Câu 1

Is the following statement true or false?

"Use of workers at a lower rate of pay than standard is a reason of an adverse labour rate
variance"
A. True
B. False
Câu 2
What is a budget cost allowance?
A. A budget of expenditure applicable to a particular function
B. A budget allowance which is set without permitting the ultimate budget manager the
opportunity to participate in setting the budget
C. A fixed budget allowance for expenditure which is expected every period, regardless
of the level of activity
D. The budgeted cost expected for the actual level of activity achieved during the period
Câu 3
Is the following statement true or false?
"The labour rate variance is the difference between the standard cost and the actual cost
for the expected hours paid at actual output units"
A. True
B. False
Câu 4
Which of the following is NOT a feature of effective feedback reports?
A. Completely accurate for the purpose intended
B. Controllable costs and revenues should be separately identified
C. Made available to managers in a timely fashion
D. Produced on a regular basis
Câu 5
Biel Ltd. is a manufacturing company which has several thousand types of inventory
item. The company wants to introduce a new inventory control system.
Which is the most suitable system for an organisation with so many inventory items.
A. ABC system
B. Periodic review system
C. Just-in-time system
D. Re-order level system
Câu 6
Which of the following is/are (a) reason(s) for holding inventory?
(1) to ensure continuity of production
(ii) to reduce ordering costs
(iii) for technical reasons
(iv) to take advantage of quantity discounts
A. (1) and (ii) only
B. (i) only
C. All of the above
D. (i), (ii) and (iv) only
Câu 7
Is the following statement true or false regarding the Economic order quantity system ?
"One of EOQ's limitations is that it ignores the potential benefit of taking advantage of
bulk discounts because it does not consider whether the best price is being obtained."
A. False
B. True
Câu 8
Is the following statement about one of advantages of shared service centre true or false?
"Shared service centre can reduce overhead costs"
A. False
B. True
Câu 9
Nimo Co. is going to prepare a budgeted income statement for the six months ending on
31 December 20X2.
Monthly sales are forecasted to be £4,000 for July, £5,500 for each of August and
September and £6,000 per month from October onwards
Selling price is fixed to generate a margin of 30%
Overhead expenses (excluding depreciation) are estimated at £1,000 per month.
The company plans to purchase non-current assets on 1 July costing £6,000, which will
be paid for at the end of September and are expected to have a five-year life (with no
residual value).
The budgeted net profit for the six month ending 31 December 20X2 is
A. £3,600
B. £3,300
C. £7,700
D. £2,700
Câu 10
Which of the following is a characteristic of rolling budgets?
A. The budget for each period is based on the current year's results, modified for changes
in activity levels.
B. Increments of expenditure are compared with the expected benefits to be received.
C. Updates to the fixed annual budget are made only when they are foreseeable
D. A new accounting period, such as a monta a quarter, is added as each old one
expires.
Câu 11
Is the following statement true or false?
The material usage variance is the difference between the standard quantity of materials
that should have been used for the number of units actually produced, and the actual
quantity of materials used, valued at the standard price per unit of material"
A. False
B. True
Câu 12
Which of the following is NOT a perspective that is monitored by the balanced scorecard
approach to performance measurement?
A. Financial
B. Supplier
C. Customer
D. Innovation and leaming
Câu 13
Which of the following items would be excluded in the calculation of controllable
divisional profit?
A. Sales to external customers
C. Head office costs
B. Controllable divisional fixed costs
D. Variable divisional expenses
Câu 14
Is the following statement about limiting factor analysis true or false?
When using limiting factor analysis in order to calculate maximum profit, it is assumed
that total foxed costs are not changed by increases or decreases in production volume."
A. False
B. True
Câu 15
is the following statement about one of the advantages of decentralization true or false?
Decentralization makes performance evaluation of managers and their area of
responsibility easier
A. False
B. True
Câu 16
Division A is a profit centre within PC Ltd. Over which of the following is the manager
of division A likely to hav control?
