Download All 50 questions are compulsory and MUST be attempted - SAA-GE

All 50 questions are compulsory and MUST be attempted
Each question is worth 2 marks.
The following information relates to questions 1 to 2.
The inventory record for component BXY for the month of January showed:
Receipts
Opening inventory
4 January
11 January
18 January
19 January
25 January
31 January
500
1,000
1,600
1,200
Value
$
1,250
2,750
4,480
3,480
Issues
2,100
1,500
4,350
1,800
1
Using the FIFO method of pricing issues, the cost of issues during the month was:
A
B
C
D
$11,250
$10,800
$10,850
$11,300
2. Using the AVCO method of pricing, at what price would the issues on 31 January be
made? (Calculate to two decimal places.)
A
B
C
D
$3.00
$2.95
$2.90
$2.83
MA1 Mock Exam Septermber 11
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The following spreadsheet is for question 3, 4, 5
3. In the spreadsheet, what is the formula in F13?
A
B
C
D
=SUM(B15:E15)
=COUNT(B15:E15)
=TOTAL(F10:F12)
=TOTAL(B15:E15)
4. In the spreadsheet, which of the following correctly give the value in D6?
i. =D5*$B$18
ii. =D5*B18
iii. =$127,700
A
B
C
D
i, iii
i, ii
ii, iii
All three
5. In the spreadsheet, which of the following correctly give the value in E8?
i. =E6 – E7
ii. =191,549 – 119,718
A
B
C
D
i
ii
i, ii
NONE
MA1 Mock Exam Septermber 11
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6. Which of the following would be classified as an overhead?
A
B
C
D
Overtime premium when the overtime was worked at the customer’s request
Overtime premium when the overtime worked was because of a machine breakdown
Payments to staff on a piece-work scheme
The basic pay relating to overtime hours
7. Payments to suppliers are entered into an integrated computerised accounting system.
Which of the following does not happen when these payments are entered into the
computerised system?
A
B
C
D
The supplier's individual account is updated in the purchase ledger/payables ledger.
The creditors control account in the nominal ledger (main ledger) is debited.
The bank account in the nominal ledger is credited.
The debtors control account in the nominal ledger is credited.
8 What is the term associated with charging a specific item of overhead cost to one
particular department?
A
B
C
D
Absorption
Allocation
Apportionment
Re-apportionment
9 You are presented with the following information about sales and costs for a business
that makes and sells a range of products.
£
Sales revenue
320,000
Direct costs
(100,000)
Production overhead costs
(150,000)
70,000
Other overhead costs
50,000
The business uses absorption costing. There were no opening or closing stocks of the
product. Budgeted production overhead costs were £80,000. Actual production
overheads were £78,000 and absorbed production overheads were £75,000.
What profit would be reported for the period, using absorption costing?
A
B
C
D
£15,000
£17,000
£20,000
£23,000
MA1 Mock Exam Septermber 11
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10. Management has asked for a report showing the annual sales and profits for its three
products for the year just ended. The report could be presented in either an
absorption costing or a marginal costing format. Which of the following statements
is incorrect?
A The total profit would be the same, regardless of whether absorption costing or
marginal costing is used.
B A report using absorption costing would indicate whether each product appears to be
making enough profits.
C A report using marginal costing would indicate whether each product was making
enough contribution towards covering fixed overheads and making a profit.
D A report using marginal costing would show the total contribution, from which fixed
overheads would be deducted to arrive at the profit figure.
11. Total contribution is calculated by which formula?
A
B
C
D
Total revenue less total cost
Total revenue less variable cost
Total revenue less fixed cost
Total revenue less production cost
12. What are conversion costs?
A
B
C
D
Variable cost only
indirect cost only
Production cost excluding direct materials
Both direct and indirect labour costs
13. A company has calculated that its capacity ratio is 103.5% and that its efficiency ratio
is 90%. Therefore its capacity ratio will be:
A.
B.
C.
D.
86.96%
93.15%
115.00%
193.50%
MA1 Mock Exam Septermber 11
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14. A business has a seasonal sales pattern. Management reports are produced each
month showing. Which of the following comparisons would be suitable for control
purposes?
1 Comparison with sales in the corresponding month last year
2 Budgeted sales for the month
3 Comparison with previous month's sales in the current year
A
B
C
D
1 and 2 only
2 only
2 and 3 only
1, 2 and 3
15 A product uses 6 kilograms of raw material and takes two direct labour hours to
make. Raw materials cost £2.50 per kilogram and direct labour is paid £4 per hour.
Variable production overheads are 25% of labour costs. The budgeted fixed
production costs for the year were £120,000 and budgeted direct labour hours were
20,000 hours. Fixed overheads are recovered on a direct labour hour basis.
