WorksheetsPricing strategies + Varinace
Total questions: 12
Worksheet time: 31mins
Which of the following organisations would zero based budgeting be best to use as its planning system?
A. Public high school with allocated budget from the government
B. Private high school with fees charged to students
C. Private sector organisation that operates in a stable market environment
D. Public listed company in construction industry
Which TWO of the following would indicate that a significant learning effect would be expected to apply?
The production process is complex
Production of the product is highly mechanised
Production is continuous
There is high labour turnover
Gemson estimates that at a price of $50 it can sell 2,000 units of its product and at a price of $40 it can sell 2,600 units of the product.
What is the price elasticity of demand, to 2 decimal places, when selling price is $50 and quantity sold is 2,000?
(a)
Which of the following statements about market skimming pricing are true?
1. It is appropriate when the price sensitivity of demand is unknown.
2. It is likely to discourage competitors from entering the market.
3. It is useful when launching a product into a competitive market.
1 only
2 only
3 only
1, 2 and 3
Which of the following statements about full cost plus pricing are true?
1.It is appropriate when fixed costs are relatively large.
2. It is appropriate for long-term pricing.
3. It will guarantee a profit is made if the budgeted sales level is achieved.
4. It will produce a price similar to what competitors are charging.
1 and 2 only
3 and 4 only
1, 2 and 3
1, 3 and 4
Using the optimal pricing approach, what should the selling price of the Quikcyc be in order to maximize profits?
A. $230
B. $332
C. $562
D. $663
Which of the basic principles of TQM sums up the idea that it costs less in the long run to prevent defective production than to employ teams of inspectors, to scrap materials or to rework shoddy output?
Prevention.
Working circles.
Employee participation.
Continuous improvement.
Which THREE of the following may be a reason why a favourable labour efficiency variance has arisen?
Higher quality material purchased
Over absorption of overheads.
Hiring of more highly skilled workforce.
Workforce motivated to perform well with higher bonuses for efficiency.
Out of date machinery resulting in delays in the production process.
Last month’s budget report for Timber Production Co revealed an adverse labour efficiency variance of $60,000
Which of the following factors would influence your decision whether or not to investigate this labour efficiency variance (more than 1 answer)
The trend in the variance.
The cost of the investigation.
The controllability of the variance.
The materiality of the variance
Which of the following circumstances best demonstrate the main reason that require planning and operational variances analysis for a manufacturing business, TH Co which produce pre-cooked food with imported ingredient?
An outbreak of unpredicted pandemic during the year that disturbed the global supply chain in material supply
TH Co operates in a highly regulated market with strong protectionism measures adopted by the government
A recent enforcement of new minimum wage act before TH Co finalise its budget
TH Co appointed a new management accountant to replace the existing management accountant who have been working with the company since its inception before TH Co finalise its budget
The following types of finished products require more than one type of material in their production:
1. Outdoor shoes
2. Carbonated drinks
3. Laptop computers
4. Cement
For which of the above finished products would it be useful for management to measure the mix and yield variances related to material cost variance?
A. 1 and 3
B. 2 and 4
C. 1, 3 and 4
D. 1, 2, 3 and 4
LO Co budgeted for 10kg of raw materials costing $18 per kg to be used in each unit of product X. A worldwide shortage of materials meant that the normal market price of raw materials rose to $22 per kg after the budget was set. LO Co’s purchasing director, however, managed to purchase raw materials at $20 per kg. 11,000 units of product X were produced in the period and material costs were $2,145,000.
What is the favourable material usage variance for product X?
(a)
