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Acca F2 Management Accounting Mock Test Dec 2008 Prepared By: Ben Lee
Acca F2 Management Accounting Mock Test Dec 2008 Prepared By: Ben Lee
Acca F2 Management Accounting Mock Test Dec 2008 Prepared By: Ben Lee
Management Accounting
Mock test
Dec 2008
Prepared by: Ben Lee
Question 1
Taree Limited uses linear programming to establish the optimal production plan for the
production of its two products, A and U, given that it has the objective of minimising costs. The
following graph has been established bearing in mind the various constraints of the
business. The dotted area indicates the feasible region.
Which points are the most likely to give the optimal solution?
a) A and B only
b) B, D and E only
c) D and E only
d) A, B and C only ( )
2 marks
Question 2
On the first day of a particular period, a company has 300 units of its products in stock, valued at
$3,080. During the period, the following purchases and sales of this product took place:
What is the gross profit for the month using the weighted average method of pricing stock issue?
Ans :___$ ___
2 marks
Question 3
Question 4
a) A stores ledger account will be updated from a goods received note only
b) The term 'lead time' is best used to describe the time between receiving an order and paying
for it
c) Authorisation is required to make an issue from stores
( )
1 marks
Question 5
Balcombe has recorded the following costs over the last six months:
A production department absorbs overhead using a machine hour basis. Overhead allocated to the
department in a period are $39,630 with a further $51,570 re-apportioned from the service
departments in the factory. 480,000units of product are manufactured at 60 units per machine hour.
Question 7
Hill Limited sells a single product. In the coming month, it is planned that this product will
generate a total revenue of $300,000 with a total contribution of $125,000. Fixed costs are
$100,000 per month.
a) 20%
b) 30%
c) 40% ( )
1 marks
Question 8
If a salesman is paid a basic salary plus commission for each sale made, what is the best description
of this labour cost?
Question 9
The order quantity of a raw material is 450 kg. A safety stock of 120 kg is planned to be held, the
annual stock holding cost of the material is $4 per kg and total purchases in a year are 3,000 kg.
Ans :__$ _
2 marks
Question 10
Bumblebee Limited absorbs fixed overhead costs on a unit basis. For the year just ended,
Bumblebee's fixed overhead expenditure was budgeted at $150,000 but was actually $148,000.
The budgeted production level was 30,000 units and 29,000 units were actually manufactured.
a) Fixed overheads were over-absorbed by $3,000, being partly the difference between
budgeted and actual expenditure and partly the production shortfall of 1,000 units
b) Fixed overheads were under-absorbed by $5,000, being the difference between budgeted
expenditure and 29,000 units at $5 per unit
c) Fixed overheads were under-absorbed by $5,000, being the difference between budgeted and
actual production at $5 per unit
d) Fixed overheads were under-absorbed by $3,000, being partly the difference between
budgeted and actual expenditure and partly the production shortfall of 1,000 units
( )
2 marks
Question 11
a) To control overheads
b) To charge overheads to products
c) To share out common costs to cost centres that benefit from them
( )
1 marks
Question 12
A company operates a piecework system of remuneration but also guarantees its employees 85% of
a time based rate of pay, based on $8.00 per hour for an eight hour working day. The standard time
allowed to produce one unit of output is four minutes. Piecework is paid at the rate of $0.12 per
standard minute.
If an employee produces 120 units, on a particular day when eight hours were worked. What is the
employee’s gross pay for that day ( to one decimal place)?
Ans :___$ __
2 marks
Question 13
a) Two or more products output from the same process which have significant sales value but
which are indistinguishable up to the point of separation
b) Two or more products output from a process which require further processing before being
completed and available for sale
c) Two or more products output from a process recognised by a relatively low sales value
compared to the main output produced
( )
1 marks
Question 14
A company carry out work to customer order. A job costing system is used to collect production
cost on each customer order. Non production overhead are applied to each job at 15% of total
production cost.
The following information relates to job ABC which has been completed by the company.
Department X Y
Direct material used ( $ ) 6,700 1,260
Direct labour hour worked 246 98
Direct labour rate $ per hour 8.00 10.00
Production overhead $ per direct labour hour 12.00 12.00
Question 15
Which department would normally be responsible for completing a standard purchase requisition
for goods in a service organisation?
