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F2 Mock Exam 1
F2 Mock Exam 1
Question#5:
A company used government produced data that showed the economy grew by 4.6% in the last year.
Which of the following describes the data used by the company?
A. Secondary and discrete
B. Primary and discrete
C. Primary and continuous
D. Secondary and continuous
Question#6:
A company manufactures two main products, J and K, and the by-product L. The by-product has a net
realisable value of $2 per litre. The following information relates to last month, when there were no
opening inventories.
Product J K L
Litres Litres Litres
Production 50,000 40,000 10,000
Sales 45,000 30,000 10,000
Joint costs last month were $290,000. Company policy is to apportion joint costs on a physical measure
basis and to treat the net realizable value of the by-product as a deduction from the cost of the main
products.
What was the cost value of last month's closing inventory of product J?
A. $13,500
B. $15,000
C. $16,200
D. $16,400
Question#7:
Which of the following is NOT a dimension which is used to measure performance in service
organizations?
A. Financial performance
B. Resource utilization
C. Innovation D. Quality inspection in advance
Question#8:
T Co usually has a quarterly labour cost of $2,500,000. Material costs (mainly copper) were $3,000,000
in January to March. The worldwide cost of copper has increased in the second quarter by 15%.
Overheads were $45,000,000 in January to March.
Which TWO of the following variances for April to June are worth investigating as the reasons for the
variance are unknown?
A. Overhead expenditure variance of $4,000,000 adverse
B. Materials price variance of $450,000 adverse
C. Sales volume variance of $3,000,000 favorable
D. Total direct labour variance of $400 adverse
Question#9:
Which of the following defines the prime cost of a product?
A. The total production cost of a product
B. The material cost of a product
C. The cost of making the first unit of a product
D. The total direct costs of a product
Question#10:
Which TWO of the following statements relating to value analysis are true?
A. Value analysis attempts to enhance the esteem value of a product at the lowest cost
B. Value analysis is a planned, scientific approach to cost reduction
C. Cost value is the market value of the product or service
D. One of the problems with value analysis is that it discourages innovation
Question#11:
Last month the opening inventory was 6,000 units and the closing inventory was 4,000 units. Using
absorption costing, this closing inventory was valued at $33,000. Using marginal costing last month's
profit was $50,000 and using absorption costing it was $41,000.
What was the variable production cost per unit last month?
A. $6.00
B. $4.50
C. $8.25
D. $3.75
Question#12:
One material is used in the manufacture of product X. The total cost of the material (purchased and
used) in a period was $4,000. In the period, the direct material price and usage variances were $200
adverse and $300 favorable respectively and 1,000 units were manufactured.
What is the standard direct material cost per unit for product X?
A. $3.80
B. $3.90
C. $4.10
D. $4.30
Question#13:
Last month the total sales for XYZ Co were $960,000. A pie chart is used to show the breakdown of sales
by region for the month. South region is represented by 60 degrees on the pie chart.
What are the sales for the month for the south region $_______?
Question#14:
Which of the following statements about payback is TRUE?
A. Payback is technically superior to NPV
B. Payback takes into account the time value of money
C. Payback is useful as an initial screening device
D. A change in the cost of capital will affect the payback
Question#15:
The following statements refer to documents used in the material procurement procedures of XYZ Co.
Is each of these statements true or false?
True False
A purchase requisition is prepared in the purchasing department of XYZ Co and then sent to the supplier
A goods received note is prepared by the supplier and sent with the material to XYZ Co
Question#16:
The performance of a publicly funded hospital is monitored using measures based upon the 'three Es'.
The most important performance measure is considered to be the achievement of hospital targets for
the successful treatment of patients.
Which of the three Es best describes the above measure?