(1) Transfer prices
(2) Level of inventory in the division
(3) Discretionary fixed costs incurred in the division
(4) Apportioned head office costs
A. (1), (2) and (3) only
B. (1), (2), (3) and (4)
C. (1) and (2) only
D. (1) only
Câu 17
Rachel Ltd manufactures and sells a single product. The variable cost of production is
£8.0 per unit and the cument sales price is £15 per unit. Fixed costs are £2,600 per month,
and the annual profit for the company at the current sales volume is £60,000. The volume
of sales demand is constant throughout the year. The sales manager wishes to raise the
sales price to £18 per unit, but considers that a price rise will result in some loss of sales.
What should monthly sales volume be to maintain current profit with the sales price of
£18 per unit?
A. 2,543 units
B. 423 units
C. 760 units
D. 6,260 units
Câu 18
A company makes three products to which the following budget information relates
Product A Product B Product C
$ per unit $ per unit $ per unit
Selling price 50 35 60
Material @ $5/kg 10 7.5 12.5
Labour @ $8/hour 12 8 16
Variable production 1.5 1 2
 OH
Fixed OH 6 4 8
Maximum annual demand is for 2.000 units of Product A, 1,500 units of product 8 and
1,200 units of product C, and the factory has budgeted to produce that number of units. It
has just been discovered that next year materials will be limited to 9,000 kg and labour to
7,000 hours.
What is the maximum contribution that can be achieved next period?
A. $86,400
B. $113,200
C. $113,060.50
D. $112,837.50
Câu 19
Is the following statement true or false
"Variances should be reported and investigated whenever there is a difference between
actual and standard"
A. False
B. True
Câu 20
Is the following statement about the meaning of margin of safety true or false?
"If margin of safety for product Z is 2,000 units then actual sales can fall short of budget
by 2,000 units before the breakeven point is reached and no profit is made"
A. True
B. False
Câu 21
Is the following statement true or false?
"When using the EOQ formula to find the optimal quantity to be ordered, the purchase
price per unit is included in the calculation”
A. True
B. False
Câu 22
Taylor Co. makes a single product, which it sells for £25 per unit. Fixed costs are £87,500
per month and the product has a contribution ratio of 25%
In a month when actual sales were £425,000, Taylor's margin of safety, in units, was:
A. 14,000 units
B. 3,000 units
C. 17,000 units
D. 3.500 units
Câu 23
Is the following statement true or false?
Material total variance measures the difference between the standard material cost of the
expected (initial) output units and the actual material cost incurred"
A. False
B. True
Câu 24
Which of the following statements is correct?
A. The coefficient of determination must always fall between -1 and +1.
B. A disadvantage of the high-low method of cost estimation is that it does not take into
account the full range of available data
C. The correlation coefficient must always fall between 0 and +1.
D. A cost estimate produced using the high-low method can be used to reliably
predict the cost for any level of activity
Câu 25
Is the following statement about budget bias true or false?
"Underestimation of budgeted revenues to avoid being judged on poor results is an
example of budget bias or manipulation of accounting reports"
A. True
B. False
Câu 26
Is the following statement about limiting factor analysis true or false?
If a specific resource is a limiting factor, contribution will be maximised by earning the
lowest possible contribution per unit of limiting factor
A. True
B. False
Câu 27
Is the following statement true or false?
The fixed overhead expenditure variance is the difference between the budgeted and
actual fixed overhead expenditure in the period
A. False
B. True
Câu 28
Is the following statement true or false?
"If actual results are worse than expected results, we have an adverse variance (A)"
A. True
B. False
Câu 29
The following details have been extracted from the receivables collection records of
Mido Co.
Invoices paid in the month after sale: 60%
Invoices paid in the second month after sale: 25%
Invoices paid in the third month after sale: 12%
Bad debts: 3%
Invoices are issued on the last day of each month
Customers paying in the month after sale are entitled to deduct a 2% settlement discount.
Credit sales values for August to November are budgeted as follows.
August September October November
£35,000 £40,000 £60,000 £45,000
What is the amount budgeted to be received from credit sales in November?
A. £50,200
B. £49,480
C. £50,530
D. £46,260
Câu 30
Is the following statement true or false?
"Unforeseen discounts received is one of the reasons for a favourable material price
variance
A. True
B. False