TIME 1 HOUR AND 15 MINS

Friday, July 15, 2022 6:42 PM

MA2 TEST- 2
Q1 COMPANY X IS PRODUCING PRODUCT Y. THE INPUT OF THE PRODUCT IS 2000 UNITS. TOTAL UNITS PRODUCED IS 1500 WHICH IS 75% OF INPUT. THE ABNORMAL LOSS IS 10%

OF INPUT. WHAT IS THE PERCENTAGE FOR NORMAL LOSS %.

Q2 THE FOLLOWING RELATES TO A MANUFACTURING COMPANY:

PRODUCTION 14,000 UNITS FIXED PRODUCTION COSTS $63,000

SALES 12,000 UNITS FIXED SELLING COSTS $ 12,000
THE PROFIT CALCULATED USING ABSORBTION COSTING IS $36,000
WHAT WOULD BE THE PROFIT USING MARGINAL COSTING $

Q3 INFORMATION RELATES TO TWO PROCESS F AND G .

PROCESS NORMAL LOSS AS % OF INPUT INPUT OUTPUT

F 8 65,000 58,900
G 5 37,500 35,700
FOR EACH PROCESS WAS IT ABNORMAL LOSS OR ABNORMAL GAIN?

ABNORMAL GAIN ABNORMAL LOSS

F

Q4 ONE PARTICULAR PERIOD AN EMPLOYEES OF COMPANY XYZ PRODUCED 12,000 UNITS. THE TOTAL STANDARD MACHINE HOURS WERE 3,000 MAHINE HOURS AND THE
BUDGETED PRODUCTION DURING THE PERIOD WAS 15,000 UNITS AND THE ACTUAL HOURS WORKED WHERE 6,000 HOURS. WHAT IS THE LABOUR EFFICIENCY RATIO?

A) 40%
B) 80%
C) 50%
D) 200%

Q5 CONSIDER THE FOLLOWING STATEMENTS :

1) JOB COSTING IS ONLY APPLICABLE TO SERVICE ORGANISATION.
2) BATCH COSTING CAN BE USED WHEN A NUMBER OF IDENTICAL PRODUCTS ARE MANUFACTURED TOGETHER TO GO INTO FINISHED INVENTORY.

WHICH STAMENT IS TRUE?

A) STATEMENT 1 IS TRUE AND 2 IS FALSE
B) STATEMENT 1 AND 2 IS TRUE
C) STATEMENT 2 IS TRUE AND 1 IS FALSE
D) STAMENT 1 AND 2 IS FALSE

Q6 WHICH TWO OF THE FOLLOWING WILL LEAD TO ABNORMAL LOSS RISING?

TOTAL LOSSES ARE LESS THAN EXPECTED
TOTAL LOSSES ARE GREATER THAN EXPECTED
TOTAL OUTPUT IS LESS THAN EXPECTED
TOTAL OUTPUT IS GREATER THAN EXPECTED

Q7 WHICH OF THE FOLLOWING WILL BE IDENTIFIED AS A INDIRECT LABOUR?

A) ASSEMBLY WORKERS ON A CAR PRODUCTION LINE
B) BRICK LAYERS IN A HOUSE BUILDING COMPANY
C) FORKLIFT TRUCK DRIVERS IN THE STORES OF ENGINEERING COMPANY
D) TUTORS IN A PRIVATE EDUCATION BUSINESS

Q8 1000 UNITS 2000 UNITS

TOTAL SALES VALUE $5,000 $10,000
TOTAL VARIABLE COST $3,000 $4,000

TOTAL CONTRIBUTION $2,000 $6,000

TOTAL FIXED COST $1,000 $1,000

PROFIT $1000 $5,000

WHAT IS THE PROFIT FOR THE ACTIVITY LEVEL OF 3,000 UNITS?

A) $11,000
B) $12,000
C) $9,000
D) $7,000

Q9 AN EMPLOYEE IS PAID ON PIECE WORK BASIS.

