Mirchawala’s Hub Of Accountancy:

MA1:Management Information:
Mock Exam:2
Question#1:
Which of the following would be classified as external information for a business?
A. Sales analysis reports prepared by area sales managers
B. A report on consumer attitudes prepared by a market research company
C. Employee details on the payroll database
D. A safety conformance report prepared by the business safety officer
Question#2:
What is the correct cost accounting entry in an interlocking system for the payment of wages?
A. Dr Bank account Cr Wages control account
B. Dr Wages control account Cr Bank account
C. Dr Cost ledger control account Cr Wages control account
D. Dr Wages control account Cr Cost ledger control account
Question#3:
In which department is a purchase order usually prepared?
A. Purchasing department of the buying organization
B. Goods received department of the buying organization
C. Dispatch department of the supplying organization
D. Inventory stores department of the buying organization
Question#4:
Which of the following may be used as classifications for raw materials used in product manufacture?
(1)Direct cost
(2)Functional cost
(3)Variable cost
A. 1, 2 and 3
B. 2 and 3 only
C. 1 and 3 only
D. 1 and 2 only
Question#5:
The responsibilities of the manager of a business division include decisions relating to long-term assets.
What type of responsibility centre is described above?
A. Revenue centre
B. Cost centre
C. Investment centre
D. Profit centre
Question#6:
Each unit of product P requires 1.6 kg of material M. A purchase order is to be placed for material M
sufficient to provide for the manufacture of product P for the next two months and for 520 kg or
material M to remain in inventory at the end of month 2.
460 kg of material M is in inventory at the beginning of month 1 and manufacture of product P will be as
follows:
Month 1 400 units
Month 2 560 units
What is the size of the purchase order that must be placed for material M?
A. 1,596 kg
B. 1,476 kg

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C. 1,536 kg
D. 1,480 kg
Question#7:
A piecework scheme of labour remuneration applies to all direct workers in a factory. The scheme for
each individual is as follows:
$
Up to 250 units produced in a week 14per unit
Between 251 and 300 units produced in a week 17per unit
Over 300 units produced in a week 20per unit
Only the additional units produced qualify for the higher rates. Units that fail inspection do not qualify
for any payment.
Direct worker X produced 320 units in week 4 but 30 units failed inspection.
What wages were paid to direct worker X in week 4?
A. $4,180
B. $6,400
C. $4,750
D. $4,930
Question#8:
A factory cost centre absorbs overhead on the basis of machine hours. In a period the budgeted
overhead costs and budgeted activity in the cost centre were $144,000 and 4,100 machine hours
respectively. Actual overhead costs and actual activity in the period were both below budget at
$142,600 and 3,950 machine hours respectively.
What was the predetermined overhead absorption rate per machine hour (to the nearest $0.01)?
A. $36.46
B. $36.10
C. $35.12
D. $34.78
Question#9:
A trainee accountant is receiving some spreadsheets, and he has asked you to look at the following:

What is being highlighted about the entry for October?

A. That it is a precedent for the total
B. That it contains a circular reference
C. The formula used to calculate the monthly total is different to the formulas used in other months
D. The figure has recently been deleted

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Question#10:
When using Excel spreadsheets which of the following can be protected?
(1)Individual cells
(2)A range of cells within a worksheet
(3)An entire worksheet
A. 1 and 2 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2 and 3
Question#11:
Which of the following statement(s) regarding weighted average methods of raw material pricing
is/are TRUE?
(1)The periodic weighted average method requires the recalculation of the issue price after each issue is
made
(2)Fluctuations in issue price are reduced if the cumulative, rather than the periodic, weighted average
method is used
A. Both statements are false
B. Statement 1 is false and statement 2 is true
C. Statement 1 is true and statement 2 is false
D. Both statements are true
Question#12:
ABC Co made the following purchases of material X:
Units Price ($)
1 January 20X1 500 1.50
1 February 20X1 1,000 2.00
1 March 20X1 750 2.50
1 April 20X1 500 1.50
1 May 20X1 1,500 2.00
1 June 20X1 750 3.00
On 1 July 20X1 the company used 2,000 units of material X.
Using the first-in first-out (FIFO) method of inventory valuation, what is the value of the 2,000 units of
inventory used on 1 July 20X1?
A. $4,000
B. $6,000
C. $4,750
D. $3,000
Question#13:
Zed Co uses process costing for product Alpha.
Production began on 1 September and there was no work-in-progress brought forward. During the
production period 600 kg of raw material were input to the process and 200 kg of the finished product
were output from the process.
At the end of the period work-in-progress was 80% complete with respect to materials and 60%
complete with respect to conversion costs.
During the production process no losses occurred.
What are the equivalent units for materials at the end of the production period?
A. 440 kg
B. 520 kg
C. 600 kg

