Huzaifa and Imitsal

1. Which is part of the prime cost for a bicycle manufacturing company?
A. Canteen costs relating to the staff canteen

B. Salary for a supervisor who supervises ten direct labour employees
C. Cost of plastic used to make bicycle seats
D. Maintenance cost of bicycle tyre-making machine
2. The unit cost structure of a product based on producing and selling 20,000 units in a
period is shown below:
$ per unit
Variable cost 15
Fixed overheads 10
Total unit cost 25
Based on this unit cost structure, what would be the cost per unit if 25,000 units
of the product are produced and sold in a period?
_____
3. Which formulae can calculate the labour capacity utilisation ratio?
A.Standard hours of actual output ÷ actual hours
B.Actual hours ÷ standard hours of budgeted output
C.Standard hours of actual output ÷ standard hours of budgeted output
D.Actual hours ÷ standard hours of actual output
4.Which of the following describes the labour efficiency ratio?
A.Measures whether total direct labour hours worked were greater or less than
budgeted
B.Measures how expected labour hours for actual production output for a period
compares with the budgeted hours
C.Measures the proportion of available hours that were lost through no fault of
the workforce
D.Measures whether the production output took more or less time than expected
5. A company uses the machine hours method to depreciate the machinery in its
factory. A machine that costs $120,000 has an estimated residual value of
$30,000 at the end of its four-year useful operating life.
Usage over the four years is expected to be:
Year usage (days)
1 210
2 190
3 175
4 100
What is the depreciation charge for the machine in Year 3?
A.$23,333
B.$31,111
C.$38,889
D.$76,667
6. . Costs are determined for different manufacturing jobs. A markup is applied to
each total job cost (manufacturing and non-manufacturing costs) to achieve a
target profit margin. The completed Job 163 has total manufacturing costs of
$734. Non-manufacturing overheads are absorbed at 10% of the selling price. The
target profit margin is 6% of the selling price.
What is the selling price of Job 163 (to the nearest $)?
A.$874
B.$851
C.$864
D.$859
7. . The following data relates to material H.
Date transaction Units Unit price $ Value $
1 Jun Balance b/f 300 2.50 750
3 Jun Issue 100
7 Jun Receipt 250 2.80 700
15 Jun Issue 270
26 Jun Receipt 350 2.40 840
30 Jun Receipt 140 2.60 364
If the FIFO valuation method is used, what is the value of the issue on 15 June?
A. $675
B. $696
C. $750
D. $756
8. Which variables are relevant in calculating economic order quantity (EOQ)?

Order Costs
Finance charge on capital (interest charge)
A.1 only
B.2 only
C.Both 1 and 2
D.Neither
9. The following information is given for three products with joint processing costs of
$45,000.
Product Product Output (kg) Selling price per kg
A 5,000 $10
B 4,000 $8
C 6,000 $4
Joint costs are apportioned based on physical output.
What is the gross profit $ per kg of product B?
_____
10. Dromio Co manufactures three joint products: X, Y and Z. The following data has
been extracted from the company's accounting records for the month.
X Y Z
Selling price ($ per unit) 50 75 100
Production and sales (units) 600 480 300
Selling expenses ($) 7,000 5,000 4,000

Joint costs amount to $65,000.
If joint costs are apportioned based on sales value, what is the net profit made by
Product Y in the month?
_____
11. . A company incurs the following unit costs on its single product:
$ per unit
Prime costs 10.35
Variable manufacturing overheads 1.05
Fixed manufacturing overheads 7.20
Variable non-manufacturing overheads 0.90
Fixed non-manufacturing overheads 2.95

23,000 units of the product were sold in a period during which 23,600 units were
manufactured. The inventory of the product at the end of the period was 940 units.
What is the difference in profit for the period comparing absorption costing with
marginal costing?
$4,320
$6,090
$6,768
$9,541
12. These statements relate to the management of raw materials:
1.holding costs per unit of stock would increase;

2.the economic order quantity would decrease;
3.average stock levels would increase;
4.total ordering costs would decrease.
Which of the above would result from introducing buffer (safety) stocks?
A.(iii) only
B.(ii) and (iii) only
C.(ii), (iii) and (iv) only
D.(i), (ii), (iii) and (iv)
13. A company has calculated its profits using marginal and absorption costing
principles. Marginal costing reported a profit of $200,000, whereas absorption costing
reported a profit of $180,000.
The company's fixed production overhead absorption rate is $40 per unit. Actual
production for the period was 5,000 units.
How many units must have been sold in the period?
_____
14. A sports drink requires 0.45 litres of water in each finished bottle, but 10% of the
water is lost during the drink-making process. Sales are expected to be 2,000 bottles in
May. The company wants to increase inventory by 300 bottles over May.
1. What is the expected usage of water in May (to the nearest litre)?
_____
15. Which is a common feature of cost accounting but not financial accounting?
A. Control accounts
B. Cost classification
C. Marginal costing
D. Periodic stocktaking
16. The following classifications may be applied to costs:

direct
fixed
period
production
Which of the above classifications could be applied to the cost of raw materials a
company uses to manufacture its range of products?
A.(i) only
B.(i) and (iv) only
C.(ii) and (iii) only
D.(ii), (iii) and (iv) only
17. The following summary data is provided for two periods:
Production costs ($) Output (units)
Period 1 48,981 29,720
Period 2 55,893 35,480
Using the high-low method, what are the estimated fixed costs $ per period?
A.$6,912
B.$13,317
C.$24,214
D.$26,326
18. ai usually works a 40-hour week at $20 per hour. Last week he was paid
overtime at time and a half for an extra three hours of work at the request of the
customer.
What value of Jai’s wages should be treated as direct costs?
A.$800
B.$830
C.$860
D.$890
19. . At the beginning of the year, a company had 3,000 employees. During the
year, 1,000 new employees were recruited, but 600 of these were to replace
employees who had resigned during the year. The remainder were to staff an
expansion of the business.
What was the labour turnover rate for the year (to one decimal place)?
A.18.8%
B.17.1%
C.15.0%
D.17.6%
20. G Co makes two products, Blue and Green, from a common process. Common
process costs are apportioned based on sales value. The following data is available:
Product Blue Green
Selling price per unit at the split-off point $ 4.40 7.20
Selling price after further processing $ 5.00 10.00
Output (units) 12,000 11,000
Common costs $ 47,500

Which amount of the common process costs $ in the period will be apportioned
to Product Green?
A.$22,717
B.$28,500
C.$29,483
D.$30,735

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1. Which is part of the prime cost for a bicycle manufacturing company?

A. Canteen costs relating to the staff canteen

1 Jun Balance b/f 300 2.50 750

3 Jun Issue 100

7 Jun Receipt 250 2.80 700

15 Jun Issue 270

26 Jun Receipt 350 2.40 840

30 Jun Receipt 140 2.60 364

8. Which variables are relevant in calculating economic order quantity (EOQ)?

Product Product Output (kg) Selling price per kg

Selling price ($ per unit) 50 75 100

Production and sales (units) 600 480 300

Selling expenses ($) 7,000 5,000 4,000

Prime costs 10.35

Variable manufacturing overheads 1.05

Fixed manufacturing overheads 7.20

Variable non-manufacturing overheads 0.90

Fixed non-manufacturing overheads 2.95

12. These statements relate to the management of raw materials:

1.holding costs per unit of stock would increase;

16. The following classifications may be applied to costs:

Product Blue Green

Selling price per unit at the split-off point $ 4.40 7.20

Selling price after further processing $ 5.00 10.00

Output (units) 12,000 11,000

Common costs $ 47,500

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