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Q9 AN EMPLOYEE IS PAID ON PIECE WORK BASIS.
1 TO 100 UNITS- $0.20 PER UNIT
101 TO 200 UNITS- $0.30 PERUNIT
201 RO 200 UNITS- $0.40 PER UNIT
REJECTED UNITS ARE NOT QUALIFIED FOR PAYMENT.
DURING A PARTICULAR DAY THE EMPLOYEE PRODUCED 210 UNITS OF WHICH 17 UNITS WERE REJECTED AS FAULTY. WHAT DID THE EMPLOYEE EARN FOR THE DAY WORK?

A) $47.90
B) $54.00
C) $57.90
D) $63.00

Q10 For whom are management accounts prepared?

A) Employees
B) Internal managers
C) Shareholders
D) Providers of finance

Q11 Which of the following, relating to the management of raw materials, would result from the introduction
of buffer (safety) inventory?

(i) Holding costs per unit of inventory would increase.

(ii) The economic order quantity would decrease.
(iii) Average inventory levels would increase.
(iv) Total ordering costs would decrease.

A) (iii) only
B) (ii) and (iii) only
C )(ii), (iii) and (iv) only
D )(i), (ii), (iii) and (iv)

Q12
A component has a buffer inventory of 280, a reorder quantity of 1,200 and a rate of demand which
varies between 100 and 400 per day.
What is the average inventory of the component?

A) 800
B) 880
C) 920
D) 1,480

Q13 In the context of calculating inventory control levels, what is meant by the term 'lead time'?

A) The time between raising a purchase requisition and a corresponding purchase order being
completed by the purchasing department
B )The time between materials inventory reaching the minimum level and a stock-out occurring
C) The time between placing an order for materials and the relevant materials being received into
inventory
D) The time between the current date and the date at which a stock-out will occur at current levels of
Usage

Q14 A small engineering company that makes generators specifically to customers' own designs has had to
purchase some special tools for a particular job. The tools will have no further use after the work has
been completed and will be scrapped.
How should the cost of these tools be treated?

A) As variable production overheads

B) As fixed production overheads
C) As indirect expenses
D) As direct expenses

Q15 MAXIMUM USAGE 210 UNITS

MINIMUM USAGE 100 UNITS
REORDER LEVEL 10-50 DAYS
WHATS IS THE REORDER LEVEL? UNITS

Q16 A particular cost is fixed in total for a period.

What is the effect on cost per unit of a reduction in activity of 50% ?

A) Cost per unit increases by 50%

B) Cost per unit reduces by 50%
C) Cost per unit increases by 100%
D) Cost per unit is unchanged

Q17 Actual overheads $496,980

Actual machine hours 16,566

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Actual machine hours 16,566
Budgeted overheads $475,200
Based on the data above, and assuming that the budgeted overhead absorption rate was $32 per hour,
what were the number of machine hours (to the nearest hour) budgeted to be worked?

A) 14,850
B) 15,531
C) 16,566
D) 30,381

Q18 JOINT COSTS $40,000

PRODUCTION UNITS TOTAL COSTS $
X 10,000 $8,000
Y 20,000 $9,000
Z 50,000 $18,000
S 12,000 $21,000
BY PRODUCT-1,000 $4,000
WHAT IS THE JOINT COST APPORTIONED TO PRODUCT Y USING PHYSICAL METHOD?
A) $7,826
B) $7,825
C) $7,821
D) $7,820

Q19 SERVICE COST CENTRE A B

$42,000 $57,600

% TO PRODUCTION COST CENTRE X 40 55

% TO PRODUCTION COST CENTRE Y 60 45

What is the total re-apportionment to Production Cost Centre Y?

