1. A company has a budget to produce 5,000 units of Product B in December.

The
budget for December showed that, for Product B, the opening inventory will be 400
units and the closing inventory will be 900 units. The monthly budgeted production
cost data for Product B for December is as follows:
Variable direct costs per unit: $6.00
Variable production overhead costs per unit: $3.50
Total fixed production overhead costs: $29,500
The company absorbs overheads on the basis of the budgeted number of units produced.
The budgeted profit for Product B for December, using absorption costing is: D. $2,950
greater than it would be using variable costing

—--------------------------------------
2. T Ltd uses a standard labour hour rate to charge its overheads to its clients’ work.
During the last annual reporting period production overheads were under-absorbed
by £19,250. The anticipated standard labour hours for the period were 20,000 hours
while the standard hours actually charged to clients were 23,100. The actual
production overheads incurred in the period were £481,250. The budgeted
production overheads for the period were:
400.000
3. HMF Co produces a single product. The budgeted fixed production overheads for the
period are $500,000. The budgeted output for the period is 2,500 units. Opening
inventory at the start of the period consisted of 900 units and closing inventory at the
end of the period consisted of 300 units. If absorption costing principles were applied,
the profit for the period compared to the marginal costing profit would be which of the
following?
120000 lower

4. A single-product company prepares income statements using both absorption

and variable costing methods. Manufacturing overhead cost applied per unit
produced under absorption costing in year 2 was the same as in year 1. The
year 2 variable costing statement reported a profit whereas the year 2
absorption costing statement reported a loss. The difference in reported
income could be explained by units produced in year 2 being:
Less than units sold in year 2

5. The following are the cost details for a toy soldier made by Play Today.
- Direct materials (per unit): $3
- Direct labour (per unit): $1
- Direct expenses (per unit): $2
- Variable production overheads (per unit): $1
- Variable selling & administration costs (per unit): $1
- Fixed overhead absorption rate: $2
The closing inventory is 100 units. What is the value of closing inventory under variable
costing?

$700
—---------------------------
Stead Company produces a single product. Last year, the company's net operating income
computed by the absorption costing method was $6,400, and its net operating income
computed by the variable costing method was $9,100. The company's unit product cost was
$17 under variable costing and $20 under absorption costing. If the ending inventory
consisted of 2,100 units, the beginning inventory in units must have been: 3000
—--------------------------------------------
8. Under variable costing, an increase in the fixed factory overhead will have no effect
on the unit product cost.
TRUE

Under variable costing, inventoriable product costs consist of direct materials, direct
labor, variable manufacturing overhead and variable selling and administration
expenses.
FALSE

The inventory value shown on the balance sheet is generally higher under absorption
costing than under variable costing.
TRUE

Under variable costing, it is possible to defer a portion of the fixed manufacturing

overhead costs of the current period to future periods through the inventory account.
FALSE

Cái câu này là T - F - T - F đúng không? yuppp

đúng ròiròi

$24,200
9.Bass Ltd., which has only one product, has provided the following data concerning its most
recent month of operations:

Selling price $ 115

Units in beginning inventory 0

Units produced 6,600

Units sold 6,400

Units in ending inventory 200

 Variable costs per unit:

Direct materials $ 26

Direct labor $ 46

Variable manufacturing overhead $ 7

Variable selling and administrative expense $ 9

Fixed costs:

Fixed manufacturing overhead $ 105,600

Fixed selling and administrative expense $ 51,200

What is the unit product cost for the month under variable costing? C. $79 per unit

10. Super Fast manufactures toy sports cars. Sales this year have been significantly below
target due to a new competitor in the market. The management team receives a bonus if
target profits are achieved. Super Fast uses absorption costing and a significant portion of
costs are fixed overheads. Despite poor revenues, the profit targets for the year were
achieved and management received their bonus. Which of the following is a possible
explanation?

Production levels were increased, resulting in a build up of inventory

11. From the options below, select the effect of a decrease in the level of stock during a
period on absorption costing profits and closing stock valuation assuming the overhead
absorption rate remains unchanged.

—> Absorption costing profits will be lower and closing stock valuation higher than
under variable costing

12. Stead Company produces a single product. Last year, the company's net operating
income computed by the absorption costing method was $6,400, and its net operating
income computed by the variable costing method was $9,100. The company's unit product
cost was $17 under variable costing and $20 under absorption costing. If the ending
inventory consisted of 2,100 units, the beginning inventory in units must have been: 3000
(Này có rồi á, trùng đáp án yay)

13. The absorption cost profit is $82,750. Opening inventory is 4,500 units and closing
inventory is 3,700 units. Fixed overheads are absorbed at $4 per unit. What would be the
reported profit using marginal costing?
—-> All are incorrect (Đúng phải là 85.950)
dưn ra 85 850 ớ, hong pisk nữa
đúng rồi bà

From the options below, select the one scenario in which the overheads will always be over-
absorbed.
actual overheads incurred are lower than the amount absorbed

14. K Plc had a marginal costing profit of $10,400 in the last period. Its inventories for the
period were valued in the following way:
- Opening inventory: $3,600
- Closing inventory: $4,900
—-> The answer is $11,140.

15. The relationship between the net operating income under absorption costing approach
and under variable costing is described as follows:

Net operating income under Absorption costing + Fixed manufacturing overhead

released from beginning inventories – Fixed manufacturing overhead deferred in
ending inventories = Net operating income under Variable costing

16. - Budgeted production is 24,000 units

- Fixed production overhead costs are $240,000
- Forecast sales are 22,000 units
- Under absorption costing the profit for the period is expected to be $32,000
—-> 12000

17. A business manufactures a single product which sells for $80 per unit. The budgeted
data for the latest period are as follows:
- Production and sales volume: 5,000 units
- Material cost: $25,000
- Direct labour cost: $12,000
- Production overhead: $69,800
- Non-production overhead: $71,420
Actual production volume and costs were as budgeted for the period but the actual sales
volume achieved was 4,700 units. There was no inventory at the beginning of the period.
—-> 200000 (KHÔNG DẤU PHẨY)

18. S Plc sells plastic furniture. Its popular product is kids chairs. These are small chairs for
children which has high demand among playschools and day care centres. S Plc has
budgeted to produce 7,500 kids chairs in November. The budget for November shows that
for the kids chairs, the opening inventory will be 600 units and the closing inventory will be
1,100 units. The monthly budgeted production cost data for the chair for November is as
follows: Variable direct costs per unit: £6.00; Variable production overhead costs per unit:
£3.50; Total fixed production overhead costs: £44,250. The company absorbs overheads on
the basis of the budgeted number of units produced. From the options below, choose the
amount by which the budgeted profit for the kids chairs using absorption costing will vary as
compared to the profit computed using variable costing.
—> 2950 greater than…