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D. 560 kg
Question#14:
A member of the sales team is compiling a spreadsheet to show the value of discounts given to a
customer, as follows:

Which of the following formulae could be entered into cell C6 and then copied down to give the
correct discount figures for all the months under review?
A. =B6*B$3
B. =B6*$B3
C. =B$6*B$3
D. =$B6*$B3
Question#15:
Liz wishes to create an Excel formula which multiplies the contents of cell A1 with the total contents of
cells B1, B2, B3, B4 and B5.
Which of the following shows a formula Liz could use?
A. A1*SUM(B1:B5
B. =A1*SUM(B1:B5)
C. =A1*B1+B2+B3+B4+B5
D. =A1*AVERAGE(B1:B5)
Question#16:

Which of the following is the most appropriate formula to enter into cell B6?
A. =B8/1.8
B. =B4*B11
C. =B4+20%
D. =B8-B4
Question#17:
The following relate to computer data processing:
(1)It involves transactions being grouped and stored prior to processing
(2)It involves transactions being input and processed as they occur
(3)It is quicker than manual data processing
(4)A system will not always be up-to-date
Which of the above is/are true of real time computer data processing?

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A. 1, 3 and 4
B. 2 and 3
C. 1 and 4 only
D. 2 only
Question#18:
Which, if any, of the following are ADVANTAGES of having a centralised office function?
(1)Junior managers have more opportunities to take on responsibility
(2)Expensive equipment can be used more economically
A. Both 1 and 2
B. 2 only
C. Neither 1 nor 2
D. 1 only
Question#19:
Which of the following is MOST likely to be a task of the accounts department?
A. Setting the sales budget
B. Paying suppliers' invoices
C. Negotiating prices and discounts with suppliers
D. Establishing procedures for hiring staff
Question#20:
Which of the following is NOT a requirement of useful management information?
A. Complete
B. Cost beneficial
C. Budgeted
D. Timely
Question#21:
The following information is provided for component X:
(1)2,400 units are in the stores
(2)6,700 units are on order
(3)1,600 units are scheduled for use
What is the amount of 'free' inventory?
A. 800 units
B. 2,400 units
C. 10,700 units
D. 7,500 units
Question#22:
A company manufactures motor vehicles. In the accounts' coding system, the code for a particular
vehicle model is Ve/26 and the code for the passenger door in that model is Ve/26/12.
Using the same coding structure, which of the following could represent the code for the panel in the
passenger door of that particular vehicle model?
A. Ve/26/12/08
B. Ve/29
C. Ve/26/15
D. Ve/27/12

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Question#23:
The following information shows the power costs and supervision costs incurred by an organisation at
different levels of capacity utilisation.
Capacity utilization 70% 80% 90% 100%
Power ($'000) 36 39 42 45
Supervision ($'000) 23 25 25 25
What cost behavioural classifications can be identified?
A. Power: variable Supervision: stepped-fixed
B. Power: semi-variable Supervision: stepped-fixed
C. Power: semi-variable Supervision: fixed
D. Power: variable Supervision: fixed
Question#24:
A business has a net profit margin of 12.0% and asset turnover of 1.4 times.
What is the return on capital employed?
A. 8.60%
B. 13.40%
C. 11.70%
D. 16.80%
Question#25:
In a cost accounting system, what would be the entry for the issue of INDIRECT materials to a
production cost centre?
A. Dr Work in progress account Cr Raw materials account
B. Dr Raw materials account Cr Production overhead account
C. Dr Raw materials account Cr Work in progress account
D. Dr Production overhead account Cr Raw materials account
Question#26:
An employee has a normal working week of 40 hours paid at a basic rate of $10 per hour. Hours in
excess of normal are paid at a premium of 30%.
In a particular week the employee worked for 44 hours. Tax is payable at 20% of gross wages and
benefit contributions for the employee for the week were as follows:
$
Employee 25
Employer 37
The employee's net pay for the week was $336.60.
What was the employee's gross pay for the week?
A. $452.00
B. $498.25
C. $492.00
D. $478.32
Question#27:
Budgeted production overheads, allocated and apportioned to the four cost centres in a
factory for a period, are as follows:

