School of Business & Management Abbottabad

MA1 Mock 2 Total Marks: 100 Passing Marks: 60 Time Allowed: 2 Hours

1) Which of the following would be classified as external information for business?

Sales analysis reports prepared by area sales managers
A safety conformance report prepared by the business safety officer
A report on consumer attitudes prepared by a market research company
Employee details on the payroll database

2) What is the correct cost accounting entry in an interlocking system for the
payment of wages?
Dr Bank account Cr Wages control account

Dr Wages control account Cr Cost ledger control

account

Dr Wages control account Cr Bank account

Dr Cost ledger control Cr Wages control account

account

3) In which department is a purchase order usually prepared?

Goods received department of the buying organisation
Dispatch department of the supplying organisation
Inventory stores department of the buying organisation
Purchasing department of the buying organisation

4) Which of the following may be used as classifications for raw materials used in
product manufacture?
(1) Direct cost
(2) Functional cost
(3) Variable cost
1 and 3 only
2 and 3 only
 1 and 2 only
1, 2 and 3

5) The responsibilities of the manager of a business division include decisions

relating to long-term assets.
What type of responsibility centre is described above?
Cost centre
Investment centre
Profit centre
Revenue centre

6) Each unit of product P requires 1.6 kg of material M. A purchase order is to be

placed for material M sufficient to provide for the manufacture of product P for the
next two months and for 520 kg or material M to remain in inventory at the end of
month 2.

460 kg of material M is in inventory at the beginning of month 1 and manufacture

of product P will be as follows:

Month 1 400 units

Month 2 560 units

What is the size of the purchase order that must be placed for material M?
1,476 kg
1,480 kg
1,536 kg
1,596 kg
7) A piecework scheme of labour remuneration applies to all direct workers in a
factory. The scheme for each individual is as follows:

$
Up to 250 units produced in a week 14 per unit
Between 251 and 300 units produced in a 17 per unit
week
Over 300 units produced in a week 20 per unit

Only the additional units produced qualify for the higher rates. Units that fail
inspection do not qualify for any payment.

Direct worker X produced 320 units in week 4 but 30 units failed inspection.
What wages were paid to direct worker X in week 4?
$4,180
$4,750
$6,400
$4,930

8) A factory cost centre absorbs overhead on the basis of machine hours. In a period
the budgeted overhead costs and budgeted activity in the cost centre were $144,000
and 4,100 machine hours respectively. Actual overhead costs and actual activity in
the period were both below budget at $142,600 and 3,950 machine hours
respectively.
What was the predetermined overhead absorption rate per machine hour (to the
nearest $0.01)?
$35.12
$34.78
$36.10
$36.46
QUESTION-9

10) When using Excel spreadsheets which of the following can be protected?
(1) Individual cells
(2) A range of cells within a worksheet
(3) An entire worksheet
1 and 2 only
1, 2 and 3
2 and 3 only
1 and 3 only

11) Are the following statements, about weighted average methods of raw materials
pricing, true or false?
(1) The periodic weighted average method requires the recalculation of the issue
price after each issue is made
(2) Fluctuations in issue price are reduced if the cumulative, rather than the
periodic, weighted average method is used

Both statements are true

Statement 1 is false and statement 2 is true
Statement 1 is true and statement 2 is false
Both statements are false

12) ABC Co made the following purchases of material X:

Units Price ($)

1 January 20X1 500 1.50
1 February 20X1 1,000 2.00
1 March 20X1 750 2.50
1 April 20X1 500 1.50
1 May 20X1 1,500 2.00
1 June 20X1 750 3.00

On 1 July 20X1 the company used 2,000 units of material X.

Using the first-in first-out (FIFO) method of inventory valuation what is the value
of the 2,000 units of inventory used on 1 July 20X1?
$3,000
$4,000
$4,750
$6,000

13) Zed Co uses process costing for product Alpha.

Production began on 1 September and there was no work-in-progress brought

forward. During the production period 600 kg of raw material were input to the
process and 200 kg of the finished product were output from the process.

At the end of the period work-in-progress was 80% complete with respect to
materials and 60% complete with respect to conversion costs.

During the production process no losses occurred.