19. Light It Up manufactures lights and based on the advice of the management accountant
had changed from absorption costing to variable costing for internal reporting purposes.
Manufacturing levels and sales have been very consistent over recent periods, however, the
production manager has noticed a change in profits in the internal reports. Here is some
data for this period for Light It Up.
- Opening inventory: 600
- Unit produced: 5,000
- Unit Sold: 5,500
Light It Up had previously used an predetermined rate of $7 to assign overheads.
The profit reported in this period’s internal reports was $10,000. What would the profits have
been if Light It Up had not switched to variable costing?
10,700
Chap 4
Budgeted sales of X for December are 18,000 units. At the end of the production process for
X, 10% of production units are scrapped as defective. Opening inventories of X for
December are budgeted to be 15,000 units and closing inventories will be 11,400 units. All
inventories of finished goods must have successfully passed the quality control check. What
is the production budget for X for December?16000 units
From the options below, select the best definition of the term ZBB (Zero Based Budgeting).
It is a method of budgeting whereby all activities are re-evalulated each time a budget is
formulated
3. Each unit of product Echo takes five direct labour hours to make. Quality standards are
high, and 8% of units are rejected after completion as sub-standard. Next month's budgets
are as follows: Opening inventories of finished goods: 3,000 units. Planned closing
inventories of finished goods: 7,600 units. Budgeted sales of Echo: 36,800 units. All
inventories of finished goods must have successfully passed the quality control check. What
is the direct labour hours budget for the month? 225,000

3. Castil Corporation makes and sells a product called a Miniwarp. One Miniwarp requires
2.5 kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the next five
months is as follows: August: 20,00 units, September: 20,900 units, October: 20,800 units;
November: 20,600 units, December: 21,300 units. The company wants to maintain monthly
ending inventories of Jurislon equal to 20% of the following month's production needs. On
July 31, this requirement was not met since only 9,700 kilograms of Jurislon were on hand.
The cost of Jurislon is $5.00 per kilogram. The company wants to prepare a Direct Materials
Purchase Budget for the next five months. The desired ending inventory of Jurislon for the
month of September is: 52000
4. A budget should/ can do all of the following, except:
Be prepared by managers from different functional areas working independently of
each other
The S Company makes and sells a single product, Product R. Budgeted sales for May are
$300,000. Gross Margin is budgeted at 30% of sales dollars. If the net income for May is
budgeted at $40,000, the budgeted selling and administrative expenses are: 50,000

In which of the following situations would the use of the imposed budgets not be
appropriate?
In decentralized organizations and acting autonomously

5. The Waverly Company has budgeted sales for next year as follows: Sales in units: 1st
QuarterU – 12,000; 2nd Quarter – 14,000; 3rd Quarter – 18,000; 4th Quarter – 16,000. The
ending inventory of finished goods for each quarter should equal 25% of the next quarter's
budgeted sales in units. The finished goods inventory at the start of the year is 3,000 units.
Scheduled production for the third quarter should be: 17,500

- Tucker's sales budget is as follows: January: €182,000, February: €320,000, March:

€354,000. 20% of sales are paid for immediately in cash. Of the credit customers,
40% in the month following the sale and are entitled to a 2% discount. The remaining
 customers pay two months after the sale is made. What is the value of sales receipts
shown in the company's cash budget for March?
→ €258,512

- B Corporation is working on its direct labor budget for the next two months. Each unit
of output requires 0.05 direct labor-hours. The direct labor rate is $7.50 per direct
labor-hour. The production budget calls for producing 9,100 units in May and 8,800
units in June. If the direct labor work force is fully adjusted to the total direct labor-
hours needed each month, what would be the total combined direct labor cost for the
two months?
→ $6,712.50

6. Which of the following is true of master budgets?

They aid in coordinating what needs to be done to implement a plan

7. From the options below, select the ONE item that should not be included in the cash
budget: Gain on the disposal of a piece of machinery

The below details have been extracted from the accounts payable records of Q Plc: Invoices
paid in the month of purchase*: 15% of total value; Invoices paid in the first month after
purchase: 65% of total value; Invoices paid in the second month after purchase: 20% of total
value. This pattern of payments is expected to continue in the future and has been used to
produce the company's cash budget for October to December. Purchases for October to
December are budgeted as follows: October: $140,000; November: $125,000; December:
$150,000. (*) A settlement discount of 5% is taken on invoices paid in the month of
purchase. The amount budgeted to be paid to suppliers in December is:-> 130,625

The S Company makes and sells a single product, Product R. Budgeted sales for May are
$300,000. Gross Margin is budgeted at 30% of sales dollars.
Answer: $50,000

A company manufactures a single product, M. Budgeted production output of

product M during August is 200 units. Each unit of product M requires 6 labour
hours for completion and PR Co anticipates 20 per cent idle time. Labour is paid
at a rate of $7 per hour. What is the direct labour cost budget for August?
→ $10,500

From the options below, select the best definition of a flexible budget.
→ A budget which shows costs and revenues at different activity levels

R Plc is preparing its cash budget for next year. The estimated accounts payable
balance at the beginning of next year is $54,000. The budgeted purchases for
next year are $680,000, occurring evenly throughout the year. It is estimated that
75% of purchases will be on credit and the remainder will be for cash. The
company pays for credit purchases in the month following purchase. The
budgeted cash payments to suppliers next year are:
→ $691,500

Furniture, Inc., estimates the following number of mattress sales for the first four months of
20x6: January: 22,000; February: 30,800; March: 28,600; April: 35,200. Finished goods
inventory at the end of December is 6,600 units. Target ending finished goods inventory is
20% of the next month's sales. How many mattresses should be produced in the first quarter
of 20x6? 81,840

From the options below, select the purpose of a monthly cash budget.

to determine whether there will be sufficient cash in the bank to meet requirements

The finance manager for Halfway Ltd is responsible for preparing the following reports for
the firm: (I) Statement of profit or loss; (II) Statement of financial position; (III) Cash flow
forecast for the next 5 years; (IV) Sales budget for the next 5 years, (V) Monthly operating
statements for 3 of Halfway’s divisions. Which of these is/are an example of feedforward
control?

