Section A –ALL 35 questions are compulsory and MUST be attempted
Please use the space provided on the inside cover of the Candidate Answer Booklet to indicate your chosen answer toeach multiple choice question.Each question is worth 2 marks.
A manufacturing company benchmarks the performance of its accounts receivable department with that of a leadingcredit card company.
What type of benchmarking is the company using?A
2Which of the following BEST describes target costing?A
Setting a cost by subtracting a desired profit margin from a competitive market price
Setting a price by adding a desired profit margin to a production cost
Setting a cost for the use in the calculation of variances
Setting a selling price for the company to aim for in the long run
Information relating to two processes (F and G) was as follows:
ProcessNormal loss asInputOutput% of input(litres)(litres)
For each process, was there an abnormal loss or an abnormal gain?
Process FProcess G
Abnormal gainAbnormal gain
Abnormal gainAbnormal loss
Abnormal lossAbnormal gain
Abnormal lossAbnormal loss
The following budgeted information relates to a manufacturing company for next period:
Production14,000Fixed production costs63,000Sales12,000Fixed selling costs12,000The normal level of activity is 14,000 units per period.Using absorption costing the profit for next period has been calculated as $36,000.
What would be the profit for next period using marginal costing?A