Which one of the following groups of workers would be classified as indirect labour?
a) Machinists in an organisation manufacturing clothes
b) Bricklayers in a house building company
c) Maintenance workers in a shoe factory
d) Assembly workers in a vehicle manufacturing business
( )
2 marks
Question 17
Profit for a period using marginal costing is $25,100, finished goods stock are:
What is the profit using absorption costing where the fixed production overheads are applied at $8
per unit?
Ans :___$ _
2 marks
Question 18
Total production cost of $149,700 were incurred in the manufactures of 68,000units in a period.
These costs reduce by $14,400 when output is reduced to 58,000 units.
Question 19
A company determines its order quantity for a raw material by using the Economic Order Quantity
(EOQ) model.
What would be the effects on the EOQ and the total annual holding cost of a decrease in the cost of
ordering a batch of raw material?
EOQ Total annual holding cost
a) Higher Lower
b) Higher Higher
c) Lower Higher
d) Lower Lower ( )
2 marks
Question 20
Question 21
Which of the following would be likely be a cost driver for the amount of direct materials used?
a) The number of units sold.
b) The number of direct labor hours worked
c) The number of machine hours worked
d) The number of units produced
( )
2 marks
Question 22
Quality Appliance produces washers and dryers in an assembly-line process. Labor costs incurred
during a recent period were: corporate executives, $100,000; assembly-line workers, $60,000;
security guards, $11,000;and plant supervisor, $18,000. The total of Quality’s direct labor cost was:
a) $60,000
b) $71,000
c) $78,000
d) $89,000
( )
2 marks
Question 23
“Pumpkin enterprises began operations on January 1,19x7, with all its activities conducted from a
single facility. The company’s accountant concluded that the year’s building depreciation should be
allocated as follows: selling activities, 20%; administrative activities, 35%; and manufacturing
activities, 45%. If pumpkin sold 60% of 19x7 production during that year, what percentage of the
depreciation would appear (either directly or indirectly) on the 19x7 income statement?
a) 27%
b) 45%
c) 55%
d) 82%
( )
2 marks
Question 24
If a company sells goods that cost $70,000 for $82,000, the firm will:
a) reduce Finished-Goods Inventory by $70,000.
b) reduce Finished-Goods Inventory by $82,000
c) reduce Cost of Goods sold by $70,000
( )
1 marks
Question 25
Treetops worked on four jobs during its first year of operation: nos 401, 402, 403 and 404. Nos. 401
and 402 were completed by year-end, and no. 401 was sold at a profit of 40% of cost. A review of
job no 403’s cost sheet revealed direct material charges of $20,000 and total manufacturing costs of
$25,000. If Treetops applies overhead at 150% of direct labor cost, the overhead applied to job no.
403 must have been:
a) $0
b) $2,000
c) $3,000
d) $3,333
( )
2 marks
Question 26
I Actual overhead rates result in more accurate but less timely information
II Predetermined overhead rates result in less accurate but more timely information
III Predetermined overhead rates tend to smooth product costs over time.
a) I, II and III
b) I and II only
c) I and III only
d) II and III only
( )
2 marks
Question 27
Flagston company uses a weighted-average process-costing system. Company records disclosed that
the firm completed 100,000 units during the month and had 20,000 units in process at month-end,
25% complete. Conversion costs related to the beginning work-in-process inventory amounted to
$105,000, and amounts incurred during the current month totaled $840,000. If conversion is
incurred uniformly throughout manufacturing, Flagston’s equivalent-unit cost is
a) $7.00
b) $7.88
c) $8.40
d) $9.00
( )
2 marks
Question 29
Which of the following is the proper sequence of events in an activity-based costing system?
Question 30
a) Least-squares regression
b) High-low method
c) Linear programming
d) Visual fit method
( )
2 marks
Question 31
Yang manufacturing, which uses the high-low method, makes a product called Yin. The company
incurs three different cost types (A, B and C) and has a relevant range of operation between 2,500
units and 10,000 units per month. Per-unit costs at two different activity levels foe each cost type
are presented below.