III&IV
Castil Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 2.5
kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the next five
months is as follows: August: 20,00 units, September: 20,900 units, October: 20,800 units;
November: 20,600 units, December: 21,300 units. The company wants to maintain monthly
ending inventories of Jurislon equal to 20% of the following month's production needs. On
July 31, this requirement was not met since only 9,700 kilograms of Jurislon were on hand.
The cost of Jurislon is $5.00 per kilogram. The company wants to prepare a Direct Materials
Purchase Budget for the next five months. The total cost of Jurislon to be purchased in
August is: 253,750

R Plc is a specialist manufacturer of a particular type of valve used in pumps. Analysis for
the year shows that, when the budgeted level of sales was 15,000 —-) 1,687,500
Budgeted sales of X for December are 18,000 units. At the end of the production process for
X, 10% of production units are scrapped as defective. Opening inventories of X for
December are budgeted to be 15,000 units and closing inventories will be 11,400 units. All
inventories of finished goods must have successfully passed the quality control check. What
is the production budget for X for December? 16,000 units

Projected sales for Sommers, Inc., for next year and beginning and ending inventory
data are as follows: Sales: 50 000 units; Beginning inventory: 4 000 units; Desired
ending inventory:8 000 units. The selling price is £40 per unit. Each unit requires four
pounds of material which costs £6 per pound. The beginning inventory of raw
materials is 12 000 pounds. The company wants to have 3000 pounds of material in
inventory at the end of the year. Sommers' budgeted total purchase cost of direct
materials would be:

£1,242,000

The Waverly Company has budgeted sales for next year as follows: Sales in units: 1st
Quarter – 12,000; 2nd Quarter – 14,000; 3rd Quarter – 18,000; 4th Quarter – 16,000. The
ending inventory of finished goods for each quarter should equal 25% of the next quarter's
budgeted sales in units. The finished goods inventory at the start of the year is 3,000 units.
Scheduled production for the third quarter should be:

17500
E Plc is preparing its cash forecast for the next three months. From the options below, select
the ONE item that should be left out of its calculations.
Tax payment due, that relates to last year’s profits Sao nãy câu này H thấy ai làm là
Expected gain on ấy | nãy làm lộn á mới search lại | oki

Chap 5

Last year, variable expenses were 60% of total sales and fixed expenses were 10% of total
sales. If the company increases its selling prices by 10%, but if fixed expenses, variable
costs per unit, and unit sales remain unchanged, the effect of the increase in selling price on
the company's total contribution margin would be: An increase of 25%

J Ltd produces and sells two products. The O sells for £12 per unit and has a total
variable cost of £7.90, while the H sells for £17 per unit and has a total variable cost of
£11.20. For every four units of O sold, three of H are sold. J Ltd's fixed costs are
£131,820 per period. Budgeted sales revenue for the next period is £398,500.
Calculate the margin of safety. £12,511

Which of the following is NOT a major assumption of breakeven analysis?

Sales prices vary in line with levels of activity

Which of these statements below is/ are correct?

- In two companies making the same product and with the same total sales and
total expenses, the contribution margin ratio will be lower in the company with
a higher proportion of fixed expenses in its cost structure.
- When expressed on a per unit basis, fixed costs can mislead decision makers
into thinking of them as variable costs.
- A shift in the sales mix from low-margin items to high-margin items will
decrease total profits even though total sales increase. Câu này sai á, trên
quizlet là high-margin true low margin false
-
 - To estimate what the profit will be at various levels of activity, multiply the
number of units to be sold above or below the break-even point by the unit
contribution margin.

If both the selling price and variable cost per unit of a product rise by 17%, the
breakeven point would ______ .

a.
remain constant

A company sells two products: M and N. The sales mix is expected to be $3.00 of sales of
Product M for every $5.00 of sales of Product N. Product M has a contribution margin ratio of
40% whereas Product N has a contribution margin ratio of 50%
560,000

Cost-volume-profit analysis is used primarily by management: As a planning tool

Sarri Plc produces and sells three products, X, Y and Z. It has contracts to supply
products X and Y, which will utilise all of the specific materials that are available to
make these two products during the next period. The revenue these contracts will
generate and the contribution to sales (C/M) ratios of products X and Y are as follows:

Revenue C/M ratio

Product X £10 million 15%

Product Y £20 million 10%

Product Z has a C/M ratio of 25%.
The total fixed costs of Sarri Plc are £5.5 million during the next period and
management have budgeted to earn a profit of £1 million. Calculate the revenue that
needs to be generated by Product Z for Sarri Plc to achieve the budgeted profit: £ 3
million
Chap 6

From the options below, select the factors that would NOT be taken into account when
determining the price of a product. Cost of making other unrelated products

2. Zola's Heaters is approached by Ms. Leila, a new customer, to fulfill a large one -time only
special order for a product similar to one offered to regular customers. Zola's Heaters has
excess capacity. The following per unit data apply for sales to regular customers:
→ $936

G Co's entire machine capacity is used to produce essential components. The costs of using
the machines are as follows:
- Variable costs $24,000
- Fixed costs $55,000

If all the components are purchased from an outside supplier, the machines could be used
by G Co. to produce other items for automobile manufacturers which would earn a total
contribution of $38,000. From the options below, select the maximum price that a profit-
maximising company should be willing to pay to the outside supplier for the components.
62,000

Perwin Corporation estimates that an investment of $400,000 would be needed to produce

and sell 30,000 units of Product B each year. At this level of activity, the unit product cost
would be $25. Selling and administrative expenses would total $350,000 each year. The
company uses the absorption costing approach to cost-plus pricing. If a 15% rate of return
on investment is desired, then the required markup for Product B would be closest to:
55%

H Plc sells a laptop, printer, mouse, speakers, and an external hard-drive together at a
single price.
From the options below, select the appropriate term for the strategy of including various
products at a combined price. Product bundling

Nsansa Dairy Industries sells milk to different customers at the following rates. Which ONE
of the marketing based pricing strategies is Nsansa Dairy Industries using to sell its
products? Price differentiation

From the options below, identify the one statement which does NOT relate to the benefits of
variable (marginal) cost plus pricing: The required profit will be made if budgeted sales
volumes are achieved

town and country auto uses time and material pricing. The Body Shop has the following cost
data
→ $890 (không chắc)

Seamons corporation has the following information available on product K

$852000

From the options below, select the one which is NOT an advantage of marginal cost
plus pricing.

Ensures fixed overheads are recovered in the long-term

P Ltd. manufactures rustic furniture. The cost accounting system estimates

manufacturing costs to be $240 per table, consisting of 60% variable costs and 40%
fixed costs. The company has surplus capacity available. It is P Ltd.'s policy to add a
75% markup to full costs.
A large hotel chain is currently expanding and has decided to decorate all new hotels
using the rustic style. P Ltd. is invited to submit a bid to the hotel chain. What per unit
price will P Ltd. most likely bid on this long-term order? 420

Sam Technologies, currently sells 17" monitors for $270. It has costs of $210. A
competitor is bringing a new 17" monitor to market that will sell for $230. Management
believes it must lower the price to $230 to compete in the market for 17" monitors.
Sam believes that the new price will cause sales to increase by 10%, even with a new
competitor in the market. Sam's sales are currently 5,000 monitors per year.
What is the target cost if the target operating income is 25% of sales?
$172.50
G Co's entire machine capacity is used to produce essential components. The costs of using
the machines are as follows:
- Variable costs $24,000
- Fixed costs $55,000
→ 62,000 (có cần ghi dấu , không?) khoong bieet, tra ra đáp án trắc nghiệm là có
dấudấu
A company estimates that net profit of $255,000 would be earned when it produces
and sells 10,000 units of product S each month. At this level of
activity,
74,17 tui ra 90
:))))

Town and Country Auto Repair uses time and material pricing. The Body Shop has
the following cost data…….If a particular job takes 10 hours in labour and $500 in
materials, determine the price charged for the job. .$ 89

