A company manufactures and sells a single product.  At the end of the manufacturing process all units are inspected and 20% are rejected and scrapped.  Next year the budgeted sales are 192,000 units and the inventory of finished units will increase by 2,000 units.

What is next year's budgeted production (in units) which will be subject to inspection?  

Which TWO of the following statements about fixed and flexible budgets are true?

(a) Comparison of a fixed budget with the actual results is useful for budgetary control purposes

(b) Preparing flexible budgets requires knowledge of cost behaviour

(c) Flexible budgeting assumes that most costs are semi-variable 

(d) Fixed budgets are useful for monitoring fixed costs

Which of the following statements about payback is TRUE?  

T Co usually has a quarterly labour cost of $2,500,000. Material costs (mainly copper) were $3,000,000 in January to March. The worldwide cost of copper has increased in the second quarter by 15%. Overheads were $45,000,000 in January to March.

Which TWO of the following variances for April to June are worth investigating as the reasons for the variance are unknown?

(a) Overhead expenditure variance of $4,000,000 adverse

(b) Sales volume variance of $3,000,000 favourable

(c) Total direct labour variance of $400 adverse

(d) Materials price variance of $450,000 adverse

Which TWO of the following are true of imposed budgeting?  

(a) It reduces deliberate overestimation of costs and underestimation of revenues in a budget

(b) It increases operational managers' commitment to organisational objectives

(c) Top management prepare a budget with little or no input from operating staff

(d) It is most effective in large organizations

The following statements refer to different types of planning in a large organisation:

(1)

Strategic planning is concerned with both quantitative and qualitative matters

(2)

Tactical planning is concerned with setting long term objectives

(3)

Operational planning is concerned with a time horizon starting one year from now

Which of these statement(s) is/are correct?  

A company used government produced data that showed the economy grew by 4.6% in the last year.

Which of the following describes the data used by the company?

Which of the following statements about big data analytics in organisations is/are TRUE?

(1)

It will provide a deeper understanding of customer behaviour and purchasing preferences

(2)

It will require investment in technology to manage the volume and speed of information accumulated

Which of the following defines the prime cost of a product?

Last month the total sales for XYZ Co were $960,000. A pie chart is used to show the breakdown of sales by region for the month. South region is represented by 60 degrees on the pie chart.

What are the sales for the month for the south region?

A time series model of sales volume has the following trend and additive seasonal variation:

Trend:

Y = 5,000 + 4,000 X

where Y = quarterly sales volume in units,

X = the quarter number (where the first quarter of 20X1 = quarter 17, the second quarter of 20X1 = quarter 18, etc)

What would be the time series forecast of sales units for the third quarter of 20X2?    

The results of an accountancy exam are normally distributed with a mean score of 58 and a standard deviation of 10.

What is the percentage probability that a student will score more than 80 (to 2 decimal places)?

The number of daily enquiries to a local charity has a mean of 18 and a standard deviation of 4 complaints.

What is the coefficient of variation to the nearest whole %?

Is each of these statements about spreadsheets true or false?  

A spreadsheet could be used for preparing flexible budgets for different activity levels.

A spreadsheet is the most suitable software for the long term storage of large volumes of data

Which accounts should be debited and credited to form the correct journal entry to record the direct labour costs charged to production?

A company uses the Economic Order Quantity (EOQ) model and holds no buffer inventory. Its annual cost of holding one unit in inventory has decreased.

What is the effect, if any, of this decrease in holding costs on the EOQ and on the total annual cost of placing orders?  

In the last period an organisation budgeted to work 116,000 hours manufacturing 29,000 units. Actual output last period was 26,000 units which took 108,000 hours to manufacture.

What was the labour efficiency ratio for the last period (to the nearest whole number)?

The following statements refer to documents used in the material procurement procedures of XYZ Co.  Is each of these statements true or false?  

A company uses absorption costing with a predetermined hourly fixed overhead rate.

The following situations arose last year.  Would each of these situations cause overheads to be under absorbed or over absorbed?

Last month an organisation's direct workers were paid $40,000 for normal working. In addition they were paid a total of $12,000 for overtime working. Overtime hours which were required due to a general shortage of labour were paid at time and a half.

What was the total direct labour cost for last month?  

A company manufactures and sells a single product. Next year the budgeted total fixed production costs are $480,000, budgeted sales are 24,000 units and budgeted production is 25,000 units. The budgeted profit for next year using absorption costing principles is $57,500.

