MA1 – Mock Test 2

Question 1
Which of the following would be classified as external information for business?
A. A safety conformance report prepared by the business safety officer
B. Sales analysis reports prepared by area sales managers
C. Employee details on the payroll database
D. A report on consumer attitudes prepared by a market research company

Question 2
What is the correct cost accounting entry in an interlocking system for the payment
of wages?
A. Dr Wages control account Cr Bank account
B. Dr Wages control account Cr Cost ledger control account
C. Dr Bank account Cr Wages control account
D. Dr Cost ledger control account Cr Wages control account

Question 3
In which department is a purchase order usually prepared?
A. Inventory stores department of the buying organization
B. Purchasing department of the buying organization
C. Dispatch department of the supplying organization
D. Goods received department of the buying organisation

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. 2 and 3 only
B. 1 and 3 only
C. 1 and 2 only
D. 1, 2 and 3

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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. Profit centre
B. Investment centre
C. Revenue centre
D. Cost 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. 1,536 kg
B. 1,480 kg
C. 1,476 kg
D. 1,596 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 14 per unit
Between 251 and 300 units produced in a 17 per unit
week
Over 300 units produced in a week 20 per unit

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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. $4,750
C. $4,930
D. $6,400

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. $34.78
B. $36.10
C. $35.12
D. $36.46

Question 9
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, 2 and 3
B. 2 and 3 only
C. 1 and 2 only
D. 1 and 3 only

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Question 10
Are the following statements, about weighted average methods of raw materials
pricing, true or false?
(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 true and statement 2 is false
C. Both statements are true
D. Statement 1 is false and statement 2 is true

Question 11
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. $4,750
B. $4,000
C. $6,000
D. $3,000

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Question 12
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. 560 kg
C. 520 kg
D. 600 kg

Question 13
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*$B3
B. =B$6*B$3
C. =$B6*$B3
D. =B6*B$3

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Question 14
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*AVERAGE(B1:B5)
C. =A1*B1+B2+B3+B4+B5
D. =A1*SUM(B1:B5)

Question 15
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

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Question 16
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
(5) Which of the above is/are true of real time computer data processing?

A. 2 only
B. 1, 3 and 4
C. 1 and 4 only
D. 2 and 3

Question 17
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. Neither 1 nor 2
B. 2 only
C. Both 1 and 2
D. 1 only

Question 18
Which of the following is MOST likely to be a task of the accounts department?
A. Paying suppliers' invoices
B. Establishing procedures for hiring staff
C. Negotiating prices and discounts with suppliers
D. Setting the sales budget

Question 19
Which of the following is NOT a requirement of useful management information?
A. Timely
B. Complete
C. Budgeted
D. Cost beneficial

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Question 20
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. 10,700 units
B. 800 units
C. 2,400 units
D. 7,500 units

Question 21
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/26/15
C. Ve/27/12
D. Ve/29

Question 22
The following information shows the power costs and supervision costs incurred by
an organisation at different levels of capacity utilisation.

Capacity utilisation 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: fixed
B. Power: semi-variable Supervision: fixed
C. Power: semi-variable Supervision: stepped-fixed
D. Power: variable Supervision: stepped-fixed

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Question 23
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. 11.70%
B. 8.60%
C. 13.40%
D. 16.80%

Question 24
In a cost accounting system what would be the entry for the issue of INDIRECT
materials to a production cost centre?
A. Dr Raw materials account Cr Production overhead account
B. Dr Work in progress account Cr Raw materials account
C. Dr Production overhead account Cr Raw materials account
D. Dr Raw materials account Cr Work in progress account

Question 25
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. $492.00
B. $478.32
C. $498.25
D. $452.00

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Question 26
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

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. $29,360
B. $35,400
C. $28,600
D. $36,160

Question 27
Jane works for XYZ Co. She has created a spreadsheet which lists contact details
for all XYZ Co's clients.
Which spreadsheet functions should she use to display details for all clients based in
the South region, ordered alphabetically?
A. Sorting and ranking
B. Filtering and sorting
C. Filtering and ranking
D. Ranking and linking

Question 28
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. A workspace divided into rows and columns
D. The formatting of numbers

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Question 29
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 raw material
C. Toy cars are work in progress and the plastic is raw material
D. Toy cars are finished goods and the plastic is work in progress

Question 30
Which of the following is/are items that would be separately included in a job cost?
(1) Cost of sales
(2) Direct labour
(3) Selling overhead
(4) Profit

A. 2, 3 and 4
B. 2 and 3 only
C. 1 only
D. 3 and 4 only

Question 31
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. Both statements
B. Statement 1 only
C. Neither statement
D. Statement 2 only

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Question 32
Which of the following 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. 2 and 3 only
C. C.1 and 2 only
D. 3 only

Question 33
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. Both statements are false
B. Both statements are true
C. Statement 1 is false and statement 2 is true
D. Statement 1 is true and statement 2 is false

Question 34
There is an error in cell J3 of this spreadsheet:

Which of the following formulas could have caused this error?

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

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Question 35
Which of the following statements about information 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 1 only
B. Both statements
C. Statement 2 only
D. Neither statement

Question 36
Which of the following statements concerning the use of cost codes is/are true?
(1) The classification of costs is simplified
(2) Electronic data processing is facilitated

A. Statement 2 only
B. Statement 1 only
C. Neither statement
D. Both statements

Question 37
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. $420.40
B. $370.40
C. $367.00
D. $500.40

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Question 38
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 statements are true?
A. Neither statement
B. Statement 2 only
C. Both statements
D. Statement 1 only

Question 39
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 and 4 only
B. 1 only
C. 2, 3 and 4 only
D. 1, 2, 3 and 4

Question 40
What is a cost unit?
A. A basis for cost classification
B. A unit of output in relation to which costs are ascertained
C. The cost per unit of output
D. The unit cost of direct materials and direct labour

Question 41
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. $10.56
B. $8.64
C. $10.67
D. $9.60

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Question 42
For direct workers how are overtime premiums and idle time costs normally
accounted for?
A. Overtime premiums: Indirect cost Idle time: Indirect cost
B. Overtime premiums: Direct cost Idle time: Direct cost.
C. Overtime premiums: Indirect cost Idle time: Direct cost.
D. Overtime premiums: Direct cost Idle time: Indirect cost

Question 43
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. Direct: 1 Indirect: 2 and 3

B. Direct: 1 and 2 Indirect: 3
C. Direct: 1, 2 and 3 Indirect: -
D. Direct: - Indirect: 1, 2 and 3

Question 44
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 45
Which of the following can be contents of a spreadsheet cell?
(1) Formula
(2) Text
(3) Value

A. 1 and 3 only
B. 2 and 3 only
C. 1 and 2 only
D. 1, 2 and 3

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Question 46
Which of the following use process costing?
(1) Education provision
(2) Accounts preparation
(3) Soft drink production
(4) Oil refining

A. 3 and 4
B. 3 only
C. 1 only
D. 1 and 2

Question 47
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. File and Save
B. File and Save As
C. Insert and Save
D. Insert and Save As

Question 48
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 $400,00 $600,000
overheads 0
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. $32
B. $64
C. $31
D. $44

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Question 49
Which of the following statements relating to management accounting reports are
true?
(1) They have a standard format
(2) They are prepared for internal use

A. Statement 1 only
B. Neither statement
C. Statement 2 only
D. Both statements

Question 50
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 figure has recently been deleted
D. The formula used to calculate the monthly total is different to the formulas
used in other months

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