Silco

From the options below, select the appropriate term for the marketing strategy of
charging a very low price on one item in order to generate customer loyalty and
increased sales of other items. Loss leader pricing

"Cost-plus" pricing means that all costs—manufacturing, selling, and administrative

—are included in the cost base from which the target selling price is derived. —>
False
If the formula for the markup percentage on absorption cost is used for setting prices, then
the company's desired return on investment (ROI) will be attained regardless of how many
units are actually sold. —> F

TRUE

coi đúng sai dùm tui câu 3 t tìm ra là false á câu 1 thì là true

Drag and drop

Susan sells luxury, handmade bathing soaps. She has a marketing offer where bathing
soaps sold alongside two small bottles of fragrance will be charged at a special promotional
price.
From the options below, select the term which best describes Susan's pricing strategy.
Product bundling

Silco Pty Ltd manufactures various lines of computer equipment. They are planning to
introduce a line of laptop computers in January 2008. Current plans call for the
production and sale of 1000 computers with estimated production costs as
follows…………….The average amount of capital invested in the laptop computer line
is $900 000 and Silco's target return on investment for the line is 18 per cent. What is
the mark-up percentage if the company uses cost-plus pricing based on total variable
cost? 116,7%

A company estimates that net profit of $255,000 would be earned when it produces and sells
10,000 units of product S each month. At this level of activity, the company consumes 9,000
machine hours and 5,000 direct manufacturing labour hours at the rate of $32 per labour
hour. The following information is available on product S:
- Direct material per unit: $32
- Variable manufacturing overhead costs per unit: $7
- Fixed manufacturing overhead costs: $200,000
- Selling and administrative expenses costs: $420,000
If the company uses the absorption costing approach to cost-plus pricing, the required
markup for product S would be closet to:
90%

(không chắc)

Chsp 77777
The following information relates to last year's operations at the Paper Division of Double A
Corporation: Minimum required rate of return: 15%
Return on investment (ROI): 18%
Sales: $810,000
Turnover (on operating assets): 5 times
What was the Paper Division's net operating income last year? $29,160

Carrot Company had the following results during June: net operating income, $2,500;
turnover, 4; and ROI, 20%. Carrot Company's average operating assets were:
$12,500

Ben Company has two stores, P and Q. During April, Store P had a segment margin of
$8,000 and variable expenses equal to 65% of sales. Traceable fixed expenses for Store Q
were $18,000. Ben Company as a whole had a contribution margin ratio of 40%, a combined
segment margin of $20,000, and sales of $180,000. Given this data, the sales for store Q
were: $60,000

A company has a net profit margin of 13% and an asset turnover of 0.8 times. What is the
company’s return on investment? 10.4%

From the options below, choose the statements which will be true when performance
measurement is most effective.
Internal and external aspects are evaluated together
Both long-term and short-term objectives are considered
Managers and divisions are evaluated separately

Holdings Inc. consists of two districts, A and B. The company as a whole had sales of
$400,000, a contribution margin ratio of 25% and a combined segment margin totaling
$35,000. District A had sales of $90,000 during May, a contribution margin ratio of 45%, and
a segment margin of $16,000. If the net operating income of Holdings Inc. for May is
$12,000, the traceable fixed expenses in District B must have been $40,500

The R Company's income statement for May is given below:

If sales for Division L increase $30,000 with a $9,000 increase in the Division's traceable
fixed expenses, the overall company net operating income should: increase by $3,000

Chan Company has two divisions, S and T. The company's overall contribution
margin ratio is 30% when sales in the two divisions total $750,000. If variable
expenses are $450,000 in Division S, and if Division S's contribution margin ratio is
25%, then sales in Division T must be: $150,000

If sales for Division L increase $30,000 with a $9,000 increase in the Division's
traceable fixed expenses, the overall company net operating income should:
→
increase by $3,000

MYP Inc has a target rate of return of 20% and divisional managers will receive a
bonus each time their ROI exceeds this figure. X division has profits of $750,000 and
currently has capital employed of $3,000,000. A new, commercially-desirable project
will increase profits by $55,000 and add $150,000 to the asset value. The divisional
manager is likely to …. the project
-> accept

Division A of Aigburth Co is considering a project which will increase annual net

profit after tax by $30,000 but will require average inventory levels to increase by
$200,000. The current target rate of return on investments is 13% and the imputed
interest cost of capital is 12%. Based on the ROI and/or RI criteria would the project
be accepted? Roi - Yes, RI - YEs

From the options below, select the ONE statement which is NOT a disadvantage of
non-financial performance measures. b.Non-financial performance measures can be
quantified

Ben Company has two stores, P and Q. During April, Store P had a segment margin of
$8,000 and variable expenses equal to 65% of sales. Traceable fixed expenses for
Store Q were $18,000.

60,000

Division A of Aigburth Co is considering a project which will increase annual net

profit after tax by $30,000 but will require average inventory levels to increase by
$200,000. The current target rate of return on investments is 13% and the imputed
interest cost of capital is 12%. Based on the ROI and/or RI criteria would the project
be accepted?

ROI YES RI YES

Which of the following statements are valid criticisms of return on investment (ROI)
as a performance measure?

b.Its use may discourage investment in new or replacement assets

c.It is misleading if used to compare departments with assets of different ages

d.It is misleading if used to compare departments with different levels of risk

IL Ltd. is a software company that provides solutions to businesses around the world.The
directors are aware that low standards of efficiency compared to competitors have
contributed to the recent poor performance of the company. The CEO is very keen to use
the balanced scorecard approach to setting performance targets, and has set a target of
providing at least 70 hours of training each year for all its employees. From the options
below, choose the perspective of the Balanced Scorecard approach reflected by this target.

Innovation and learning perspective

Which of the following are examples of non-financial performance indicators? Quantity of

returned items in a period, Number of patents filed in a period, Number of customer
complaints

From the options below select the measure/measures that is/are not classified under the
financial perspective in the context of the balanced scorecard. Percentage market share,
Dividend per share

From the options below, select the factor/s that would be classified under the innovation and
learning perspective of the balanced scorecard. Percentage of staff suggestions for
improvement used by management, Health and safety training days per employee

Chap 8

A manufacturing company has the following information for Period 3, 20X1:

A B C D

Contribution (per unit) £14 £17 £20 £11

Labour hours required per 1 1.5 2 0.5

unit

Maximum demand (in units) 300 150 200 50

The firm produces four different products, A, B, C and D. The firm considers labour hours to
be a single limiting factor as there are only 500 labour hours available in Period 3 20X1 due
to an ongoing worker protest.

