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CAPE Accounting Unit 2 Paper 1 2014
CAPE Accounting Unit 2 Paper 1 2014
cANnrnATE -
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Pr.FA.SF. NOTE!
Unit2-Paper0l
I hour 30 minutes
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| This test consists of 45 items. You will have I hour and 30 minutes to answer them.
3. Do not be concerned that the answer sheet provides spaces for more answers than there are
items in this test.
4. Each item in this test has four suggested answers lettered (A), (B), (C), (D). Read each item
you are about to answer and choose the correct answer.
5. On your answer sheet, find the number which corresponds to your item and shade the space
having the same letter as the answer you have chosen. Look at the sample item below.
Samole ltem
Tlre best answer to this item is "allocation of overhead costs to products", so answer space
(C) has been shaded.
6. lf you want to change your answer, erase it completely before you fill in your new choice.
7. When you are told to begin, turn the page and work as quickly and as carefully as you can.
lf you cannot. answer an item, go on to the next one. You may return to this item Iater. Your
score will be the total number of correct answers.
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8. You may do any rough work in this booklet.
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9. You rnay use a silent. non-programmable calculator to answer items.
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I DO NOT TURN THIS PAGB UNTIL YOU ARE TOLD TO DO SO.
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I Copyright O 2012 Caribbean Examinations Council
2. One MAJOR difference between financial
l. Which of the flollowing statements relating
accounting and management accounting is
to cost and management accounting is
that
accurate?
4. lnwhichofthefollowingwaysshouldplasticthatisusedinthemanufactureofdoIlsbeclassified?
No
(A) No Yes Yes
No
(B) Yes No Yes
No
(c) Yes Yes Yes
Yes
(D) Yes Yes No
J. Thefo|lowinginformationwasextractedfromthebooksofJameslnc.
$107 000
Cost of goods sold
Ending balance of finished goods inventory
$ 20 000
Cost of goods manufactured
s s7 000
goods inventory for the Period.
Calculate the beginning balance of finished
(A) $ 70 000
(B) s 77 000
(c) $127 000
(D) $157 000
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8. Susan f nc. is patd lOohofthe gross sales of Items 11-12 refer to the following
her department as her compensation each information from Preysal Company on an
month. Susan Inc. received $15 000 each item of inventory for the month of April.
month for the last three months. Which
of the fbllowing methods BEST describes Beginning inventory 500 units at $6.00 each
how Susan Inc. is paid?
Purchases during the month:
(A) Commission
April0T 600 units at $6.10 each
(B) Fixed salary
April l2 800 units at 55.80 each
(C) Piece rate
April 17 500 units at $6.25 each
(D) Individual bonus
April22 250 unis at $6.00 each
April28 100 units at $5.50 each
(A) Both utilize the.iob cost sheet. (A) Each department is a different
(B) Costs are accum u lated bY activity in activ ity-based costing.
depanments. (B) M u ltiple cost drivers may be uti lized
(C) Both are used to collect the cost of- within a department in activitY-
production. based costing.
(D) Costsareaccunrulatedbyindividual (c) ;\ single cost driver is utilized irr
jobs. every department in activitY-
based costing.
(D) Overhead application rates can
19. Ashley Company uses a job order costing be based on direct labour in
system. Overheads are applied to jobs on traditional costing sYstems.
the basis of direct labour hours at a rate of
$20 per direct labour hour.
(A) $4 800
(B) Ss 000
(c) $7 000
(D) 58 8oo
Castries Inc. uses an activity-based costing system. The company's purchasing department incurs
costs of$550 000 peryear. Information relating to THREE major activities are as follows:
During the year in the department, 50 000 phone calls were made, l5 000 purchase orders were
issued-and iO Ooo shipments were received. Product A required 2 000 phone calls, | 500 receiving
reports and 500 purchase orders.
2t. The total cost for purchase orders allocated 23. The total cost assigned to product A is
to product A is
(A) $ 40 2s0
(A) $l 000 (B) $ 95 7s0
(B) $s 000 (c) $r36000
(c) $6 ooo (D) $22s 000
(D) $e 0oo
(A) $ 262s0
(B) $ 61 250
(c) $ 70 000
(D) $l7s 000
24. peterwants to identify the total cost fbrcomputing the personal tax return he prepared for his client'
Labour is the only direct cost at $ I 50 per hour. Indirect costs are $80 per labour hour.
What is
preparing the tax
the total direct cost, indirect cost, and job cost respectively, if 8 hours are spent
return?
ZS. The basic difference between marginaland 27. Both absorption (full) costing and variable
absorption costing is the treatment of
:ff:1i::?;i:il-.,j:,"::''ectmateriarcost
(A) direct labour cost
(B) direct material cost (A) fixed cost
(C) fixed, selling and administration (B) sunk cost
cost (C) Period cost
(D) fix6d manufacturing overhead cost ( D) product cost
28. Young Corporation has the following costs associated with the manufacture of one of its products.
During 2013, Young Corporation manufactured 50 000 units and sold 48 000. Under absorption
costing, the standard production cost per unit for 2013 was
(A) $ 7.30
(B) $ | 1.30
(c) $l l.ss
(D) $13.0s
29. A service organization would MOST likely 30. Imran worked t hours on Job E. His regular
use a predetermined overhead rate based on rate is $7 per hour. Job E required 7 hours
of regular time and 2 hours overtime at the
(A) direct labour prem i um rate of 50%o above the regu lar rate.
(B) machine hours What was the cost of direct labour appliec
(C) number of complaints to Job E?
(D) standard material cost
(A) $56.00
(B) 563.00
(c) $70.00
(D) $94.s0
Items J2-34 ret'er to the fbllowing J5. A product has a selling price of $ 150 and a
information. variable cost of$30. The company has fixed
costs of $30 000. What is the breakeven
Nash Sports i,td sells football kits. Ten per point in units?
centofits sales are cash transactions and the
remainder is on one month's credit. Nash (A) 2s0
Sports Ltd gets one month's credit on all (B) 7s0
purchases made. Sales and purchases for (c) | 000
December20 I 2, January 20 I 3 and February (D) | 2s0
2013 arc as follows:
(A) s l6 000
(B) $22 s00
(c) $24 soo
(D) '$27 000
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Item 37 refers to the following information.
Budgeted Actual
38. A large unanticipated reduction in property Items 39-40 refer to the following
taxes on a company's factory would, all information.
otherthings being equal, MOST I ikely cause
Mary makes homemade soap which she
(A) a favourable overhead spending sells at $ 100 per case. The variable cost is
variance $40 per case and fixed cost is $600.
( B) an unfavourable overhead spending
variance 39. what is the contribution margin per case?
(C) a favourable overhead volume
variance (A) $ 15
(D) an unf'avourable overhead volume (B) $ 40
variance (C) $ 60
(D) $100
(A) 6
(B) l0
(c) ls
(D) 20
.ll. The standards that allow for no machine 44. The margin of safety, a key concept of
breakdown or other work interruptions and Cost-Volume-Profit analysis' is defined as
the difference between budgeted
which require peak efficiency at all times
are referred to as
(A) sales and breakeven sales
(B) contri bution margin and stakeholder
(A) ideal standards
margin
(B) normal standards
(C) (c) contribution margin and breakeven
practical standards
contribution
(D) budgeted standards
(D) contribution margin and actual
contribution margin
42. The Net Present Value and lnternal Rate
of Rcturn methods of decision making
in capital budgeting are superior to the
45. Which of the following statements about
Payback method. This is because they standard cost is TRUE?
(A) Incremental
(B) Payback period
(c) Net present value
(D) Accounting rate of return
END OF TEST