What are the equivalent units for materials at the end of the production period?
600 kg
560 kg
440 kg
520 kg

Question-14

15) Liz wishes to create an Excel formula which multiplies the contents of cell A1
with the total contents of cells B1, B2, B3, B4 and B5.
Which of the following shows a formula Liz could use?
=A1*B1+B2+B3+B4+B5
 A1*SUM(B1:B5
=A1*AVERAGE(B1:B5)
=A1*SUM(B1:B5)
Question 16)

17) The following relate to computer data processing:

(1) It involves transactions being grouped and stored prior to processing

(2) It involves transactions being input and processed as they occur
(3) It is quicker than manual data processing
(4) A system will not always be up-to-date

Which of the above is/are true of real time computer data processing?
 2 and 3
1 and 4 only
1, 3 and 4
2 only

18) Which, if any, of the following are ADVANTAGES of having a centralised office
function?
(1) Junior managers have more opportunities to take on
responsibility
(2) Expensive equipment can be used more economically
1 only
Both 1 and 2
Neither 1 nor 2
2 only

19) Which of the following is MOST likely to be a task of the accounts department?
Setting the sales budget
Negotiating prices and discounts with suppliers
Establishing procedures for hiring staff
Paying suppliers' invoices

20) Which of the following is NOT a requirement of useful management

information?
Cost beneficial
Complete
Timely
Budgeted

21) The following information is provided for component X:

(1) 2,400 units are in the
stores
(2) 6,700 units are on order
(3) 1,600 units are scheduled
for use
What is the amount of 'free' inventory?
2,400 units
800 units
10,700 units
7,500 units

22) A company manufactures motor vehicles. In the accounts' coding system, the
code for a particular vehicle model is Ve/26 and the code for the passenger door in
that model is Ve/26/12.
Using the same coding structure which of the following could represent the code for
the panel in the passenger door of that particular vehicle model?
Ve/26/12/08
Ve/29
Ve/26/15
Ve/27/12

23) The following information shows the power costs and supervision costs incurred
by an organisation at different levels of capacity utilisation.

Capacity utilisation 70% 80% 90% 100%

Power ($'000) 36 39 42 45
Supervision ($'000) 23 25 25 25
What cost behavioural classifications can be identified?
Power: semi-variable Supervision: fixed

Power: semi-variable Supervision: stepped-

 fixed

Power: variable Supervision: fixed

Power: variable Supervision: stepped-

fixed

24) A business has a net profit margin of 12.0% and asset turnover of 1.4 times.
What is the return on capital employed?
11.70%
8.60%
16.80%
13.40%

25) In a cost accounting system what would be the entry for the issue of INDIRECT
materials to a production cost centre?
Dr Production overhead Cr Raw materials account
account

Dr Work in progress account Cr Raw materials account

Dr Raw materials account Cr Production overhead

account

Dr Raw materials account Cr Work in progress account

26) An employee has a normal working week of 40 hours paid at a basic rate of $10
per hour. Hours in excess of normal are paid at a premium of 30%.

In a particular week the employee worked for 44 hours. Tax is payable at 20% of
gross wages and benefit contributions for the employee for the week were as follows:

$
Employee 25
Employer 37
The employee's net pay for the week was $336.60.
What was the employee's gross pay for the week?
$492.00
$498.25
$452.00
$478.32

27) Budgeted production overheads, allocated and apportioned to the four cost
centres in a factory for a period, are as follows:

Production cost centres Service cost centres

PCC1 ($) PCC2 ($) Stores ($) Maintenance
($)
28,600 21,800 6,200 8,160

Material requisitions and maintenance hours in the period are budgeted to be as

follows:

Material requisitions Maintenance hours

PCC1 300 80
PCC2 200 90
What is the total budgeted overhead in PCC2 after re-apportionment of service cost
centre overheads?
$35,400
$29,360
$28,600
$36,160

28) Jane works for XYZ Co. She has created a spreadsheet which lists contact
details for all XYZ Co's clients.
Which spreadsheet functions should she use to display details for all clients based
in the South region, ordered alphabetically?
Sorting and ranking
Filtering and ranking
Filtering and sorting
Ranking and linking

29) What in the use of spreadsheets is known as a cell?

The formatting of numbers
The formula placed in a particular location
A workspace divided into rows and columns
The intersection of a row and a column

30) At the end of its financial year a manufacturing company has the following
materials held in inventory:

(1) 100 toy cars which are complete but require packaging prior to being sold or
dispatched
(2) One ton of plastic which will be moulded into various products

Which of the following is the correct classification for the toy cars and the plastic?
Toy cars are work in progress and the plastic is raw material
Toy cars are finished goods and the plastic is raw material
Toy cars are finished goods and the plastic is work in progress
Both the toy cars and the plastic are work in progress

31) Which of the following is/are items that would be separately included in a job
cost?
(1) Cost of sales
(2) Direct labour
(3) Selling overhead
(4) Profit
2, 3 and 4
2 and 3 only
1 only
3 and 4 only

32) Daz Co uses process costing and a number of separate processes:

(1) Process Alpha has losses of 5% of input

(2) Process Beta has losses of 3% of input

Both processes have the same inputs.