Which of the four different products will be the last to be produced in Period 3 20X1?

product C
From the options below, select the appropriate description of a by-product.
A product where the costs are not apportioned to it on completion of the process
From the options below, select the situation in which profit will be maximised for an
organisation which has a limiting factor.
The organisation is producing products which earn the highest contribution per limiting factor
B Mining Company currently is operating at less than 50% of practical capacity. The
management of the company expects sales to drop below the present level of 10,000 tons of
ore per month very soon. The sales price per ton is $3 and the variable cost per ton is $2.
Fixed costs per month total $10,000. Management is concerned that a further drop in sales
volume will generate a loss and accordingly is considering temporarily suspending
operations until demand in the metals markets rebounds and prices once again rise.
Management has implemented a cost reduction program over the past year, but at this point
suspension of operations appears to be the only viable alternative. Management estimates
that suspension of operations would reduce fixed costs from $10,000 to $4,000 per month.

At what sales volume per month will the company be indifferent between continuing to
operate the mine and closing it?

6000 tons

For decision-making purposes, avoidable costs are deemed to be relevant costs: True

Depreciation, for decision-making purposes, is never considered a relevant cost: True

"If the resale value of machinery used in a specific job, falls in value as a direct result
of that job, this would be considered a relevant cost" : False

"For decision-making purposes, all fixed costs are deemed to be non-relevant

costs" : True

K Ltd is preparing a quotation for a two-month consultancy project. Currently the company
employs a consultant on an annual salary of €60,000. This consultant is fully employed on
current projects and, if he were to be transferred to this new project, then an existing junior
consultant would be used to cover his current work. The junior consultant would be paid a
bonus of €8,500 for undertaking this additional responsibility.

Alternatively the company could hire an external consultant on a two month contract at a
cost of €7,000.

The relevant cost to be used in preparing the quotation is: €7,000

Teich Inc. is considering whether to continue to make a component or to buy it from

an outside supplier. The company uses 15,000 of the components each year. The unit
product cost of the component according to the company's absorption cost accounting
system is given as follows:... 15.55

X Plc manufactures two types of baby car seats, normal and deluxe.

The selling price of a normal car seat is $100 per unit. It has a variable cost per unit of $60.
The selling price of a deluxe car seat is $150 per unit and it has a variable cost per unit of
$80.
The plant capacity of producing the Deluxe seats is 150,000 units. Assuming that the
maximum market demand for normal car seats is 80,000 units and there is no such limitation
for deluxe car seats, what would be the ideal sales mix of the normal and deluxe car seats?
0 units of the normal car seat; 150,000 units of the deluxe car seat

Dockham Company

What is the minimum amount the company should accept for Product X if it is to be sold at
the split-off point?

$23,900

Skilled labour is currently employed by your company and paid at a rate of $18.00 per hour.
If a new job were undertaken it would be necessary either to work 35 hours’ overtime, which
would be paid at time plus one half, OR in order to carry out the work in normal time, reduce
production of another product that earns contribution of $24.00 per hour.

What is the relevant cost?

Answer: 945

General overheads of $5,000 are based upon the overhead absorption rate of $7.50 per unit
as set in the budget. The only general overhead cost that can be specifically identified with
the job is the time that has been spent in considering the costs of the job and preparing the
quotation. This amounted to $250.

What is the relevant cost? 0

Waxmaster Ltd is a manufacturer of candles, the firm operates with 400-500 hours per
period of excess labour capacity. This excess capacity in labour can undertake any
additional work that is provided to them.

The firm has recently received a customer order for a special type of candle that requires
5,000kgs of beeswax. The order is to be completed this period.
The procurement director reckons that the current cost of beeswax is £4.50 per kg in the
open market. Waxmaster does not currently use this ingredient regularly but they do have
500kg of this ingredient in inventory as a result of an erroneous order that was made a year
ago. The price for that order was at £4.30 per kg. This inventory could be sold for £2,000 in
its current state.

If the order is to go ahead, the firm will require 300 labour hours in the period to produce
these candles. The current wage rate in Waxmaster is £9 per hour.

This specific order is machine intensive and will drive the fixed cost of electricity from
£10,000 a period to £13,500. Electricity costs will go back to £10,000 a period once the order
is finished.

What is the total relevant cost of this customer order?

£25750 (Do not use commas when inserting your answer and round your answer to the
nearest whole number)

From the options below, select the one which is/ are relevant cost(s) for decision making.

Incremental costs, Variable costs, Opportunity costs, Product specific fixed costs
Milner Inc has been asked to carry out a systems amendment for Klopp Co. The amendment
will require 200 programmer hours, and Milner Inc has only one programmer who is capable
of doing the job.

The programmer is paid €50 per hour. Employers' NIC and pension contributions are 15% of
salary. Other overheads are absorbed by adding 150% to direct salaries.

The programmer is scheduled to start work on a project for another customer, Dalglish Co,
the revenue from which is €80,000 and non-salary direct costs are €2,000. This job will also
take 200 hours. If the programmer is assigned to the Klopp Co job, Milner Inc will have to
hire another programmer to carry out the Dalglish Co job at a cost of €30,000.

The relevant cost of the programmer's time if Milner Inc carries out the systems amendment
for Klopp Co is € 30,000

Which of the following are assumptions that are made in relevant costing?

Information about a decision is complete and reliable (có 1 cái thôi á?)

Kt1

A LtdS Company produces a single product. Last year, the company's net operating income
computed by the absorption costing method was $9,100, and its net operating income
computed by the variable costing method was $6,400. The company's unit product cost was
$17 under variable costing and $20 under absorption costing. If the ending inventory
consisted of 2,100 units, the beginning inventory in units must have been: 3,000

T uses a standard labour hour rate to charge its overheads to its clients’ work. During the
last annual reporting period production overheads were over-absorbed by 19,250. The
anticipated standard labour hours for the period were 38,000 hours while the standard hours
actually charged to clients were 38,500. The actual production overheads incurred in the
period were $481,250. The budgeted production overheads for the period were: $456,000
A company sells two products: M and N. The sales mix is expected to be $3.00 of sales of
Product M for every $5.00 of sales of Product N. Product M has a contribution margin ratio of
40% whereas Product N has a contribution margin ratio of 50%. Annual fixed expenses are
expected to be $259,000. The overall break-even point for the company in dollar sales is
expected to be closest to: $560,000

Which one of the following statements about ethical behaviour is true?