What is the budgeted profit for next year using marginal costing principles?  

Last month, a company had an opening inventory of finished goods of 6,000 units and a closing inventory of 4,000 units.  Using absorption costing, this closing inventory was valued at $33,000.  Using marginal costing last month's profit was $50,000 and using absorption costing it was $41,000.

What was the variable production cost per unit last month?

The following data for last month relate to a production process in which no work-in-progress is held:

What was the abnormal loss or abnormal gain for last month?

A company manufactures two main products, J and K, and the by-product L.  The by-product has a net realisable value of $2 per litre.  The following information relates to last month, when there were no opening inventories.

 Joint costs last month were $290,000.  Company policy is to apportion joint costs on a physical measure basis and to treat the net realisable value of the by-product as a deduction from the cost of the main products.  

What was the cost value of last month's closing inventory of product J?  

The following data relate to a process for last month:

 Using the FIFO method, what were the equivalent units of production last month? 

Which of the following are benefits of using activity based costing?

(1) It recognises that overhead costs are not always driven by the volume of production

(2) It does not result in under or over absorption of fixed overheads

(3) It avoids all arbitrary cost apportionments

(4) It is particularly useful in single product businesses

Which of the following statements about standard costing are TRUE?

(1) A standard cost is a predetermined estimated unit cost

(2) A standard cost can be used as a control device to help improve performance

(3) A standard cost card shows the unit cost details only of each product  

12 One material is used in the manufacture of product X.  The total cost of the material (purchased and used) in a period was $4,000.  In the period, the direct material price and usage variances were $200 adverse and $300 favourable respectively and 1,000 units were manufactured.

What is the standard direct material cost per unit for product X?  

A company uses standard marginal costing. Last month the standard contribution on actual sales was $10,000 and the following variances arose:

What was the actual contribution for last month

Which of the following statement(s), relating to performance measurement, is/are true? 

(1) External data are never required to assess the performance of an organisation

(2) The degree of government regulation should be considered when comparing the performance of public sector and private sector organisations

(3) Financial performance indicators are only relevant to private sector organisations

Which of the following statements about mission statements is/are TRUE?    

(1) They are stated in a standard format

(2) They play an important role in the planning process

(3) They help ensure consistency in decision-making

The performance of a publicly funded hospital is monitored using measures based upon the 'three Es'. The most important performance measure is considered to be the achievement of hospital targets for the successful treatment of patients.

Which of the three Es best describes the above measure?  

Which of the following could NOT be used to measure performance in a service organisation?

Which TWO of the following statements relating to value analysis are true?  

(a) Value analysis is a planned, scientific approach to cost reduction

(b) Value analysis attempts to enhance the esteem value of a product at the lowest cost

(c) One of the problems with value analysis is that it discourages innovation

(d) Cost value is the market value of the product or service

The single product manufactured by Allegrop Co requires 2.5 kg of a single raw material per unit of product. The material costs $9.00 per kg.

Budgets are being prepared and the following additional information is available:

(2) Opening inventory of finished goods in each period is budgeted to be 25% of the budgeted sales demand in that period.

(3) Opening inventory of raw material in each period is budgeted to be one third of the budgeted material usage in that period.

Calculate the budgeted inventory of finished goods at the beginning of Period 1.

The single product manufactured by Allegrop Co requires 2.5 kg of a single raw material per unit of product. The material costs $9.00 per kg.

Budgets are being prepared and the following additional information is available:

(2) Opening inventory of finished goods in each period is budgeted to be 25% of the budgeted sales demand in that period.

(3) Opening inventory of raw material in each period is budgeted to be one third of the budgeted material usage in that period.

Calculate the budgeted production volume of the product in Period 2.

The single product manufactured by Allegrop Co requires 2.5 kg of a single raw material per unit of product. The material costs $9.00 per kg.

Budgets are being prepared and the following additional information is available:

(2) Opening inventory of finished goods in each period is budgeted to be 25% of the budgeted sales demand in that period.

(3) Opening inventory of raw material in each period is budgeted to be one third of the budgeted material usage in that period.

If the budgeted production in Period 3 is 31,600 units and in Period 4 is 28,900 units:

What are the budgeted purchases of the raw material in Period 3? .......................Kg.

What is the budgeted cost of the raw material usage requirement in Period 4? ...............$

The single product manufactured by Allegrop Co requires 2.5 kg of a single raw material per unit of product. The material costs $9.00 per kg.

