MA1 TEST

Q1: a company currently uses absorption costing. The following information relates to product X for month 1:

Opening inventory nil

Production 900 units

Sales 800 units

If the company had used marginal costing, which of the following combination would be true?

PROFIT INVENTORY

A would be higher would be higher

B would be higher would be lower

C would be lower would be higher

D would be lower would be lower

Q2 Are the following statements about marginal costing TRUE or FALSE?

1 inventory value will always be lower then using absorption costing.

2 profits will always be higher than when using absorption costing.

STATEMENT 1 STATEMENT 2

1 TRUE TRUE

2 TRUE FALSE

3 FALSE TRUE

4 FALSE FALSE

Q3 the following information relates to the production department of bind Co for the month of march:

Material x (kg) material y (kg)

Opening inventory 0 0

Closing inventory 25 15

Purchase 100kg= $12500 75kg= $15000

Product A was produced using 20kg of material X and 15 kg of material Y.

Product B was produced using the remaining amounts of material X and Y.

What is the direct material cost of product B for march?

1 $6875

2 $15875

3 $21375

4 $22000

Q4 the following statements are about timesheets.

(1) A timesheet is likely to contain enteries relating to numerous employees.

(2) Timesheet information can be used to provide a basis for billing cilents for services provided.

Are the statements true or false?

(1) Both statements are true

(2) Both statements are false
(3) Statement 1 is true and statement 2 is false
(4) Statement 1 is false and statement2 is true

Q5 a company plans to use the following coding system to record the details of its company vehicles;

1111 company van,white,diesel engine,located in London.

1221 company van, red, petrol engine, located in London.

2122 company car, white, petrol engine, located in Birmingham.

Which type of coding system is being considered?

(1) Hierarchial
(2) Sequential
(3) Faceted
(4) Mnemonic

Q6 a firm currently produces 4500 units per week at 90% efficiency. The direct labour cost is $9000.

What will be the direct labour cost per unit (to two decimal places of $) if efficnecy can be increased to
100%?

(1) $1.82
(2) $1.80
(3) $2.20
(4) $2.22

Q7which of the following are main purpose of cost coding?

(1) To enable a logical and systematic arrangements of costing records.

(2) To facilitate electronic data processing
 (3) To provide confidentially
(4) To share production costs between products.
(A) 2 and 3 only
(B) 3 and 4 only
(C) 1 and 2 only
(D) 1,2,3 and 4

Q8 which of the following statements concering the recording and analysis of sales are true?

(1) The sales figure that should be taken from an invoice is net of both trade discount and sales tax.
(2) Sales may be analysed in a number of different ways for management accounting purposes.
(A) Both 1 and 2
(B) 1 only
(C) 2 only
(D) Neither 1 and 2

Q9 an organization has the following total costs at three activity levels;

Variable cost per unit is constant within this activity range and there is a step up of 10% in the total fixed
costs when the activity level exceeds 5500 units.

What is the total cost at an activity level of 5000 units?

Activity level(units) 4000 6000 7500

Total cost $ 40800 50000 54800

(A) $44000
(B) $44800
(C) $45400
(D) $46800

Q10 the cost card of an electronic component made by DEL ltd is;

Direct labour $2.00

Direct materials $22.50

Variable overheads $2.50

Fixed overheads $3.00

The price is set to give a profit nargibn of 25%. The price should be ?

(a) $33.75
(b) $36
(c) $37.50
(d) $40
Q11 a company produces two types of garden sheds, the traditional and the modern , which requires 10 and
16 labour hours respectively . the budgeted data for the next period is as follows;

Traditional modern

Sales 7500 12000

Opening inventory 1800 2400

Of finished goods

Closing inventory of finished goods are expected to be reduced by 50%.

What are the total budgeted labour hours for the next period?

(a) 295200
(b) 267000
(c) 238800
(d) 210600

Q12 costs are classified as fixed or variable on basis of

(a) Specific activity

(b) Given time period
(c) Common activity
(d) Both a and b

Q13 in responsibility accounting system

(A) Budgets are prepared

(B) Actual performance is recorded
(C) The performance is reported
(D) All of the above

Q14 from the following calculate operating profit ratio: opening stock 10000; purchases 120000; revenue
from operations 400000; purchase returns 5000; return from revenue from operations 15000; selling
expenses 70000; administrative expenses 40000; closing stock 60000.

(A) 56.81%
(B) 54.55%
(C) 45.45%
(D) 58.54%

Q15 net operating profit ratio determines ……………… while net profit ration determines ………..

(A) Overall efficiency of the business , working efficiency of the management.

(B) Overall efficnecy of the management , woring efficiency of the business.
(C) Overall efficiency of the external market, working efficiency of the internal management.
 (D) None of the above.

Q16 the following data relates to production activity in a cost centre for a period:

Budgeted actual

Output(units) 9600 9400

Labour(hours) 2400 2320

What was the efficiency ratio in the period( to one decimal place)?

(a) 96.7%
(b) 97.9%
(c) 98.7%
(d) 101.3%

Q17 if COGS = Rs 50000 GP margin = 25% of sales what will be value of sales?

(A) Rs 20000
(B) Rs 66667
(C) Rs 62500
(D) None of the above

Q18 total production costs and output over three periods have been:

Period production cost output

1 $230485 12610 units

2 $254554 14870 units

3 $248755 14350 units

What are the estimated variable production cost per unit if the high low method is applied?

(A) $10.50
(B) $ 10.65
(C) $ 11.15
(D) $ 15.50

2400 units of component C valued at a price of $6 each were in inventory on 1 march. The following receipt
and issues were recorded during march

3rd march received 4000 units at $6.20 per unit

12 march received 2000 units at $6.86 per unit

23 march issued 5100 units at $

Q19 using the weighted average price method of inventory valuation what is the total value of the
components remaining in inventory on 23rd march?

(A) $ 19800
(B) $ 20460
(C) $ 20790
(D) $ 22638

Q20 which of the following relating to raw material pricing in a situation where raw material prices are rising
constantly

1 production costs will be lower using weighted average pricing rather than LIFO

2 profits will be higher using LIFO pricinbg rather than FIFO

3 inventory values will be lower using FIFO pricing rather than weighted average.

(A) Statement 1 is true but statement 2 and 3 false

(B) Statement 1 and 2 are true but 3 is false
(C) Statement 1 and 3 are true but 2 is false
(D) Statement 2 and 3 are true but 1 is false