Ethical behaviour is not guided by well-defined rules and is often subjective

Under variable costing, fixed manufacturing overhead: The cost of special material which
will be purchased Immediately expensed as a period cost

A manufacturing company prepays its insurance

In a short-decision making context, which one of the following would be a relevant cost?
Đúng
The cost of special material which will be purchased

Management accounting is primarily concerned with:

Providing managers with relevant information to help achieve organizational goals

Which of the following costs would be included as part of factory overhead?

a.Depreciation of plant equipment

Which of the following production costs, if expressed on a per unit basis, would be most
likely to change significantly as the production level varies? Fixed manufacturing overhead

W Company uses a job-order costing system to account for product costs. The following
information pertains for a period: Materials placed into production: $140,000; Indirect labour:
$40,000; Direct labour (10 000 hours): $160,000; Depreciation of factory building: $60,000;
Other factory overhead: $100,000; Increase in work-in-process inventory: $30,000; Factory
overhead rate is £18 per direct labour hour. What is the total amount debited to Finished
Goods Inventory for the period? 45000
Cost-volume-profit analysis is used primarily by management: As a planning tool

Managers do not use management accounting information to ________

Help external users such as investors, banks, regulators, and suppliers
A company estimates that net profit of $255,000 would be earned when it produces and sells
10,000 units of product S each month. At this level of activity, the company consumes 9,000
machine hours and 5,000 direct manufacturing labor hours at the rate of $32 per labor hour.
The following information is available on product S: Direct material per unit: $32; Variable
manufacturing overhead costs per unit: $7; Fixed manufacturing overhead costs: $200,000;
Selling and administrative expenses costs: $420,000. If the company uses the absorption
costing approach to cost-plus pricing, the required markup for product S would be closet to:
90%

A manufacturing company prepays its insurance coverage for a three-year period. The
premium for the three years is $2,100 and is paid at the beginning of the first year. Sixty
percent of the premium applies to manufacturing operations and forty percent applies to
selling and administrative activities. What amounts should be considered product and period
costs respectively for the first year of coverage? Product costs: $420; period costs: $280

The A corporation has 2 service departments as follows: Service department 1 incurred the
costs of $2,560,000 to provide 20 units to service department 2, 50 units to the production
department, 30 units to sales department and 15 units for self-usage. Service department 2
incurred the costs of $988,000, to serve 4 and 5 employees at service department 1, 2,
respectively, 40 employees at production department, and 10 employees at sales
department. Using the step-down method, the unit cost of service department 2 could be
allocated to production department: $30,000

THT Ltd. that sells a single product N in a situation of financial difficulty. Financial
information related to the product N as follows: the quoted selling price of $100 per unit, a
gross profit margin ratio of 40%, and 100% of mark-up ratio under marginal costing
approach for pricing. There is an overseas infrequent customer ordering product N. The unit
selling price which THT Ltd. is willing to accept the order from this overseas customer will
be: 60

W Ltd produces a single product. The budgeted fixed production overheads for the period
are $500,000. The budgeted output for the period is 2,000 units. There were 800 units of
opening inventory at the beginning of the period and 500 units of closing inventory at the end
of the period. If absorption costing principles were applied, the profit for the period compared
to the marginal costing profit would be:

$75,000 lower

For the coming year, D plc’s variable costs are budgeted to be 60% of sales dollars
and fixed costs are budgeted to be 10% of sales dollars. If sales price increases by
10%, but if total fixed costs, unit variable costs, and sales volume remain the same,
the effect on D plc’s marginal contribution would be: An increase of 25%

Which of the following is not an example of committed fixed cost? Advertising

expenses for a specific product
The A corporation has 2 service departments as followsfmachine hours and 5,000
direct labor hours to produce and sell 10,000 units K yearly. The direct labor costs are
$25 per unit K, and the rate of each direct labor hour is $15. Total variable production
costs are $175,000,000 per year. Total fixed production costs are $425,000,000 per
year. All selling and administrative expenses are fixed costs of $150,000,000 annually.
If A Ltd. wants to make a profit of $175,000,000 each year, the mark-up percentage of
pricing under the marginal costing approach is: All are incorrect

Mn làm câu bị trùng nhiều quá rồi ấy

Which one is the correct statement?

a.

The direct method has the disadvantage that it may leave some service department costs
unallocated

b.

Sales dollar would be the most appropriate allocation base to allocate the cost of a human
resources department to other departments

c.

For performance evaluation purposes, budgeted service department costs should be

allocated to operating departments

not sure

d.

In step-down methods of allocating service

department costs, the cost of service departments could be allocated each other reciprocally

Under variable costing, fixed manufacturing overhead: Immediately expensed as a

period cost

A manufacturer of food and beverages is considering the following actions. Which of

these is likely to increase its contribution margin ratio?

a. Introducing the programs of total quality management to improve product quality

b. Reducing exports to countries where there is intense price competition
c. Offering sales team a higher commission if they sell the products which have higher
selling prices
d. All are correct

Này câu nào z, t mạnh dạn đoán B ( Phú)

Nathan Corporation had production overhead cost at various levels of activity for the
year 20x0 as below: $164,000 Đúng hong??

cuisii
Sufra Corporation is planning to sell 125,000 units for $2.50 per unit and will break even
at this level of sales. Fixed expenses will be $90,000. What are the company's variable
expenses per unit? $1.78
Which of the following is true of master budgets?
They aid in coordinating what needs to be done to implement a plan

Tucker's sales budget is as follows: January: €182,000, February: €320,000, March:

€354,000. 20% of sales are paid for immediately in cash. Of the credit customers, % in the
month following the sale and are entitled to a 2% discount. The remaining customers pay
two months after the sale is made. What is the value of sales receipts shown in the
company's cash budget for March?
€258,512

Which of the following production costs, if expressed on a per unit basis, would be most
likely to change significantly as the production level varies?
→ Fixed manufacturing overhead

seamons corporation has the following information available on product K

→ 852,000

The R Company's income statement for May is given below:

→ Increase 3,000

San Antonio Corporation manufacturers a part for its production cycle. The costs per unit for 5,000
units of this part are as follows:
→ Make $20,000

Which of the following statements are TRUE or FALSE?

True
The markup over cost under the absorption costing approach would decrease
if the unit product cost increases, holding everything else constant.

The absorption costing approach to cost-plus pricing will result in attaining the True
company's required rate of return only if forecasted unit sales are realized.

In target costing, the cost of a product is the starting point and the selling price False
follows from the cost. ̣ko chắc

Under the absorption approach to cost-plus pricing described in the text, all False
fixed costs are included in the cost base in setting a selling price.
 If the formula for the markup percentage on absorption cost is used for setting False
prices, then the company's desired return on investment (ROI) will be attained
regardless of how many units are actually sold.

"Cost-plus" pricing means that all costs—manufacturing, selling, and False

administrative—are included in the cost base from which the target selling
price is derived.
Town and country auto repair uses time and material pricing. The body shop

→ $890

Sam Technologies, currently sells 17" monitors for $270. It has costs of $210. A
competitor is bringing a new 17" monitor to market that will sell for $230. Management
believes it must lower the price to $230 to compete in the market for 17" monitors. Sam
believes that the new price will cause sales to increase

→ 190,000

Which of the following is not an example of committed fixed cost?

→ Advertising expenses for a specific product

Ben Company has two stores, P and Q. During April, Store P had a segment margin of
$8,000 and variable expenses equal to 65%

→ 60,000

From the options below, select the best definition of a flexible budget.