Question 32
Atlanta Inc, which uses the high-low method to analyze cost behavior, has determined that machine
hours best explain the company’s utilities cost. The company’s relevant range of activity varies
from a low of 600 machine hours to a high of 1,100 machine hours, with the following data being
available for the first six months of the year:
Using the high-low method, the utilities cost associated with 980 machine hours would be:
a) $9,510
b) $9,660
c) $9,700
d) $9,790
( )
2 marks
Question 33
Which of the following would depict the logical order for preparing (1)a production budget, (2)a
cash budget, (3)a sales budget, and (4)a direct-labor budget?
a) 1-3-4-2
b) 2-3-1-4
c) 3-1-4-2
d) 3-1-2-4 ( )
2 marks
Question 34
Question 35
In which cost classification would the amount of overtime premium contained in direct wages
normally appear?
Question 36
Thomas recently completed 24,000 units of a product that was expected to consume five pounds of
direct material per finished unit. The standard price of the direct material was $6 per pound. If the
firm purchased and consumed 110,000 pounds in manufacturing (cost=$605,000), the direct-
materials quantity variance would be figured as:
a) $55,000 Favourable
b) $60,000 Favourable
c) $115,000 Favourable
d) $60,000 Unfayourable
( )
2 marks
Question 37
Question 38
Question 39
Callison’s income under absorption costing was $15,000 higher than under variable costing. During
the year, the company met anticipated manufacturing figures, producing 20,000 units. If total
variable production costs were $80,000 and fixed manufacturing overhead was $40,000, how many
units were sold?
a) 5,000
b) 7,500
c) 10,000
d) 12,500
( )
2 marks
Use the following information to solve questions 40 - 41
Nelson has a standard variable overhead rate of $4 per machine hour, and each unit produced has a
standard time allowed of three hours. The company’s static budget was based on 50,000 units.
Actual results for the year follow.
Question 40
a) $40,000 favorable
b) $60,000 favorable
c) $20,000 favorable
d) $50,000 favorable ( )
2 marks
Question 41
a) $40,000 favorable
b) $60,000 favorable
c) $20,000 favorable
d) $50,000 favorable
( )
2 marks
Question 42
Stone Limited uses an absorption costing system, and manufactures a single product, the
Henge. Each unit of this product requires 12 labour hours to complete.
For a particular accounting period, the normal level of activity was 30,000 units, although 34,500
units were produced. Fixed overheads are absorbed on a direct labour hour rate basis at a rate of $9
per direct labour hour.
What was the under or over absorption of fixed overheads in the period?
There was no opening work in progress, and the closing work in progress was 50% complete. All
material are introduced at the start of the process and conversion takes place evenly throughout the
process. There were no losses.
What was the value of the closing work in progress for last period?
Ans :___$ ___
2 marks
Question 44
What was the conversion cost per unit for the period using FIFO method of valuation?
Ans :___$ ___
2 marks
Question 45
The economic order quantity of a raw material is 450 kg. A safety stock of 120 kg is planned to be
held, the annual stock holding cost of the material is $4 per kg and total purchases in a year are
3,000 kg.
If an assembly line supervisor is paid a salary of $100 each week, and an extra 10 cents for every
unit of production made in the week, this wage cost could be described as:
a) a fixed cost
b) a variable cost
c) a semi variable cost
( )
1 marks
Question 47
Adams Sporting Goods sells bicycles throughout the southeastern United States. The following data
were taken from the most recent quarterly sales forecast:
Expected End-of-month
Sales Target inventory
April 1,400 units 315 units
May 1,575 units 412 units
June 1,650 units 425 units
On the basis of the information presented, how many bicycles should the company purchase in
May?
a) 1,478
b) 1,562
c) 1,575
d) 1,672
( )
2 marks
Question 48
Iowa makes all sales on account, subject to the following collection pattern: 20% are collected in
the month of sale; 70% are collected in the first month after sale; and 10% are collected in the
second month after sale. If sales for October, November, and December were $70,000, $60,000, and
$50,000, respectively, what were the firm’s budgeted collections for December?
a) $10,000
b) $46,000
c) $52,000
d) $59,000
( )
2 marks
Question 49
Which of the following correlation coefficients indicates the weakest relationship between two
variables?
a) +1
b) 0.2
c) -0.7
( )
1 marks
Question 50
Clayton Corporation, which adds materials at the beginning of production , uses a weighted-average
process-costing system. Consider the data that follow.