Production cost centres Service cost centres

PCC1 ($) PCC2 ($) Stores ($) Maintenance ($)
28,600 21,800 6,200 8,160

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Material requisitions and maintenance hours in the period are budgeted to be as

follows:

Material requisitions Maintenance hours

PCC1 300 80
PCC2 200 90
What is the total budgeted overhead in PCC2 after re-apportionment of service cost centre
overheads?
A. $28,600
B. $29,360
C. $35,400
D. $36,160
Question#28:
Jane works for XYZ Co. She has created a spreadsheet which lists contact details for all XYZ Co's clients.
Which spreadsheet functions should Jane use to display details for all clients based in the South region
in alphabetical order?
A. Ranking and linking
B. Filtering and ranking
C. Sorting and ranking
D. Filtering and sorting
Question#29:
What, in the use of spreadsheets, is known as a cell?
A. The intersection of a row and a column
B. The formula placed in a particular location
C. The formatting of numbers
D. A workspace divided into rows and columns
Question#30:
At the end of its financial year, a manufacturing company has the following materials held in inventory:
(1)100 toy cars which are complete but require packaging prior to being sold or dispatched
(2)One ton of plastic which will be moulded into various products
Which of the following is the correct classification for the toy cars and the plastic?
A. Both the toy cars and the plastic are work in progress
B. Toy cars are finished goods and the plastic is work in progress
C. Toy cars are finished goods and the plastic is raw material
D. Toy cars are work in progress and the plastic is raw material
Question#31:
Which of the following items would be included in a job cost separately?
(1)Cost of sales
(2)Direct labour
(3)Selling overhead
(4)Profit
A. 1 only
B. 2 and 3 only
C. 1, 3 and 4 only

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D. 2, 3 and 4
Question#32:
Daz Co uses process costing and a number of separate processes:
(1)Process Alpha has losses of 5% of input
(2)Process Beta has losses of 3% of input
Both processes have the same inputs.
Which of the following statements is/are true in relation to these processes?
(1)The Alpha total process cost is the same as the Beta total process cost
(2)The Alpha cost per unit is higher than the Beta cost per unit
A. Neither statement 1 nor statement 2
B. Both statement 1 and statement 2
C. Statement 2 only
D. Statement 1 only
Question#33:
Which of the following is/are the main benefits of spreadsheets to the work of management
accountants?
(1)The ability to embed files produced using word processing software
(2)Linking of spreadsheets so that changes in data automatically feed from one page to another
(3)The facility to perform 'what if' calculations
A. 1, 2 and 3
B. 3 only
C. 2 and 3 only
D. 1 and 2 only
Question#34:
The following statements are about documentation for direct materials requests:
(1)A materials requisition is completed after materials have been received by the production
department
(2)The buyer prepares a purchase order to ask for goods to be supplied
Are the statements true or false?
A. Statement 1 is false and statement 2 is true
B. Both statements are true
C. Both statements are false
D. Statement 1 is true and statement 2 is false
Question#35:
There is an error in cell J3 of this spreadsheet:

Which of the following formulae could have caused this error?

