WorksheetsFM015 PART C SET 3
Total questions: 15
Worksheet time: 8mins
Name
Class
Date
1.
1. Which of the following statements about predetermined overhead absorption rates are true?
a)
1 and 2 only
b)
1 and 3 only
c)
2 and 3 only
d)
All of them
2.
2. Last year, Bryan Air carried excess baggage of 250,000 kg over a distance of 7,500 km at a cost of $3,750,000 for the extra fuel. What is the cost per kg-km?
a)
$0.002 per kg-km
b)
$2.00 per kg-km
c)
$33.33 per kg-km
d)
$500.00 per kg-km
3.
3. The occupancy rates for a hotel over a two year periods are shown below:
a)
A The occupancy rate for Year 1 is higher than Year 2 for quarters 3 and 4
b)
B The occupancy rate for Year 2 is higher than Year 1 for quarters 1, 2 and 3
c)
C The occupancy rate for Year 2 is higher than Year 1 for all four quaters
d)
D The occupancy rate for Year 1 is higher than Year 2 for quarters 1, 2 and 3
4.
4. E8 operates a marginal costing system. For the forthcoming year, variable costs are budgeted to be 60% of sales value and fixed costs are budgeted to be 10% of sales value. If E8 were to increase the selling price by 10% and all other costs and production and sales volumes were to remain the same, what would be the effect on E’s contribution?
a)
A decrease of 2%
b)
An increase of 5%
c)
An increase of 10%
d)
An increase of 25%
5.
5. The following graph shows the wages earned by an employee during a single day:
a)
Piecework with a guaranteed minimum daily wage
b)
A straight piece rate scheme
c)
A flat rate per hour with with a premium for overtime
d)
A differential piece rate scheme
6.
6. A company manufactures Chemical X, in a single process. At the start of the month there was no work in progress. During the month 300 litres of raw material were input into the process at a total cost of $6,000. Conversion costs during the month amounted to $4,500. At the end of the month 250 litres of Chemical X were transferred to finished goods inventory. The remaining work in progress was 100% complete with respect to materials and 50% complete with respect to conversion costs. There were no losses in the process.
(a)
7.
7. Two products QW and TC are created from a joint process. QW can be sold immediately after split-off. TC requires further processing before it is in a saleable condition. There are no opening inventories and no work in progress. The following data are available for last period:
a)
$36,400
b)
$37,520
c)
$40,264
d)
$45,181
8.
8. Varo produces various inks at its Normanton factory. Production datails for Process 1 are as follows:
a)
1,250
b)
1,000
c)
850
d)
680
9.
9. In times of rising prices, the valuation of inventory using the First-In-First-Out method, as opposed to the Weighted Average Cost method, will result in which ONE of the following combinations?
a)
A
b)
B
c)
C
d)
D
10.
10. A finishing department absorbs production overheads using a direct labour hour basis. Budgeted production overheads for the year just ended were $268,800 for the department, and actual production overhead costs were $245,600. If actual labour hours worked were 45,000 and production overheads were over absorbed by $6,400, what was the overhead absorption rate per labour hour?
a)
$5.32
b)
$5.60
c)
$5.83
d)
$6.12
11.
11. A new product is being developed. The development will take one year, and the product is expected to have a life cycle of two years before it is replaced.
a)
Both statements are true
b)
Both statements are false
c)
Statement 1 is true and statement 2 is false
d)
Statement 2 is true and statement 1 is false
12.
12. A new company has set up a marginal costing system and has a budgeted contribution for the period of $26,000 based on sales of 13,000 units and production of 15,000 units. This level of production represents the firm’s expected long-term level of production. The company’s budgeted fixed production costs are $3,000 for the period.What would the budgeted profit be if the company were to change to an absorption costing system?
(a)
13.
13. in a production process the percentage completion of the work-in-progress (WIP) at the end of a period is found to have been understated. When this is corrected what will be the effect on the cost per unit and the total value of the WIP?
a)
A
b)
B
c)
C
d)
D
14.
14. Which one of the following statements is incorrect?
a)
Job costs are collected separately, whereas process costs are averages
b)
In job costing, the progress of a job can be ascertained from the materials requisition notesand job tickets or time sheet
c)
In process costing, information is needed on work passing through a process and work remaining in each process
d)
In process costing, but not job costing, the cost of normal loss will be incorporated into normal product costs
15.
15. A company could sell 100,000 units per annum of a new product at a competitive market price of $80 per unit. Capital investment of $10,000,000 would be required to manufacture the product. The company seeks to earn a return on initial capital employed of 15% per annum. Preliminary costings show that prime cost is likely to be $40 per unit.What is the target cost per unit of the new product?
a)
$34
b)
$55
c)
$65
d)
$68
100 %