The full production cost per unit of product is:
A
B
C
D
£25
£31
£35
£37
16 Which of the following businesses would operate a batch costing system?
A
B
C
D
Brewery
Food canning
Coal mine
Bakery
17 Which of the following is a direct expense?
A
B
C
D
Materials used on production
The hire of special tools for Job 721
Power
Depreciation
MA1 Mock Exam Septermber 11
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18 A company currently uses absorption costing. The following information relates to
Product X for Month 1:
Opening stock
Production
Sales
Nil
900 units
100 units
If the company had used marginal costing, which of the following combinations
would be true?
A
B
C
D
Profit
would be higher
would be higher
would be lower
would be lower
Stock
would be higher
would be lower
would be higher
would be lower
19 Variable costs are conventionally deemed to
A
B
C
D
vary per unit of output as production volume changes
be constant in total as production volume changes
vary, in total, from period to period when production is constant
be constant per unit of output
20 Which of the following statements concerning the difference between management
accounts and financial accounts is incorrect?
A Management accounts are only concerned with costs, not profits
B There is a legal requirement for financial accounts
C Management accounts are more forward looking than financial accounts
D Financial accounts are for external purposes whereas management accounts are for
internal purposes
21 Which of the following is NOT correct?
A.
B.
C.
D.
Limited companies, by law, are required to prepare financial accounts
The format of financial accounts and cost accounts are usually differ
Financial accounts and cost accounts will contain, at least, some common data
The value of stocks in the financial accounts can differ from the value in cost
accounts
MA1 Mock Exam Septermber 11
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22. If actual output is lower than budgeted output, which of the following costs would
you expect to be lower than the original budget?
A.
B.
C.
D.
Total variable costs
Total fixed costs
Variable costs per unit
Fixed costs per unit
23. A company has to pay loyalties of £1.50 per unit of production. The agreement
stated that loyalties are payable monthly based on the month’s production.
How would the loyalties be classified in the cost accounts?
A.
B.
C.
D.
As a variable cost
As a semi-variable cost
As a fixed cost
As a stepped cost
24 XX Ltd absorbs overheads based on units produced. In one period, 23,000 units were
produced, actual overheads were £276,000 and there was £46,000 under absorption
of overheads.
The budgeted overhead absorption rate per unit was:
A
B
C
D
£10
£12
£13
£14
25 Job costing will normally be used where:
A
B
C
D
a given number of similar products are produced
production is continuous
production of the product takes an extensive period of time
production relates to a single special order
26 Which ONE of the following would be classified as direct labour?
A
B
C
D
Personnel manager in a company servicing cars.
Bricklayer in a construction company.
General manager in a DIY shop.
Maintenance manager in a company producing cameras.
MA1 Mock Exam Septermber 11
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27 A service department charges a mark-up on services performed for other departments.
Goods or services will be charged at a transfer price. Which is the following best to
describe this service department?
A
B
C
D
A cost centre
A profit centre
An investment centre
An expenditure centre
28 A company operates a piecework scheme to pay its staff. The staff receives £0.20 for
each unit produced. However the company guarantees that every member of staff
will receive at least £15 per day.
Show below is the number of units produced by operator A during a recent week:
Day
Unit produced
Monday Tuesday Wednesday
90
70
75
Thursday Friday
60
90
What are operator A’s earnings for the week?
A
B
C
D
£75.00
£77.00
£81.00
£152.00
29 Which is not a recognised method of overhead absorption?
A
B
C
D
Recovery rate per direct labour hour
Recovery rate per machine hour
As a percentage of sales value
As a percentage of prime cost
30 Production supervisory salaries are classed as production overhead. Which is the
most appropriate basis of apportioning this cost to cost centres?
A
B
C
D
Number of employees (both full-time and part-time)
Machine hours
Direct labour hours
Number of machines
MA1 Mock Exam Septermber 11
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31 Which of the following items might be a cost center within a management accounting
systems of a university of further education.
i
ii
iii
iv
Business study department
A student
An university building
The university itself
A.
B.
C.
D.
All four
i and ii
i, ii and iv
i and iii
32 In which one of the following situations is real-time transaction processing absolutely
essential for efficient operation?
A
B
C
D
Payroll transaction entries in a retail shop
Suppliers invoices in a manufacturing company
Cheque transactions in a bank
Ticket reservations in a theatre
33 Which of the following techniques would be useful for controlling costs?
i. variance analysis
ii comparing actual results with a flexed budget
iii analysis of the trend in cost
A
B
C
D
i and ii
i and iii
ii and iii
i, ii and iii
34 Which of the following are acceptable bases for absorbing production overheads?
1.
