6%

Answer

6.3%

Answer

6.9%

Answer

360 staff

Question 26

A direct labour employee works a standard 37 hour week and is paid a basic rate of $15 per hour.
Overtime is paid at time and a half. In a week when 40 hours were worked and a bonus of $20 was paid, what was the direct labour cost?

Accepted Answer

$642.50

Answer

$555

Answer

$600

Answer

$622.50

Question 27

Which of the following situations would cause overheads to be over-absorbed?

Accepted Answer

when absorbed overheads exceed actual overheads

Answer

when absorbed overheads exceed budgeted overheads

Answer

When actual overheads exceed budgeted overheads

Answer

when budgeted overheads exceed absorbed overheads

Question 28

What is cost apportionment?

Accepted Answer

The process of establishing the costs of cost centres or cost units

Answer

The charging of discrete identifiable items of cost to cost centres or cost units

Answer

The collection of costs attributable to cost centres and cost units using the costing methods, principles and techniques prescribed for a particular business entity

Answer

The division of costs amongst two or more cost centres in proportion to the estimated benefit received, using a proxy, e.g. square metres

Question 29

A company has established a marginal costing profit of $72,300. Opening inventory was 300 units and closing inventory is 750 units. The fixed production overhead absorption rate has been calculated as $5/unit.
What was the profit under absorption costing?

Accepted Answer

$74.550

Answer

$67.050

Answer

$70.050

Answer

$77.550

Question 30

Which of these statements are true of marginal costing?
(i) The contribution per unit will be constant if the sales volume increases.
(ii) There is no under- or over-absorption of overheads.
(iii) Marginal costing does not provide useful information for decision making.

Accepted Answer

(i) and (ii) only

Answer

(ii) and (iii) only

Answer

(i) only

Answer

(i) and (iii) only

Question 31

A company operates a job costing system. Job 812 requires $60 of direct materials, $40 of direct labour and $20 of direct expenses. Direct labour is paid $8 per hour. Production overheads are absorbed at a rate of $16 per direct labour hour and non-production overheads are absorbed at a rate of 60% of prime
COST.
What is the total cost of Job 812?

Accepted Answer

$272

Answer

$240

Answer

$260

Answer

$320

Question 32

If there are abnormal losses in a process how is this recorded in a process account?

Accepted Answer

debit with the full production cost of the abnormal loss units

Answer

debit with the scrap value of the abnormal loss units

Answer

credit with the scrap value of the abnormal loss units

Answer

credit with the full production cost of the abnormal loss units

Question 33

What are the main purposes of budgeting?
(i) to give authority to spend

(ii) to control expenditure

(iii) to aid decision making

Accepted Answer

(i), (ii) and (iii)

Answer

(i) only

Answer

(i) and (ii) only

Answer

(ii) only

Question 34

Who does the budget committee contain?
(1) Purchasing manager

(ii) The chief executive

(iii) Sales manager

(iv) Production manager

Accepted Answer

(i) and (ii) only

Answer

(iii) and (iv) only

Answer

(i), (ii) and (iii) only

Answer

All of the above

Question 35

A budget manual will include which of the following?
(i) An organisation chart

(ii) A budget timetable

(iii) Copies of budget forms
(iv) Key assumptions to be used in the budget

Accepted Answer

All of the above

Answer

(ii), (iii) and (iv)

Answer

(ii) and (iv)

Answer

(iii) and (iv)

Question 36

Which of the following is NOT a purpose of budgeting?

Accepted Answer

Consultation

Answer

Planning

Answer

Co-ordination

Answer

Communication

Question 37

What is the formula to calculate the production budget?

Accepted Answer

Sales budget - opening inventory - closing inventory

Answer

Sales budget + opening inventory - closing inventory

Answer

Sales budget - opening inventory + closing inventory

Answer

Sales budget + opening inventory + closing inventory

Question 38

What is the formula to calculate the material usage budget?

Accepted Answer

Production budget multiplied by the standard material quantity per unit

Answer

Sales budget multiplied by the standard material quantity per unit

Answer

Production budget less opening inventory plus closing inventory

Answer

Production budget plus opening inventory less closing inventory

Question 39

What would be the principal budget factor for a footwear retailer?

Accepted Answer

The constraint that is expected to limit the retailer's activities during the budget period

Answer

The cost item taking the largest share of total expenditure

Answer

The product line contributing the largest amount to sales revenue

Answer

The product line contributing the largest amount to business profits

Question 40

What is a flexible budget?

Accepted Answer

a budget which, by recognising different cost behaviour patterns, is designed to change as volume of activity changes

Answer

a budget for semi-variable overhead costs only

Answer

a budget for a twelve month period which includes planned revenues, expenses, assets and liabilities

Answer

a budget which is prepared for a rolling period which is reviewed monthly, and updated accordingly

Question 41

What is a purpose of a flexible budget?

Accepted Answer

to produce a revised forecast by changing the original budget when actual costs are known

Answer

to cap discretionary expenditure

Answer

to control resource efficiency

Answer

to communicate target activity levels within an organisation by setting a budget

Question 42

What is a fixed budget?

Accepted Answer

a budget for a single level of activity

Answer

a budget used when the mix of products is fixed in advance of the budget period

Answer

a budget which ignores inflation

Answer

an overhead cost budget

Question 43

Which of the following statements are correct?
(i) A fixed budget is a budget that considers all of an organisation's costs and revenues for a single level of activity.
(ii) A flexible budget is a budget that is produced during the budget period to recognise the effects of any changes in prices and methods of operation that have occurred.