A. =I3/H4
B. =I3/I3
C. =I3/H2
D. =I3/H3

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Question#36:
Which of the following statement(s) about information is/are TRUE?
(1)Information is data that has been processed in such a way as to be meaningful to the recipient
(2)The purpose of management information is to assist the efficient and effective management of
resources
A. Statement 2 only
B. Neither statement 1 nor statement 2
C. Statement 1 only
D. Both statement 1 and statement 2
Question#37:
Which of the following statement(s) concerning the use of codes is/are TRUE?
(1)The classification of costs is simplified
(2)Electronic data processing is facilitated
A. Both statement 1 and statement 2
B. Statement 1 only
C. Statement 2 only
D. Neither statement 1 nor statement 2
Question#38:
The packaging section in a warehouse operates a piecework payment system as follows:
Units packed Piecework rate
per unit ($)
1 to 5,000 0.04
5,001 to 8,000 0.05
8,001 and above 0.06
Only additional units packed, over the previous threshold, are paid at the higher rates.
If 8,340 units are packed, what are the wages?
A. $367.00
B. $370.40
C. $420.40
D. $500.40
Question#39:
The following statements relate to absorption and marginal costing:
(1)Absorption costing profit will always be higher than marginal costing profit in any period when
inventory is increasing
(2)Inventory valuations will always be greater if absorption costing rather than marginal costing is used
Which of the statement(s) is/are TRUE?
A. Statement 1 only’
B. Both statement 1 and statement 2
C. Statement 2 only
D. Neither statement 1 nor statement 2
Question#40:
Which of the following may be used to measure performance in a profit centre?
(1)Net profit margin
(2)Residual income
(3)Return on capital employed
(4)Asset turnover
A.1, 2, 3 and 4
B. 2, 3 and 4 only

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C. 1 and 4 only
D. 1 only
Question#41:
What is a cost unit?
A. The unit cost of direct materials and direct labour
B. The cost per unit of output
C. A unit of output in relation to which costs are ascertained
D. A basis for cost classification
Question#42:
A company manufactures product Z. A team of six direct operatives currently manufactures five units of
the product in one hour. Each operative is paid at $8 per hour.
If productivity (output per hour) reduces by 10%, what will be the direct labour cost per unit of
product Z (to two decimal places)?
A. $10.67
B. $10.56
C. $9.60
D. $8.64
Question#43:
For direct workers, how are overtime premiums and idle time costs normally accounted for?
A. Overtime premiums: Indirect cost Idle time: Direct cost
B. Overtime premiums: Indirect cost Idle time: Indirect cost
C. Overtime premiums: Direct cost Idle time: Direct cost
D. Overtime premiums: Direct cost Idle time: Indirect cost
Question#44:
Would each of the following be classified as a direct or an indirect cost?
(1)The parts used by a vehicle mechanic in the repair of a car for a customer
(2)The salary of a factory manager
(3)The wages of a factory maintenance department
A. No direct costs 1, 2 and 3 are indirect costs
B. 1, 2 and 3 are direct costs No indirect costs
C. 1 and 2 are direct costs 3 is an indirect cost
D. 1 is a direct cost 2 and 3 are indirect costs
Question#45:
Which of the following documents would form part of the purchasing system?
(1)Purchase invoice
(2)Goods received note
(3)Purchase requisition
A. 1, 2 and 3
B. 1 and 2 only
C. 1 and 3 only
D. 2 and 3 only
Question#46:
Which of the following can be contents of a spreadsheet cell?
(1)Formula
(2)Text
(3)Value
A. 1 and 2 only
B. 1, 2 and 3

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C. 1 and 3 only
D. 2 and 3 only
Question#47:
Which of the following would use process costing?
(1)Education provision
(2)Accounts preparation
(3)Soft drink production
(4)Oil refining
A. 1 and 2
B. 3 and 4
C. 3 only
D. 1 only
Question#48:
In a spreadsheet, which menu options should be selected in order to save a copy of the current
worksheet whilst leaving the original document intact?
A. Insert and Save As
B. File and Save
C. Insert and Save
D. File and Save As
Question#49:
A company has two production cost centres, M and L. M absorbs overheads on the basis of machine
hours and L absorbs overheads on the basis of labour hours. The following information is available for
the next period:
Cost centre M L
Allocated and apportioned production overheads $400,000 $600,000
Direct labour hours 50,000 150,000
Machine hours 80,000 30,000
Job ABC will require four machine hours and three labour hours in each of the two production cost
centres.
How much production overhead will be absorbed by job ABC?
A. $44
B. $64
C. $32
D. $31
Question#50:
Which of the following statement(s) relating to management accounting reports is/are TRUE?
(1)They have a standard format
(2)They are prepared for internal use
A. Neither statement 1 nor statement 2
B. Both statement 1 and statement 2
C. Statement 1 only
D. Statement 2 only

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