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Refer to the Exhibit.
CM has produced the following budget information for next year:
The opening receivables balance represents 2 months sales. It is expected that the same level of sales will continue at an even rate throughout the year.
In an effort to improve receivables collection periods it is proposed to offer a discount of 5% for payment by cash. It is expected that 20% of customers will pay by cash. Of the remaining 80% credit sales, 40% will be settled within 1 month and 60% are expected to settle within 2 months.
What are the budgeted cash receipts from cash and credit sales in the year?
It is company policy that the closing inventory of finished goods must be equal to 10% of the following month's budgeted sales. The budget sales for November and December are 8,000 and 9,000 units respectively.
The budgeted production for November will be:
Refer to the Exhibit.
The following details have been extracted from the receivables collection records of SBC:
The amount budgeted to be received in September from credit sales is, to the nearest £000:
The standard labour cost for 1 component is $15.00 (5 hours at $3 per hour). Last month, 6,000 hours were worked at a cost of $17,000 to produce 1,100 components. The labour efficiency variance was:
Which of the following statements is correct?
i. sector bodies use budgetary planning and control systems
ii. costing cannot be used by public sector bodies because they have no measurable output
iii. in public sector bodies tend to focus on cost management therefore they have no need for non-financial information
Refer to the Exhibit.
Fabex Ltd manufactures a household detergent called "Clear". The standard data for one of the chemicals used in production (chemical XTC) is as follows:
(a) 50 litres used per 100 litres of 'Clear' produced
(b) Budgeted monthly production is 1000 litres of 'Clear'.
The closing inventory of chemical XTC for November valued at standard price was as follows:
Actual results for the period during December were as follows:
(a) 500 litres of chemical XTC was purchased for £1300.
(b) 550 litres of chemical XTC was used.
(c) 900 litres of 'Clear' was produced.
It is company policy to extract the material price variance at the time of purchase.
What is the total direct material price variance (to the nearest whole number)?
A budget that is continuously updated by adding a further accounting period when the earliest period has expired is known as:
The net present value (NPV) of an investment is as follows.
NPV at 14% = $6,320
NPV at 18% = ($4,600) negative
The internal rate of return (IRR) of the investment is closest to
FL uses an absorption costing system. The overhead absorption rate for production overheads is $8.60 per direct labour hour.
Budgeted production overhead costs for the year were $473,000 and actual costs incurred were $468,000. 56,000 labour hours were used.
Which ONE of the following statements is correct?
CVP Limited manufactures a single product with a selling price of $25.60. Fixed costs are $122,880 per month and the product has a profit/volume ratio of 40%.
In a month when actual sales were $358,400, CVP's margin of safety in units was
In order to provide information that is suitable for control purposes, the budget must be:
Refer to the exhibit.
The budgeted contribution for last month was $53,600. The variances reported were as follows:
The actual contribution for last month was:
A company operates a full cost system of pricing. Production overheads are absorbed using a pre-determined absorption rate of £3.50 per machine hour. The direct production cost of product A is £15 per unit and it utilises 6 machine hours per unit. The mark-up for non-production costs is 10% of total production cost. The company wants to make a 25% return on sales revenue for all products.
The required selling price for Product A, to two decimal places, is:
Refer to the exhibit.
The following data relates to Department A within a business unit.
The overhead absorption rate per direct labour hour for Department A is:
Give your answer to 2 decimal places.
Refer to the exhibit.
X Enterprises runs a private nursing home for the elderly. The company are concerned that bed occupancy rates have been falling over the past 2 years with a consequential effect on profit. They have drawn up a budget for next year as follows:
The nursing home currently charges $90 per patient day.
The nursing home operates at 7,500 patient days per year. In an effort to increase occupancy rates the company are proposing to reduce the current price by 10% and increase spending on advertising by $10,000 each year. What effect will this have on the margin of safety?
In an integrated cost and financial accounting system, the accounting entries for the cost of production units completed in the period would be:
C Ltd produces a chemical in a single process. Information for this process last month is as follows:
(a) Opening work in progress - 10000 kg valued at £10000 for direct material and £7500 for conversion costs.
(b) Materials input - 25000 kg at £1.10 per kg.
(c) Conversion costs - £17000
(d) Output during the month - 23000 kg.
(e) There were 7500 units of closing work in progress which was complete as to materials and 30% complete as to conversion.
(f) Normal loss for the month was 10% of input and all losses have a scrap value of 80p per kg.
What was the value of normal loss during the month?
Refer to the exhibit.
A company issued its production budget based on an anticipated output of 2000 units. The actual output for the period was 1500 units. The details of the costs are shown below:
What was the budget expenditure variance?
The Chartered Institute of Management Accounting's definition of management accounting outlines four responsibilities of the accountant in terms of the value for the stakeholders. The management accountant should
aim to have which of the following effects according to CIMA?