2.
3.
4.
A
B
C
D
direct labour hours
machine hours
as a percentage of prime cost
per unit
1 and 2 only
3 and 4 only
1, 2, 3 or 4
1, 2 or 3 only
MA1 Mock Exam Septermber 11
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35 RT Ltd uses marginal costing for internal reporting purposes and absorption costing
for its published accounts. The company produces a single product which has a unit
selling price of £20, a unit variable cost of £8 and a unit fixed production cost of
£7.20. Period 2 data:
Opening stock
Production
Sales
nil
1,200 units
1,000 units
The marginal costing profit and loss account showed a loss of £200 for Period 2. The
absorption costing profit and loss account will show:
A
B
C
D
Loss of £1,646
Loss of £200
Profit of £400
Profit of £1,240
36 Which of the following statements is correct about costs in a manufacturing business?
A
B
C
D
The fixed cost per unit is the same at all levels of output.
The fixed cost per unit falls as output increases, at a constant rate
The fixed cost per unit falls as output increases, at a declining rate
The fixed cost per unit falls as output increases, at an increasing rate
37 The data of a sales activity recorded as follow.
Budgeted sales
200 units
Actual sales
180 units
Budgeted selling price
£100
Actual selling price
£110
Budgeted variable cost
£50/unit
Budgeted fixed cost
£15/unit
What is the sales volume variance assuming a marginal costing system?
A
B
C
D
£1,000 Adverse
£1,000 Favourable
£1,200 Adverse
£1,200 Favourable
MA1 Mock Exam Septermber 11
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38 Which of the following costs would likely to be apportioned over a number of cost
centers when absorption costing is adopted?
A
B
C
D
Factory rent and direct materials
Heat and light and direct materials
Factory rent and direct labour
Factory rent and heat and light
39 Western Limited makes three products, which are shown below.
Contribution per unit
Material X (per kg)
Labour hour rate per unit
Red
£30
2kg
£6
Blue
£40
5kg
£3
Green
£18
4kg
£3
Which of the following priority of production in order to maximize the profit?
A
B
C
D
Red, Blue, Green
Red, Green, Blue
Green, Blue, Red
Blue, Green, Red
40 A flexible budget is:
A
B
C
D
a budget showing variable production costs only
a budget showing actual costs and revenues in the budget period
a budget which shows the costs and revenues at different levels of activity
a budget that is changed monthly
41 What would be the following form part of purchasing system?
1 purchase invoice
2 purchase requisition
3 good receive notes
A
B
C
D
1 and 2
2 and 3
2 only
1, 2 and 3
MA1 Mock Exam Septermber 11
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42.
A
B
C
D
The following graph represents which type of cost?
Fixed cost
Variable cost
Semi-variable cost
Stepped cost
43 Which of the following statements relating to coding is incorrect?
A
B
C
D
Coding enables companies to record and retrieve information quickly and easily
Coding ensures that no errors are ever made
Coding enables companies to file large amounts of information in a small space
Information which has been coded can be sorted in a variety of different ways
44 A product has a budgeted direct materials cost of £12 per unit. Production volume
for the period was:
Actual
Budget
6,750 units
6,500 units
Actual direct materials cost for the period were £79,840.
What was the direct material cost variance?
A
B
C
D
£1,160 Favourable
£1,160 Adverse
£1,840 Favourable
£1,840 Adverse
MA1 Mock Exam Septermber 11
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45 Which of the following factors should be the least likely to affect a decision about
whether or not to investigate a variance reported during a particular month in the
middle of the financial year?
A
B
C
D
Size of the variance
Whether it is favourable or adverse
Whether it is likely to be controllable
The trend in the monthly variance over the year to date
46 What is the principle of reporting by exception with variance analysis?
A
B
C
D
Report variances only occasionally
Report only those variances that exceed a certain limit
Report only to the most senior management
Report only adverse variances
47 Job costing will normally be used where:
A
B
C
D
a given number of similar products are produced
production is continuous
production of the product takes an extensive period of time
production relates to a single special order
48 The following information relates to Product 123.
£
£
Sales price
12
Prime cost
4
Fixed overhead
5
Total cost
9
Profit
3
Fixed costs each month are £63,000.
What is the breakeven volume of sales each month?
A
B
C
D
7,875 units
9,000 units
12,600 units
21,000 units
MA1 Mock Exam Septermber 11
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50 Which of the following is NOT included in the prime cost?
A
B
C
D
Overtime work at a customer’s request
Special packaging for a particular product
Supervised training for a new employee
Loyalties
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