A. Economy
B. Externality
C. Effectiveness
D. Efficiency
Question#17:
A time series model of sales volume has the following trend and additive seasonal variation:
Trend:
Y = 5,000 + 4,000 X
Where Y = quarterly sales volume in units,
X = the quarter number (where the first quarter of 20X1=quarter 17,
The second quarter of 20X1= quarter 18 etc)
Quarter Seasonal variation
(Units)
First +3,000
Second +1,000
Third -1,500
Fourth -2,500
What would be the time series forecast of sales units for the third quarter of 20X2?
A. 79,500
B. 98,500
C. 95,500
D. 97,000
Question#18:
Which accounts should be debited and credited to form the correct journal entry to record the direct
labour costs charged to production?
Wages control Production overhead control Work-in-progress control
Account to be credited
Account to be debited
Question#19:
Which TWO of the following are true of imposed budgeting?
A. It increases operational managers' commitment to organizational objectives
B. It reduces deliberate overestimation of costs and underestimation of revenues in a budget
C. It is most effective in large organizations
D. Top management prepare a budget with little or no input from operating staff
Question#20:
A company uses the Economic Order Quantity (EOQ) model and holds no buffer inventory. Its annual
cost of holding one unit in inventory has decreased.
What is the effect, if any, of this decrease in holding costs on the EOQ and on the total annual cost of
placing orders?
Increase Decrease No effect
EOQ
Total annual cost of placing orders
Question#21:
Which of the following are benefits of using activity based costing?
(1)It recognises that overhead costs are not always driven by the volume of production
(2)It does not result in under or over absorption of fixed overheads
(3)It avoids all arbitrary cost apportionments
(4)It is particularly useful in single product businesses
A. 1 and 2
B. 1 only
C. 1 and 4
D. 2 and 3
Question#22:
Which of the following statements about standard costing are TRUE?
(1)A standard cost is a predetermined estimated unit cost
(2)A standard cost can be used as a control device to help improve performance
(3)A standard cost card shows the unit cost details only of each product
A. 1, 2 and 3
B. 1 and 3 only
C. 2 and 3 only
D. 1 and 2 only
Question#23:
Which of the following about mission statements is/are TRUE?
(1)They are stated in a standard format
(2)They play an important role in the planning process
(3)They help ensure consistency in decision-making
A. 1 only
B. 1, 2 and 3
C. 2 only
D. 2 and 3 only
Question#24:
A company manufactures and sells a single product. Next year the budgeted total fixed production costs
are $480,000, budgeted sales are 24,000 units and budgeted production is 25,000 units. The budgeted
profit for next year using absorption costing principles is $57,500.
What is the budgeted profit for next year using marginal costing principles?
A. $37,500
B. $38,300
C. $77,500
D. $76,700
Question#25:
A company uses absorption costing with a predetermined hourly fixed overhead rate.
The following situations arose last year.
Would each of these situations cause overheads to be under absorbed or over absorbed?
Under absorbed Over absorbed
Actual overhead expenditure was less than the budgeted expenditure
Actual hours worked were less than the budgeted hours used to set the predetermined overhead
absorption rate
Question#26:
In the last period an organization budgeted to work 116,000 hours manufacturing 29,000 units. Actual
output last period was 26,000 units which took 108,000 hours to manufacture.
What was the labour efficiency ratio for the last period (expressed as a % correct to one decimal
place)?
A. 93.1% C. 89.7%
B. 103.3% D. 96.3%
Question#27:
Which of the following statements about big data analytics in organisations is/are TRUE?
(1)It will provide a deeper understanding of customer behaviour and purchasing preferences
(2)It will require investment in technology to manage the volume and speed of information accumulated
A. 2 only
B. 1 only
C. Neither 1 nor 2
D. Both 1 and 2
Question#28:
The following data relate to a process for last month:
Opening inventory 200 units (70% complete)
Completed output 2,450 units
Closing inventory 300 units (40% complete)
What were the equivalent units of production last month ______units?
Question#29:
A company uses standard marginal costing. Last month the standard contribution on actual sales was
$10,000 and the following variances arose:
$
Total variable costs variance 2,000Adv
Sales price variance 500Fav
Sales volume contribution variance 1,000Adv
What was the actual contribution for last month?
