QUESTION NO: 1
Revue plc uses a standard costing system. The budget for one of its products for September includeslaborcost (based on 4 hours per unit) of $117,600. During September, 3,350 units were made which was 150 units less than budgeted. Thelaborcost incurred was $111,850 and the number oflaborhours worked was 13,450.
Thelaborefficiency variance for the month was:
Revue plc uses a standard costing system. The budget for one of its products for September includeslaborcost (based on 4 hours per unit) of $117,600. During September, 3,350 units were made which was 150 units less than budgeted. Thelaborcost incurred was $111,850 and the number oflaborhours worked was 13,450.
Thelaborefficiency variance for the month was:
Correct Answer: C
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QUESTION NO: 2
Dalf Co calculates the margin of safety for each of its products separately. Data for one product are shown below:
Selling price per unit$85 Variable cost per unit$53 Budgeted sales volume80,000 units Margin of safety22%
What is the value of fixed costs attributed to the product?
Dalf Co calculates the margin of safety for each of its products separately. Data for one product are shown below:
Selling price per unit$85 Variable cost per unit$53 Budgeted sales volume80,000 units Margin of safety22%
What is the value of fixed costs attributed to the product?
Correct Answer: D
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QUESTION NO: 3
On 1 January 2009, Peming Co entered into a finance lease agreement to obtain a machine which would have cost of $166,000 if it had been purchased outright. The machine has a useful life of six years, and the lease period is five years. At the end of the lease period, the machine will be returned to thelesser. As well as requiring a final payment, the terms of the lease are:
Initial rental$8,000
Monthly rentals, payable in arrears60 x $3,200
Interest rate implicit in lease8% per annum Peming has a 31 December year end, and provides for depreciation on machinery on the straight-line basis.
How much should be charged in the statement of comprehensive income for the year to 31 December 2009 as a result of the lease agreement?
On 1 January 2009, Peming Co entered into a finance lease agreement to obtain a machine which would have cost of $166,000 if it had been purchased outright. The machine has a useful life of six years, and the lease period is five years. At the end of the lease period, the machine will be returned to thelesser. As well as requiring a final payment, the terms of the lease are:
Initial rental$8,000
Monthly rentals, payable in arrears60 x $3,200
Interest rate implicit in lease8% per annum Peming has a 31 December year end, and provides for depreciation on machinery on the straight-line basis.
How much should be charged in the statement of comprehensive income for the year to 31 December 2009 as a result of the lease agreement?
Correct Answer: D
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QUESTION NO: 4
Which of the following comments about sales price is correct?
Which of the following comments about sales price is correct?
Correct Answer: B
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QUESTION NO: 5
Which of the following statements about target costing is/are correct?
i) The features included in the product are often identified after the target cost has been established.
ii) Target costing will often continue to be used after the product has been launched.
Which of the following statements about target costing is/are correct?
i) The features included in the product are often identified after the target cost has been established.
ii) Target costing will often continue to be used after the product has been launched.
Correct Answer: C
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QUESTION NO: 6
At 1 November 2009 Boho Co's statement of financial position reported a deferred tax liability of $36,560. At 31 October 2010 the net book value of non-current assets was $135,400 greater than the tax written down value.
The current rate of tax is 22%. It has recently been announced that this will be reduced to 20% during the next financial year.
What should be reported in the statement of comprehensive income for the year to 31 October 2010 in respect of deferred tax?
At 1 November 2009 Boho Co's statement of financial position reported a deferred tax liability of $36,560. At 31 October 2010 the net book value of non-current assets was $135,400 greater than the tax written down value.
The current rate of tax is 22%. It has recently been announced that this will be reduced to 20% during the next financial year.
What should be reported in the statement of comprehensive income for the year to 31 October 2010 in respect of deferred tax?
Correct Answer: B
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QUESTION NO: 7
The budgeted overheads of Nambro for the next year have beenanalyzedas follows:
$000 Purchase order processing costs450 Production run set up costs180 Machine running costs640
In the next year, it is anticipated that machines will run for 32,000 hours, 6,000 purchase orders will be processed and there will be 450 production runs.
One of the company's products is produced in batches of 500. Each batch requires a separate production run, 30 purchase orders and 750 machine hours.
Using Activity Based Costing, what is the overhead cost per unit of the product?
The budgeted overheads of Nambro for the next year have beenanalyzedas follows:
$000 Purchase order processing costs450 Production run set up costs180 Machine running costs640
In the next year, it is anticipated that machines will run for 32,000 hours, 6,000 purchase orders will be processed and there will be 450 production runs.
One of the company's products is produced in batches of 500. Each batch requires a separate production run, 30 purchase orders and 750 machine hours.
Using Activity Based Costing, what is the overhead cost per unit of the product?
Correct Answer: D
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QUESTION NO: 8
In the last production period, Runnos Co budgeted to produce 18,000 units with a standard material cost of $72,000.
Each unit has a standard material input of 2 kg. Actual production volume was 18,600 units, and 39,060 kg of material was used at a cost of $76,167.
What is the material price variance?
In the last production period, Runnos Co budgeted to produce 18,000 units with a standard material cost of $72,000.
Each unit has a standard material input of 2 kg. Actual production volume was 18,600 units, and 39,060 kg of material was used at a cost of $76,167.
What is the material price variance?
Correct Answer: A
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