A budget which shows costs and revenues at different activity levels

A company manufactures a single product, M. Budgeted production output of product M

during August is 200 units. Each unit of product M requires 6 labour hours for completion
and PR Co anticipates 20 per cent idle time. Labour is paid at a rate of $7 per hour. What is
the direct labour cost budget for August? 10,500

S Inc. manufactures a variety of products. Variable costing net operating income was
$86,800 last year and ending inventory increased by 1,900 units. Fixed manufacturing
overhead cost was $6 per unit. What was the absorption costing net operating income
last year? $98,200
A company sells two products: M and N. The sales mix is expected to be $3.00 of
sales of Product M for every $5.00 of sales of Product N. Product M has a contribution
margin ratio of % whereas Product N has a contribution margin ratio of 50%. Annual
fixed expenses are expected to be $259,000. The overall break-even point for the
company in dollar sales is expected to be closest to: $560,000

In a short-decision making context, which one of the following would be a relevant

cost?The cost of special material which will be purchased

Managers do not use management accounting information to

Help external users such as investors, banks, regulators, and suppliers

From the options below, select the one which is NOT an advantage of marginal cost plus
pricing Ensures fixed overheads are recovered in the long-term

To estimate what the profit will be at various levels of activity, multiply the number of
units to be sold above or below the break-even point by the unit contribution margin.
True

Which one of the following statements about ethical behaviour is true? -> Ethical
behaviour is not guided by well-defined rules and is often subjective

Management accounting is primarily concerned with

Providing managers with relevant information to help achieve organizational goals

Each unit of product Echo takes five direct labour hours to make. Quality standards are high,
and 8% of units are rejected after completion as sub-standard. Next month's budgets are as
follows: Opening inventories of finished goods: 3,000 units. Planned closing inventories of
finished goods: 7,600 units. Budgeted sales of Echo: 36,800 units. All inventories of finished
goods must have successfully passed the quality control check. What is the direct labour
hours budget for the month?

225,000 hours

Which of the following are examples of non-financial performance indicators?

Select ALL that may apply:
Number of patents filed in a period

Quantity of returned items in a period

Number of customer complaints

Susan sells luxury, handmade bathing soaps. She has a marketing offer where bathing
soaps sold alongside two small bottles of fragrance will be charged at a special promotional
price.
From the options below, select the term which best describes Susan's pricing strategy:
Product bundling

Chan Company has two divisions, S and T. The company's overall contribution margin ratio
is 30% when sales in the two divisions total $750,000. If variable expenses are $450,000 in
Division S, and if Division S's contribution margin ratio is 25%, then sales in Division T must
be: 150,000

A manufacturing company prepays its insurance coverage for a three-year period. The
premium for the three years is $2,100 and is paid at the beginning of the first year. Sixty
percent of the premium applies to manufacturing operations and forty percent applies to
selling and administrative activities. What amounts should be considered product and period
costs respectively for the first year of coverage? Product costs: $420; period costs: $280

S Company produces a single product. Last year, the company's net operating income
computed by the absorption costing method was $9,100, and its net operating income
computed by the variable costing method was $6,0. The company's unit product cost was
$17 under variable costing and $20 under absorption costing. If the ending inventory
consisted of 2,100 units, the beginning inventory in units must have been: 3,000

Cost-volume-profit analysis is used primarily by management: As a planning tool

The S Company makes and sells a single product, Product R. Budgeted sales for May are
$300,000. Gross Margin is budgeted at 30% of sales dollars. If the net income for May is
budgeted at $,000, the budgeted selling and administrative expenses are:

$50,000

Management information is used at different levels of the organization.

(i) Information used by strategic management tends to be summarised
(ii) Information used by strategic management tends to be forward looking
(iii) Information used by operation management tends to contain estimates
(iv) Information used by operation management tends to be required frequently

Which of the above statements are true? (i), (ii) and (iv) only

Which of the following statements is correct in describing manufacturing overhead?

Manufacturing overhead consists of all manufacturing cost except for prime cost.

Babuca Corporation has provided the following production and total cost data for two levels
of monthly production volume. The company produces a single product. $91.20

Black Corporation's sales are $600,000, its fixed expenses are $150,000, and its variable
expenses are 60% of sales. The margin of safety is: $225,000

S Inc. manufactures a variety of products. Variable costing net operating income

was $86,800 last year and ending inventory increased by 1,900 units.

98,200

Bristo Corporation has sales of 2000 units at $ per unit. Variable expenses are 35% of the
selling price. If total fixed expenses are $42,000, the degree of operating leverage is: 5.2

The company A owns a machine Z1 which has not been used for many months.
Currently, the company A is considering to use this machine for a special production
contract within one year. The carrying amount of machine Z1 is $100,000, but it would
now cost $150,000 to replace. If not being used for this contract, the machine Z1 could
be sold at $120,000 for scrap. However, after one-year usage for this special contract,
the estimated salvage value of the machine Z1 is nil and the cost to liquidate is $10,000.
This machine has no other use. What is the relevant cost of machine Z1 when deciding
whether or not to accept this special production contract? $130,000

For the coming year, D plc’s variable costs are budgeted to be 60% of sales dollars and
fixed costs are budgeted to be 10% of sales dollars. If sales price increases by 10%, but
if total fixed costs, unit variable costs, and sales volume remain the same, the effect on
D plc’s marginal contribution would be: An increase of 25%

Under variable costing, fixed manufacturing overhead:

Immediately expensed as a period cost

Which one of the following statements about ethical behaviour is true? Ethical
behaviour is not guided by well-defined rules and is often subjective

Castil Corporation makes and sells a product called a Miniwarp. One Miniwarp requires
2.5 kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the
next five months is as follows: August: 20,00 units, September: 20,900 units, October:
20,800 units; November: 20,600 units, December: 21,300 units. The company wants to
maintain monthly ending inventories of Jurislon equal to 20% of the following month's
production needs. On July 31, this requirement was not met since only 9,700 kilograms
of Jurislon were on hand. The cost of Jurislon is $5.00 per kilogram. The company wants
to prepare a Direct Materials Purchase Budget for the next five months. The total cost of
Jurislon to be purchased in August is: $253,750
Z Ltd. prepares to flexible budget for production costs as follows

Capacity 80% 90%

Direct material costs 2,0,000 2,700,000

Direct labor costs 2,120,000 2,160,000

Manufacturing overhead costs 4,060,000 4,080,000

Determine total production costs at the level of 83% of maximum capacity:

8,688,000

Which of the following costs would be included as part of factory overhead?

a.Depreciation of plant equipment

Derst Inc. sells a particular textbook for $36. Variable expenses are $29 per book. At the
current volume of 58,000 books sold per year the company is just breaking even. Given
these data, the annual fixed expenses associated with the textbook total: 6000

Which of the following is not an example of committed fixed cost? Advertising

expenses for a specific product

In a CVP graph, the anticipated profit or loss at any given level of sales is measured by
the vertical distance between the total revenue line (sales) and the total fixed expense
line. False

Which of the following costs would be included as part of factory overhead?

Depreciation of plant equipment

The S Company makes and sells a single product, Product R. Budgeted sales for
May are $300,000. Gross Margin is budgeted at 30% of sales dollars.