A) $42,720
B) $48,480
C) $51,120
D) $56,880

Q20 EOQ 400

ORDERING COST $20
MONTHLY DEMAND 200 UNITS
WHAT IS THE ANNUAL HOLDING COST PER UNIT?
A) 0.6
B) 0.6777
C) 0.5
D) 0.588

Q21 COMPANY X PRODUCED 1200 UNITS AND SOLD 1000 UNITS. THE PROFIT CALCULATED BY COMPANY X USING MARGINAL AND ABSOBTION COSTING WERE $12,000 AND
$15,000 RESPECTIVELY. THE TOTAL COST FOR THE PRODUCTION OF THE UNITS WERE $39,600. WHAT IS THE VARIABLE COST PERUNIT?

A) $15
B) $39.6
C) $18
D) $20

Q22 THE BASIC RATE FOR THE LABOUR WORKING PER HOUR IS $6.50. IN THE FIRST WEEK OF THE OPERATION ONE EMPLOYEE WORKED FOR THE TOTAL OF 44HOURS AND
PERFORMED 94 OPERATIONS. THE STANDARD TIME ALLOWED FOR A WORKER TO PERFORM THIS PARTICULAR OPERATION IS 37.5 MINTUES. THE BONUS IS CALCULATED WITH
THE FROMULA (TIME TAKEN/TIME ALLLOWED)*TIME SAVED*RATE PER HOUR. WHAT IS THE GROSS WAGE CALCULATED FOR THE EMPLOYEE?

A) $214.20
B) $357.80
C) $381.88
D) $977.60

Q23 AT JANUARY 1 A COMPANY EMPLOYEED 5,250 EMPLOYEES. DUE TO EXPANSION THE NUMBER OF EMPLOYEES INCREASED TO 5,680 BY 31 DECEMBER. DURING THE YEAR
360 STAFF LEFT AND WERE REPLACED. WHAT WAS THE LABOUR TURN OVER RATIO? (ROUND TO ONE DECIMAL PLACE).

Q24 A BUSINESS OPERATES A JOB COSTING SYSTEM AND PRICES ITS JOB BY ADDING 20% TO THE TOTAL COST OF THE JOB. DIRECT MATERIA IS $3,000, DIRECT LABOUR IS
$1000, DIRECECT EXPENSE IS $1,000 AND NON PRODUCTION COSTS ARE $1,840. THE FIXED OVER HEADS ARE ABSORBED ON THE BASIS OF DIRECT LABOUR HOURS(156 HOURS).
THE BUDGETED FIXED OVER HEAD WAS $300,000 AND TOTAL BUDGETED DIRECT LABOUR HOURS WAS 60,000. WHAT WAS THE TOTAL COST OF THE JOB?

A)$7,620
B)$8,382
C)$9,144
$9,525

Q25 THE FOLLOWING STATEMENTS RELATE TO RESPONSIBILITY CENTERES:

i. RETURN ON CAPITAL EMPLOYED IS A SUITABLE MEASURE OF PERFORMANCE IN BOTH PROFIT AND INVESTMENT CENTRES.
ii. COST CENTRES ARE FOUND IN MANUFACTURING ORGANISATIONS BUT NOT IN SERVICE ORGANISATIONS.

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 ii. COST CENTRES ARE FOUND IN MANUFACTURING ORGANISATIONS BUT NOT IN SERVICE ORGANISATIONS.
iii. THE MANAGER OF A REVENUE CENTRE IS REPONSIBLE FOR BOTH SALES AND COSTS IN A PART OF AN ORGANISTAION.
WHICH OF THE FOLLOWING STATEMENT IS INCORRECT?

A) 1 AND 2
B) 2 AND 3
C) 1 AND 3
D) ALL OF THEM

Q26 A LAW FIRM RECOVERS OVERHEADS ON CHARGEABLE CONSULTING HOURS. BUDGETED OVERHEADS WERE $615,000 AND ACTUAL CONSULTING HOURS WERE 32,150.
OVERHEADS WERE UNDER-RECOVERED BY $35,000. ACTUAL OVERHEADS WERE $694,075 WHAT IS THE OVER HEAD ABSORBTION RATE . $ (TO 2 DECIMAL PLACES)

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