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NEW QUESTION 43
FL uses an absorption costing system. The overhead absorption rate for production overheads is $8.60 per direct labour hour.
Budgeted production overhead costs for the year were $473,000 and actual costs incurred were $468,000.
56,000 labour hours were used.
Which ONE of the following statements is correct?
- A. Overheads were under-absorbed by $8,600
- B. Overheads were over-absorbed by $13,600
- C. Overheads were under-absorbed by $5,000
- D. Overheads were over-absorbed by $8,600
Answer: B
NEW QUESTION 44
The materials price variance will be adverse when:
- A. The materials usage variance is favourable
- B. The actual cost of the materials is more than the standard material cost for the output produced
- C. The actual cost of the materials purchased is more than the standard cost of the materials purchased
- D. The price of materials has fallen
Answer: C
NEW QUESTION 45
The total cost of a product is £200.
In order to achieve a profit margin of 20% of sales, the selling price would have to be:
Give your answer to 2 decimal places.
Answer:
Explanation:
£250.03
NEW QUESTION 46
A company employs 28 production workers for 40 hours per week. The workers are paid $6 per hour during normal time and an overtime premium of 20%. It is anticipated that the employees will work at 95% efficiency.
Budgeted production for next week is 608 units and each unit requires 2 direct labour hours.
What is the direct labour cost budget for the week?
- A. $7,872
- B. $7,680
- C. $6,973
- D. $7,411
Answer: A
NEW QUESTION 47
Which of the following are not examples of intangible and nonfinancial factors in decision making? (Select ALL that apply.)
- A. Return on investment
- B. Government regulations
- C. Competitor reaction
- D. Employee morale
- E. Profitability ratios
- F. Market share
Answer: A,E,F
NEW QUESTION 48
Refer to the exhibit.
A company has the following budget information for next year:
The raw materials usage budget for the years is:
Answer:
Explanation:
$170800
NEW QUESTION 49
Assume that a unit of output is the cost object. Which of the following statements is valid?
- A. Materials consumed in the maintenance of machinery used to manufacture several different products are an example of a direct material cost.
- B. The salaries of supervisors who oversee the manufacture of several different products are an example of a direct labour cost.
- C. Royalties paid on a per unit basis are an example of an indirect expense.
- D. Rent paid for a factory in which several different products are produced is an example of an indirect expense.
Answer: C
NEW QUESTION 50
Refer to the exhibit.
- A. £250 adverse
- B. £250 favourable
- C. £260 favourable
- D. £260 adverse
- E. Fabex Ltd. manufactures a household detergent called "Clear". The standard data for one of the chemicals used in production (chemical XTC) is as follows:
(a) 50 litres used per 100 litres of 'Clear' produced
(b) Budgeted monthly production is 1000 litres of 'Clear'.
The closing inventory of chemical XTC for November valued at standard price was as follows:
Actual results for the period during December were as follows:
(a) 500 litres of chemical XTC was purchased for £1300.
(b) 550 litres of chemical XTC was used.
(c) 900 litres of 'Clear' was produced.
It is company policy to extract the material price variance at the time of purchase.
What is the total direct material usage variance (to the nearest whole number)?
Answer: E
NEW QUESTION 51
Which of the following categories of costs is the most relevant for decision making?
- A. Costs already incurred which are known with certainty
- B. Estimated future costs
- C. Current costs
- D. Notional costs
Answer: B
NEW QUESTION 52
Refer to the exhibit.
A company operates a process costing system. The following data relates to Process X for the month of September.
Normal loss is 5% of input and all losses occur at the end of the process.
The number of equivalent units, using an average cost basis of valuation, was:
Conversion:
Answer:
Explanation:
39200
NEW QUESTION 53
The forecast per unit for a new product are as follows:
The company uses margin cost plus pricing and all products are required to achieve a 40% margin.
What would be the selling price per unit?
- A. $55.00
- B. $37.80
- C. $45.00
- D. $46.20
Answer: A
NEW QUESTION 54
Refer to the exhibit.
A proposal to purchase a new packing machine contains the following estimates.
In addition it is estimated that a supervisor who is currently paid a salary of $30,000 will spend 5% of their time overseeing the operation of this machine.
The cost of capital is 16%.
The net present value (NPV) for the investment in the machine is closest to
- A. $50,181
- B. $53,550
- C. $10,876
- D. $51,627
Answer: B
NEW QUESTION 55
Variable costs can best be described as:
- A. Costs that vary with a measure of activity
- B. Costs that fluctuate widely
- C. Uncontrollable costs
- D. Costs that are not affected by changes in the level of activity
Answer: A
NEW QUESTION 56
The following is an extract from a budgetary control report for the latest period.
The budget variance from prime cost is:
- A. $3,260 adverse
- B. $3,340 adverse
- C. $18,580 adverse
- D. $3,260 favourable
Answer: C
NEW QUESTION 57
When sales and output have passed the break-even point, the contribution per unit, for each unit then sold, becomes:
- A. The profit per unit
- B. The margin of safety
- C. Bigger
- D. Smaller
Answer: A
NEW QUESTION 58
The variable cost of a product is £7 per unit. The fixed costs of the product are £140,000. The break-even point is 70,000 units.
The selling price of the product is:
Give your answer to 2 decimal places.
Answer:
Explanation:
£9.03
NEW QUESTION 59
Refer to the exhibit.
X Enterprises runs a private nursing home for the elderly. The company are concerned that bed occupancy rates have been falling over the past 2 years with a consequential effect on profit. They have drawn up a budget for next year as follows:
The nursing home currently charges $90 per patient day.
Based on the budgeted figures and the current charge per day, what would be the break-even point in patient days?
- A. 6,215
- B. 1,822
- C. 2,523
- D. 4,489
Answer: A
NEW QUESTION 60
The International Federation of Accountants (IFAC) stated that it was important that "accountants in business" should understand what the drivers of stakeholder value are. Which of the following statements is valid?
- A. Anyone with an interest in an organisation can be considered to be one of its stakeholders.
- B. Stakeholders must be external to the organisation.
- C. Only an organisation's shareholders can be considered to be its stakeholders.
- D. Only an organisation's shareholders and employees can be considered to be its stakeholders.
Answer: C
NEW QUESTION 61
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