$50,000

Flesch Corporation produces and sells two products. In the most recent month, Product
C90B had sales of $24,000 and variable expenses of $6,480. Product Y45E had sales of
$29,000 and variable expenses of $11,010. The fixed expenses of the entire company
were $32,280. If the sales mix were to shift toward Product C90B with total dollar sales
remaining constant, the overall break-even point for the entire company:
→ would decrease

Last year Easton Corporation reported sales of $900,000, a contribution margin

ratio of % and a net loss of $42,000. Based on this information, the break-even
point was:

$1,005,000

Sunk costs are:

Cannot be avoided

The following information relates to last year's operations at the Paper Division of
Double A Corporation: Minimum required rate of return: 15%

Return on investment (ROI): 18%

Sales: $810,000

Turnover (on operating assets): 5 times

What was the Paper Division's net operating income last year? $29,160

B Corporation is working on its direct labor budget for the next two months. Each unit
of output requires 0.05 direct labor-hours. The direct labor rate is $7.50 per direct labor-
hour. The production budget calls for producing 9,100 units in May and 8,800 units in
June. If the direct labor work force is fully adjusted to the total direct labor-hours
needed each month, what would be the total combined direct labor cost for the two
months? $6,712.50

Budgeted sales of X for December are 18,000 units. At the end of the production
process for X, 10% of production units are scrapped as defective. Opening
inventories of X for December are budgeted to be 15,000 units and closing
inventories will be 11,0 units. All inventories of finished goods must have
successfully passed the quality control check. What is the production budget for X
for December? 16,000 units

For the coming year, D plc’s variable costs are budgeted to be 60% of sales dollars and
fixed costs are budgeted to be 10% of sales dollars. If sales price increases by 10%, but
if total fixed costs, unit variable costs, and sales volume remain the same, the effect on
D plc’s marginal contribution would be: An increase of 25%

Managers do not use management accounting information to ________. Help external

users such as investors, banks, regulators, and suppliers

P Ltd. manufactures rustic furniture. The cost accounting system estimates

manufacturing costs to be $2 per table, consisting of 60% variable costs and % fixed
costs. The company has surplus capacity available. It is P Ltd.'s policy to add a 75%
markup to full costs.

A large hotel chain is currently expanding and has decided to decorate all new hotels
using the rustic style. P Ltd. is invited to submit a bid to the hotel chain. What per unit
price will P Ltd. most likely bid on this long-term order? 420

The finance manager for Halfway Ltd is responsible for preparing the following reports
for the firm: (I) Statement of profit or loss; (II) Statement of financial position; (III) Cash
flow forecast for the next 5 years; (IV) Sales budget for the next 5 years, (V) Monthly
operating statements for 3 of Halfway’s divisions. Which of these is/are an example of
feedforward control? III&IV ( hok chac)

Which one of the following statements about ethical behaviour is true? Ethical
behaviour is not guided by well-defined rules and is often subjective

The smaller the contribution margin ratio, the smaller the amount of sales required to
cover a given amount of fixed expenses. False

In a short-decision making context, which one of the following would be a relevant cost?

Ferkil Corporation manufacturers a single product that has a selling price of $30.00 per
unit. Fixed expenses total $66,000 per year, and the company must sell 5500 units to
break even. If the company has a target profit of $16,500, sales in units must be: 6875
units

The cost of special material which will be purchased

Furniture, Inc., estimates the following number of mattress sales for the first four
months of 20x6: January: 22,000; February: 30,800; March: 28,600; April: 35,200.
Finished goods inventory at the end of December is 6,600 units. Target ending finished
goods inventory is 20% of the next month's sales. How many mattresses should be
produced in the first quarter of 20x6? 81,8 mattresses

G Co's entire machine capacity is used to produce essential components. The costs of
using the machines are as follows:

- Variable costs $24,000

- Fixed costs $55,000

If all the components are purchased from an outside supplier, the machines could be
used by G Co. to produce other items for automobile manufacturers which would earn
a total contribution of $38,000.

From the options below, select the maximum price that a profit-maximising company
should be willing to pay to the outside supplier for the components. 62,000

Northern Pacific Fixtures Corporation sells a single product for $28 per unit. If variable
expenses are 65% of sales and fixed expenses total $9,800, the break-even point is:
$28,000

San Antonio Corporation manufacturers a part for its production cycle. The costs per
unit for 5,000 units of this part are as follows: Make $20,00

W Ltd produces a single product. The budgeted fixed production overheads for the
period are $500,000. The budgeted output for the period is 2,000 units. There were 800
units of opening inventory at the beginning of the period and 500 units of closing
inventory at the end of the period. If absorption costing principles were applied, the
profit for the period compared to the marginal costing profit would be:

$75,000 lower

For the coming year, D plc’s variable costs are budgeted to be 60% of sales dollars and
fixed costs are budgeted to be 10% of sales dollars. If sales price increases by 10%, but
if total fixed costs, unit variable costs, and sales volume remain the same, the effect on
D plc’s marginal contribution would be: An increase of 25%

The Waverly Company has budgeted sales for next year as follows: Sales in units: 1st
Quarter – 12,000; 2nd Quarter – 14,000; 3rd Quarter – 18,000; 4th Quarter – 16,000. The
ending inventory of finished goods for each quarter should equal 25% of the next
quarter's budgeted sales in units. The finished goods inventory at the start of the year is
3,000 units. Scheduled production for the third quarter should be: 17,500
Moyas Corporation sells a single product for $20 per unit. Last year, the company's
sales revenue was $300,000 and its net operating income was $24,000. If fixed expenses
totaled $96,000 for the year, the break-even point in unit sales was: 12,000 units
Alpha Corporation reported the following data for its most recent year: sales,
$520,000; variable expenses, $320,000; and fixed expenses, $150,000. The
company's degree of operating leverage is closest to: 4.00

Holdings Inc. consists of two districts, A and B. The company as a whole had sales of
$0,000, a contribution margin ratio of 25% and a combined segment margin totaling
$35,000. District A had sales of $90,000 during May, a contribution margin ratio of 45%,
and a segment margin of $16,000. If the net operating income of Holdings Inc. for May
is $12,000, the traceable fixed expenses in District B must have been: ,500

From the options below, select the one that shows the right combination of
financial statements that would be included in a master budget.

A budgeted profit and loss account, balance sheet and cash flow statement

In which of the following situations would the use of the imposed budgets not be
appropriate? In decentralized organizations and acting autonomously

From the options below, select the purpose of a monthly cash budget. to determine
whether there will be sufficient cash in the bank to meet requirements

Division A of Aigburth Co is considering a project which will increase annual net profit
after tax by $30,000 but will require average inventory levels to increase by $200,000.
The current target rate of return on investments is 13% and the imputed interest cost of
capital is 12%. Based on the ROI and/or RI criteria would the project be accepted?

RI yes

ROI Yes

S Ltd. currently sells motor boats for $60000 : $43,000

A budget should/ can do all of the following, except: Be prepared by managers from
different functional areas working independently of each other