Which of the following statements is/are true in relation to these processes?
(1) The Alpha total process cost is the same as the Beta total process cost
(2) The Alpha cost per unit is higher than the Beta cost per unit
Neither statement
Both statements
Statement 2 only
Statement 1 only

33) Which of the following are the main benefits of spreadsheets to the work of
management accountants?
(1) The ability to embed files produced using word processing software
(2) Linking of spreadsheets so that changes in data automatically feed from
one page to another
(3) The facility to perform 'what if' calculations
1, 2 and 3
2 and 3 only
1 and 2 only
3 only
34) The following statements are about documentation for direct materials requests:

(1) A materials requisition is completed after materials have been received by the
production department
(2) The buyer prepares a purchase order to ask for goods to be supplied

Are the statements true or false?

Both statements are true
Both statements are false
Statement 1 is false and statement 2 is true
Statement 1 is true and statement 2 is false

Question-35

36) Which of the following statements about information are true?

(1) Information is data that has been processed in such a way as to be meaningful
to the recipient
(2) The purpose of management information is to assist the efficient and effective
management of resources
 Statement 2 only
Both statements
Neither statement
Statement 1 only

37) Which of the following statements concerning the use of cost codes is/are true?
(1) The classification of costs is simplified
(2) Electronic data processing is facilitated
Both statements
Statement 1 only
Statement 2 only
Neither statement
38) The packaging section in a warehouse operates a piecework payment system as
follows:

Units packed Piecework rate

per unit ($)
1 to 5,000 0.04
5,001 to 8,000 0.05
8,001 and above 0.06

Only additional units packed, over the previous threshold, are paid at the higher
rates.
If 8,340 units are packed what are the wages?
$420.40
$367.00
$370.40
$500.40

39) The following statements relate to absorption and marginal costing:

(1) Absorption costing profit will always be higher than marginal costing profit in
any period when inventory is increasing
(2) Inventory valuations will always be greater if absorption costing rather than
marginal costing is used
Which of the statements are true?
Statement 1 only
Neither statement
Statement 2 only
Both statements
40) Which of the following may be used to measure performance in a profit centre?
(1) Net profit margin
(2) Residual income
(3) Return on capital
employed
(4) Asset turnover
1, 2, 3 and 4
1 and 4 only
1 only
2, 3 and 4 only
41) What is a cost unit?
A basis for cost classification
A unit of output in relation to which costs are ascertained
The cost per unit of output
The unit cost of direct materials and direct labour
42) A company manufactures product Z. A team of six direct operatives currently
manufactures five units of the product in one hour. Each operative is paid at $8 per
hour.
If productivity (output per hour) reduces by 10% what will be the direct labour cost
per unit of product Z (to two decimal places)?
$10.56
$10.67
 $9.60
$8.64
43) For direct workers how are overtime premiums and idle time costs normally
accounted for?
Overtime premiums: Indirect cost Idle time: Direct cost

Overtime premiums: Direct cost Idle time: Direct cost

Overtime premiums: Indirect cost Idle time: Indirect cost

Overtime premiums: Direct cost Idle time: Indirect cost

44) Would each of the following be classified as a direct or an indirect cost?

(1) The parts used by a vehicle mechanic in the repair of a car for a customer
(2) The salary of a factory manager
(3) The wages of a factory maintenance department

Direct: 1, 2 and 3 Indirect: -

Direct: 1 Indirect: 2 and 3

Direct: - Indirect: 1, 2 and 3

Direct: 1 and 2 Indirect: 3

45) Which of the following documents would form part of the purchasing system?
(1) Purchase invoice
(2) Goods received note
(3) Purchase requisition
1, 2 and 3
2 and 3 only
1 and 2 only
1 and 3 only
46) Which of the following can be contents of a spreadsheet cell?
(1) Formula
(2) Text
(3) Value
1 and 2 only
1 and 3 only
2 and 3 only
1, 2 and 3
47) Which of the following use process costing?
(1) Education provision
(2) Accounts preparation
(3) Soft drink production
(4) Oil refining
3 and 4
3 only
1 and 2
1 only
48) In a spreadsheet which menu options should be selected in order to save a copy
of the current worksheet whilst leaving the original document intact?
Insert and Save
File and Save As
File and Save
Insert and Save As

49) A company has two production cost centres, M and L. M absorbs overheads on
the basis of machine hours and L absorbs overheads on the basis of labour hours.
The following information is available for the next period:
Cost centre M L
Allocated and apportioned production $400,000 $600,000
overheads
Direct labour hours 50,000 150,000
Machine hours 80,000 30,000

Job ABC will require four machine hours and three labour hours in each of the two
production cost centres.
How much production overhead will be absorbed by job ABC?
$32
$31
$64
$44
50) Which of the following statements relating to management accounting reports
are true?
(1) They have a standard format
(2) They are prepared for internal
use
Statement 2 only
Neither statement
Statement 1 only
Both statements