(iii) Organisations can use budgets to communicate obiectives to their managers.

Accepted Answer

(i) and (iii) only

Answer

(i) and (il) only

Answer

(il) and (iii) only

Answer

All of them

Question 44

Which of the following statements are correct?
(i) An adverse variance increases profit

(ii) A favourable variance increases profit

(iii) A favourable variance will arise when actual revenue is greater than budgeted revenue

(iv) An adverse variance will arise when actual costs are greater than budgeted costs
Options:(1) only

Accepted Answer

(i), (ii) and (iv)

Answer

(i) only

Answer

(ii) only

Answer

(ii), (iii) and (iv)

Question 45

Under absorption costing the sales volume variance is calculated by multiplying the difference in sales volumes by which of the following?

Accepted Answer

Standard cost per unit

Answer

Standard contribution per unit

Answer

Standard profit per unit

Answer

Standard selling price per unit

Question 46

Which of the following could be the cause of an adverse sales volume variance for garden furniture?
(i) The company offers discounts on sales prices in order to maintain business.
(ii) Poor weather leads to a reduction in sales.

(iii) A strike in the factory causes a shortage of finished goods.

Accepted Answer

(ii) and (iii) only

Answer

(i) and (ii) only

Answer

(i) and (iii) only

Answer

All of them

Question 47

Which of the following is service costing characterised by?

Accepted Answer

high levels of indirect costs as a proportion of total

Answer

identical output units

Answer

the ability to store the units

Answer

long shelf life of output

Question 48

Which of the following statements about variable costs is correct?

Variable costs are conventionally deemed to:

Accepted Answer

vary per unit of output as production volume changes

Answer

be constant per unit of output

Answer

vary in total when production volume is constant

Answer

vary, in total, from period to period when production is constant

Question 49

Which of the following statements is true about
direct costs?

Accepted Answer

they can be directly identified with a product or service

Answer

they are directly under the control of a manager

Answer

they are incurred directly the factory is opened

Answer

they are directly charged to a department

Question 50

The following statements refer to strategic planning:
(i) It is concerned with quantifiable and qualitative matters.
(ii) It is mainly undertaken by middle management in an organisation.
(iii) It is concerned predominantly with the long term.
Which of the statements are correct?

Accepted Answer

(i) and (iii) only

Answer

(i) and (ii) only

Answer

(ii) and (iii) only

Answer

(i), (ii) and (iii)

Question 51

Which of the following describes 'Information"?

Accepted Answer

data that has been processed in such a way that it has a meaning to the person who receives it, who may then use it to improve the quality of decision making

Answer

data that consists of facts and statistics before they have been processed

Answer

data that consists of numbers, letters, symbols, events and transactions which have been recorded but not yet processed into a form that is suitable for making decisions

Answer

facts that have been summarised but not yet processed into a form that is suitable for making decisions

Question 52

Which one of the following statements is correct?

Accepted Answer

Information is obtained by processing data

Answer

Data is held on computer in digital form whereas information is in a form that is readable to human beings

Answer

Data and information mean the same thing

Answer

Data consists of numerical or statistical items of information

Question 53

Which TWO of the following are included in the prime cost of a product?

Accepted Answer

Direct material

Answer

Direct labour

Answer

Administration costs

Answer

Production overheads

Question 54

What is the economic batch quantity used to establish?

Accepted Answer

Optimal reorder quantity

Answer

Optimal reorder level

Answer

Maximum inventory levels

Answer

Optimal quantity to be manufactured

Question 55

The following documents are used in accounting for raw materials:
(i) goods received note
(ii) materials returned note

(iii) materials requisition note

(iv) delivery note
Which of the documents may be used to record raw materials sent back to stores from production?

Accepted Answer

(i) and (iv)

Answer

(i) and (ii)

Answer

(ii) only

Answer

(ii) and (iii)

Question 56

Which TWO of the following labour records may be used to allocate costs to the various cost units in a factory?

Accepted Answer

Timesheet

Answer

Employee record card

Answer

Attendance record card

Answer

Job card

Question 57

H&H employed on average 55 employees during the year. There had been 8 leavers all of whom were replaced.
What was the company's labour turnover
ratio?

Accepted Answer

14.55%

Answer

7.30%

Answer

8.50%

Answer

17.00%

Question 58

What is an overhead absorption rate used for?

Accepted Answer

charge overheads to products

Answer

share out common costs over benefiting cost
centres

Answer

find the total overheads for a cost centre

Answer

control overheads

Question 59

A company has established a marginal costing profit of $72,300. Opening inventory was 300 units and closing inventory is 750 units. The fixed production overhead absorption rate has been calculated as $5/unit.
What was the profit under absorption costing?

Accepted Answer

$74,550

Answer

$67,050

Answer

$70,050

Answer

$77,550

Question 60

A business operates a job costing system and prices its jobs by adding 20% to the total cost of the job.
The prime cost of a job was $6,840 and it had used 156 direct labour hours. The fixed production overheads are absorbed on the basis of direct labour hours. The budgeted overhead absorption rate was based upon a budgeted fixed overhead of $300,000 and total budgeted direct labour hours of 60,000.
What should the job be sold for?

Accepted Answer

$9,144

Answer

$7,620

Answer

$8,382

Answer

$9,525

ACCA

Create a free account and access millions of resources

Similar Resources on Wayground

Popular Resources on Wayground

Discover more resources for Science