Refer to the exhibit.
A manufacturing company makes a product called 'Delta'. Each unit of product 'Delta' uses 4 kgs of raw material. Data for next month's budget for product Delta is as follows:
How many units of product 'Delta' should be produced in the month?
Feedforward control systems differ from feedback systems in that they _____________________.
When sales and output have passed the break-even point, the contribution per unit, for each unit then sold, becomes:
LC produces a household detergent in a single process. Information for this process for last month is as follows:
(a) Materials input - 11,000 Litres at £2.00 per litre.
(b) Conversion costs - £23,000
(c) Output during the month - 8,000 litres.
(d) There were 2,000 units of closing work in progress which was complete as to materials and 35% complete as to conversion.
(e) Normal loss for the month was 5% of input and all losses have a scrap value of 50p per litre.
(f) There was no opening work in progress.
The value of closing work in progress at the end of the month is closest to:
Xter Ltd produces product 'PZ'. The forecast sales for the forthcoming year are 50,000 units.
It is anticipated that there will be 10,000 units of opening inventory at the beginning of the year. However, management wishes to reduce this inventory by 30% by the end of next year.
The production budget for the forthcoming year will be
Refer to the exhibit.
ZAP publishes a monthly magazine aimed at the teenage market. It has drawn up a budget for next year as follows:
What selling price would be required for ZAP to break even?
Refer to the exhibit.
The budgetary control report for the latest period shows the following. Variances in brackets are adverse.
The sales volume contribution variance for the period was
Which of the following entries to record the direct and indirect labour costs in the month are correct?
The correct entry is
A company manufactures laptop computers. Which of the following would be classified as direct labor?
Refer to the exhibit.
A company manufactures and sells a single product which has the following cost and selling price structure:
The fixed overhead absorption rate was based on normal capacity of 1800 units per month.
The budgeted break-even point in sales units per month is units.
Which of the following are NOT behavioural aspects of budgetary controls? (Select ALL that apply.)
LC produces a household detergent in a single process. Information for this process for last month is as follows:
(a) Materials input - 11,000 Litres at £2.00 per litre.
(b) Conversion costs - £23,000
(c) Output during the month - 8,000 litres.
(d) There were 2,000 units of closing work in progress which was complete as to materials and 35% complete as to conversion.
(e) Normal loss for the month was 5% of input and all losses have a scrap value of 50p per litre.
(f) There was no opening work in progress.
What was the value of the abnormal loss/gain during the month (to the nearest £)?
A company achieves a profit/volume ratio of 25%. Sales for the month of July were £127,280 and fixed costs were £24,872.
What was the profit for the month?
An organisation’s management report contains the following data:
Which division has the highest operating margin percentage?
A company operates an integrated standard cost accounting system. The standard price of raw material A is $20 per litre. At the start of period 1, the inventory of 500 litres of raw material A was valued at $20 per litre. During period 1, 100 litres of raw material A were purchased at an actual price of $21 per litre. During period 2, 550 litres of raw material A were issued to Job 789.
In respect of the above events, which TWO of the following statements are correct? (Choose two.)
A new product requires an investment of $200,000 in machinery and working capital. The total sales volume over the product’s life will be 5,000 units. The forecast costs per unit throughout the product’s life are as follows:
The product is required to earn a return on investment of 35%.
What unit selling price needs to be achieved?
Data for the latest period for a company which makes and sells a single product are as follows:
There were no budgeted or actual changes in inventories during the period.
The variable overhead expenditure variance for the period was:
Assume that a unit of output is the cost object. Which of the following statements is valid?
In order for the information in a management accounting report to be authoritative its contents must be:
Based upon extensive historical evidence, a company’s daily sales volume is known to be normally distributed with a mean of 1,728 units and a standard deviation of 273 units.
What is the probability that, on any one day, the sales volume will be at least 1,300 units?
A company uses full cost pricing. The unit costs for product Z are given below.
What price per unit should be charged in order to achieve a profit margin of 20%?
Give your answer to the nearest cent.
The International Federation of Accountants (IFAC) stated that it was important that “accountants in business” should understand what the drivers of stakeholder value are. Which of the following statements is valid?
A company uses standard absorption costing. Budgeted and actual data for the latest period are as follows.
What was the production overhead absorption rate per unit?
A company uses an integrated accounting system. The following data relate to the latest period.
At the end of the period, the entry in the production overhead control account in respect of under or over absorbed overheads will be:
A company wishes to compare the variability of its monthly sales revenue in country A with that of country B. The two countries use different currencies.
The monthly sales revenue for the last 48 months in country A (which is measured in $) has been analysed as follows.
What is the coefficient of variation of this data?
Give your answer as a percentage to one decimal place.
Which of the following would NOT require taking into account the time value of money?
TESTED 04 May 2024