A. $8,000
B. $7,000
C. $8,500
D. $7,500
Question#30:
The results of an accountancy exam are normally distributed with a mean score of 58 and a standard
deviation of 10.
What is the percentage probability that a student will score more than 80 (to 2 decimal
places)_____%?
Question#31:
Is each of these statements about spreadsheets true or false?
True False
A spreadsheet is the most suitable software for the long term storage of large volumes of data
A spreadsheet could be used for preparing flexible budgets for different activity levels
Question#32:
Last month an organization’s direct workers were paid $40,000 for normal working. In addition they
were paid a total of $12,000 for overtime working. Overtime hours which were required due to a
general shortage of labour were paid at time and a half.
What was the total direct labour cost for last month $______?
Question#33:
A company manufactures and sells a single product. At the end of the manufacturing process all units
are inspected and 20% are rejected and scrapped. Next year the budgeted sales are 192,000 units and
the inventory of finished units will increase by 2,000 units.
What is next year's budgeted production (in units) which will be subject to inspection_______?
Question#34:
Which TWO of the following statements about fixed and flexible budgets are true?
A. Comparison of a fixed budget with the actual results is useful for budgetary control purposes
B. Flexible budgeting assumes that most costs are semi-variable
C. Flexible budgets are prepared using marginal costing techniques
D. Fixed budgets are useful for monitoring fixed costs
Question#35:
The number of daily enquiries to a local charity has a mean of 18 and a standard deviation of 4
complaints.
What is the coefficient of variation to the nearest whole_______ %?
Section ‘B’
Question#36:
The single product manufactured by Allegrop Co requires 2.5 kg of a single raw material per unit of
product. The material costs $9.00 per kg.
Budgets are being prepared and the following additional information is available:
What would be the finished goods inventory at the end of Period 2?_____units
Task 5:
Which of the following may enable Allegrop Co to increase output?
(1)Introduce a perpetual inventory system
(2)Introduce continuous stocktaking
(3)Use raw material more efficiently
(4)Take advantage of settlement discount
A. 2, 3 and 4
B. 1, 2 and 4
C. 3 only
D. 1 and 3
Question#37:
Kidling Co uses a standard marginal costing system for cost control of its single product.
The standard cost card for the product is:
$ per
unit
Direct material 2.5 kg at $12.60 per kg 31.50
Direct labour 2 hours at $11.20 per hour 22.40
Variable production overhead 8.80
62.70
The direct labour rate variance in the month just ended was $1,908 favorable.
What was the total direct labour cost in the month?
A. $139,100
B. $142,916
C. $283,924
D. $280,108
Question#38:
The following information, for the year to 31 December 20X9, is available for Fun Co
which operates in the toys and games industry.
$'000
Sales 7,660
Gross profit 1,200
Operating profit 590
Capital employed 3,330
Current assets 400
Fun Co sold 350,000 units in the year ended 31 December 20X9. Total sales for the
toys and games industry for the year were $61,280,000.
Task 1: 6 Marks
Calculate the following performance measures for Fun Co for the year ended 31 December 20X9:
Operating profit margin (to one decimal place) _____ %
Asset turnover (to one decimal place) _____ times
Return on investment (to one decimal place) _____ %
Residual income (to nearest $'000) $______'000
Market share (to one decimal place) ______%
Task 2: 2 Marks
Return on investment (ROI) and residual income (RI) are both measures of investment
performance.
Does each of the following statements describe a feature of ROI only, RI only,
both ROI and RI or neither of the two measures?
. ROI RI Both Neither
only only
Based on profit rather than cash flow
Task 3: 2 Marks
An analyst has calculated the following ratios for Fun Co for comparison with the toys
and games industry average.
A. Worse
B. Better
A. Riskier
B. Safer
Its ability to service its loans is_____ (worse/better) than the industry average, which could mean that
Fun Co is having a_____ (lower/higher) level of profitability than the industry average.
End Paper
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