Budgets are being prepared and the following additional information is available:

(2) Opening inventory of finished goods in each period is budgeted to be 25% of the budgeted sales demand in that period.

(3) Opening inventory of raw material in each period is budgeted to be one third of the budgeted material usage in that period.

It is possible that raw material availability will be restricted to 75,000 kg per period.  If this situation arises, 75,000 kg of the material will be purchased and used in each period.  Any sales demand not satisfied in a period would be lost.

Assume that the restriction on raw material supply occurs throughout the budget period and that there would be no inventory of raw material or finished goods at the beginning of Period 1.  In this circumstance:

What would be the finished goods inventory at the end of Period 2?

The single product manufactured by Allegrop Co requires 2.5 kg of a single raw material per unit of product. The material costs $9.00 per kg.

Budgets are being prepared and the following additional information is available:

(2) Opening inventory of finished goods in each period is budgeted to be 25% of the budgeted sales demand in that period.

(3) Opening inventory of raw material in each period is budgeted to be one third of the budgeted material usage in that period.

It is possible that raw material availability will be restricted to 75,000 kg per period.  If this situation arises, 75,000 kg of the material will be purchased and used in each period.  Any sales demand not satisfied in a period would be lost.

Which of the following may enable Allegrop Co to increase output?

(1) Introduce a perpetual inventory system

(2) Introduce continuous stocktaking

(3) Use raw material more efficiently

(4) Take advantage of settlement discount

Kidling Co uses a standard marginal costing system for cost control of its single product. The standard cost card for the product is: 

Direct material - 2.5 kg at $12.60 per kg - 31.50

Direct labour - 2 hours at $11.20 per hour - 22.40

Variable production overhead - 8.80

62.70

Fixed production overheads are budgeted at $160,200 per month.

Actual results for the month just ended included:

Calculate the following variances:

1. Direct material price

2. Direct material usage

3. Direct labour efficiency

4. Total variable production overhead

5. Fixed production overhead expenditure

Kidling Co uses a standard marginal costing system for cost control of its single product. The standard cost card for the product is:

Direct material - 2.5 kg at $12.60 per kg - 31.50

Direct labour - 2 hours at $11.20 per hour - 22.40

Variable production overhead - 8.80

62.70

Fixed production overheads are budgeted at $160,200 per month.

Actual results for the month just ended included:

The direct labour rate variance in the month just ended was $1,908 favourable.

What was the total direct labour cost in the month?

The following information, for the year to 31 December 20X9, is available for Fun Co which operates in the toys and games industry.

The cost of capital of Fun Co is 12% per annum.

Fun Co sold 350,000 units in the year ended 31 December 20X9. Total sales for the toys and games industry for the year were $61,280,000.

Calculate the following performance measures for Fun Co for the year ended 31 December 20X9:

Operating profit margin (to one decimal place) - ....%

Asset turnover (to one decimal place) - .....times

Return on investment (to one decimal place) - ....%

Residual income (to nearest $'000) - ....$'000

Market share (to one decimal place) - ...%

The following information, for the year to 31 December 20X9, is available for Fun Co which operates in the toys and games industry.

The cost of capital of Fun Co is 12% per annum.

Fun Co sold 350,000 units in the year ended 31 December 20X9. Total sales for the toys and games industry for the year were $61,280,000.

Return on investment (ROI) and residual income (RI) are both measures of investment performance.

Does each of the following statements describe a feature of ROI only, RI only, both ROI and RI or neither of the two measures?

1. Facilitates the comparison of performance of business units of different size

2. Provide(s) a relative measure of investment performance

3. Based on profit rather than cash flow

4. Ensure(s) that managers will select investment projects with positive NPV

The following information, for the year to 31 December 20X9, is available for Fun Co which operates in the toys and games industry.

$'000

Sales - 7,660

Gross profit - 1,200

Operating profit - 590

Capital employed - 3,330

Current assets - 400

The cost of capital of Fun Co is 12% per annum.

Fun Co sold 350,000 units in the year ended 31 December 20X9. Total sales for the toys and games industry for the year were $61,280,000.

Return on investment (ROI) and residual income (RI) are both measures of investment performance.

An analyst has calculated the following ratios for Fun Co for comparison with the toys and games industry average.

Complete the following commentary on Fun Co's performance relative to the industry average.

1. Fun Co's liquidity is ............ than the industry average.

2. Its capital gearing is ................ than the industry average.

3. Its ability to service its loans is ............. than the industry average, which could mean that Fun Co is having a ................... level of profitability than the industry average