Foundations in

Accountancy/ACCA
Management
Accounting (MA)  
Total points 88/100

Email *

zhangyujiao2004@gmail.com

Question ( 1 ) What does the 2/2

statement 'sales is the principal
budget factor' mean?  

A The level of sales will determine

the level of cash at the end of the
period

B The level of sales will determine

the level of proBt at the end of the
period

C The company's activities are

limited by the level of sales it
can achieve

D Sales is the largest item in the

budget
Question ( 2 ) Budgeted sales of 2/2
X for December are 18,000
units. At the end of the
production process for X, 10%
of production units are
scrapped as defective. Opening
inventories of X for December
are budgeted to be 15,000 units
and closing inventories will be
11,400 units. All inventories of
finished goods must have
successfully passed the quality
control check.  What is the
production budget for X for
December?  

A 12,960 units

B 14,400 units

C 15,840 units

D 16,000 units
 Question ( 3 ) In which of the 2/2
following situations are
imposed budgets effective?  

A In large businesses

B During periods of economic

boom

C In well established businesses

D When the organisation's

different units require precise
organisation

Question ( 4 ) The sales 2/2

manager has prepared a
manpower plan to ensure that
sales quotas for the
forthcoming year are achieved.
 This is an example of what type
of planning?  

A Strategic planning

B Tactical planning

C Operational planning

D Corporate planning
:
 Question ( 5 ) 2/2

$25,100

$48,800

$50,200

$50,600

Question ( 6 ) In which of the 2/2

following situations are
imposed budgets effective?  

In large businesses

During periods of economic boom

In well established businesses

When the business's different

units require precise
organisation
:
 Question ( 7 ) Which of the 2/2
following best describes a
controllable cost?

A cost which can be easily

forecast and is therefore readily
controllable using budgetary
control techniques

A cost which can be speciBcally

identiBed with a particular cost
object

A cost which is easily controlled

because it is not affected by
Suctuations in the level of activity

A cost which can be

inSuenced by its budget holder
:
 Question ( 8 ) Participation by 2/2
staff in the budgeting process is
often seen as an aid to the
creation of a realistic budget
and to the motivation of staff.
There are, however, limitations
to the effectiveness of such
participation. Which of the
following illustrates one of
these limitations?

Participation allows staff to buy

into the budget

Staff suggestions may be

ignored leading to de-motivation

Staff suggestions may be based

on local knowledge

Budgetary slack can be built in by

senior manager as well as staff
:
 Question ( 9 )Which of the 2/2
following best describes a top-
down budget?  

A budget which has been set by

scaling down individual expenditure
items until the total budgeted
expenditure can be met from
available resources

A budget which is set by delegating

authority from top management,
allowing budget holders to
participate in setting their own
budgets

A budget which is set without

permitting the ultimate budget
holder to participate in the
budgeting process

A budget which is set within the

framework of strategic plans
determined by top management
:
 Question ( 10 ) What would be 2/2
the principal budget factor for a
footwear retailer ?

The cost item taking the largest

share of total expenditure

The product line contribution the

largest amount to sales revenue

The product line contribution the

largest amount to business proBts

The constraint that is expected

to limiy the retailer's activities
during the budget period .

Question ( 11 ) 2/2

( i ) and ( ii ) only

( i ) and ( iii ) only

( ii ) and ( iii ) only

( iii ) only
:
 Question ( 12 ) In the context of 2/2
budget preparation what does
the term ' goal congruence '
mean ?

The alignment of budgets with

objectives using feed-forward
control

the setting of a budget which does

not include budget bias

the alignment of corporate

objectives with the personal
objectives of a manager

the use of aspiration levels to set

eZciency targets
:
 Question ( 13 ) In a 2/2
responsibility accounting
system for which of the
following should the production
line manager be held
responsible ?

Raw material prices aand labour

wage rates

Raw material usage and labour

wage rates

Raw material prices and labour

hours worked

Raw material usage and labour

hours worked
:
 Question ( 14 ) Which of the 2/2
following best describes '
budgetary slack'

The difference between what has

been set as a budgetary objective
and what has been achieved for the
period

The demotivating impact of a

budgetary target that has been set
too high

The deliberate over-estimation

of expenditure and/or under-
estimattion of revenues in the
budgetary planning process

Accumulated favourable variances

reported against a speciBc item of
budgeted expenditure
:
 Question ( 15 ) Which of the 2/2
following is a disadvantage of
participation in standard
setting?

Morale and performance are

supressed

Staff may try to incorporate

budget padding

Decision making will not improve

Budget requirements are not clearly

communicated to staff

Question ( 16 ) Which of the 2/2

following is not a purpose of
budgeting?

Planning

Co-ordination

Consultation

Communication
:
 Question ( 17 ) Which of the 2/2
following is an NOT an
advantage of top-down
budgeting ?

It is less time consuming

It reduces budgetary slack

It is more likely to motivate

managers

Budgets will be closer to the

company's objectives

Question ( 18 ) One of the 2/2

purposes of  a budget is to set
targets to motivate managers
and optimise their performance.
Which of the following is most
likely to motivate mangers ?

The participation of managers

in the budget setting process

Imposed budgets

The inclusion of budgetary slack

Easy budget targets

:
 Question ( 19 )Which of the 2/2
following is an NOT an
advantage of Top-Down
budgeting ?

It is less time consuming

It reduces budgetary slack

It is more likely to motivate

managers

Budgets will be closer to th

company's objectives

Question ( 20 ) A company 2/2

plans to sell 24,000 units of
product R next year. Opening
inventory of R is expected to be
2,000 units and PQ Co plans to
increase inventory by 25% by
the end of the year.  How many
units of product R should be
produced next year?  

A 23,500 units

B 24,000 units

C 24,500 units

D 30,000 units
:
 Question ( 21 ) A company is in 2/2
the process of setting standard
unit costs for next period.
Product J uses two types of
material, P and S. 7 kg of
material P and 3 kg of material
S are needed, at a standard
price of $4 per kg and $9 per kg
respectively.  Direct labour will
cost $7 per hour and each unit
of J requires 5 hours of labour.
 Production overheads are to be
recovered at the rate of $6 per
direct labour hour, and general
overhead is to be absorbed at a
rate of ten per cent of
production cost.  What is the
standard prime cost for one unit
of product J?

A $55

B $90

C $120

D $132
:
 Question ( 22 ) 2/2

172,000

175,000

183,000

191,000

Question ( 23 ) 2/2

$278,500

$280,000

$289,000

$292,500
:
 Question ( 24 ) 2/2

$285,567

$286,620

$290,430

$312,830

Question ( 25 ) 2/2

$32,220

$42,870

$45,310

$47,590
:
 Question( 26 ) A company 2/2
makes 2 products, X and Y,
which are sold in the ratio 1:2 .
The selling prices are $50 and
$100 respectively. The company
wants to earn $100,000 over the
next period . What should the
sales budget be ?

( X = 1334 units ) ( Y = 667 units )

( X = 800 units ) ( Y = 400 units )

( X = 667 units ) ( Y = 1334 units )

( X = 400 units ) ( Y = 800 units )

:
 Question ( 27 ) 0/2

$ 12,200

$ 12,000

$ 11,590

$ 10,980

Correct answer

$ 12,200
:
 Question ( 28 ) A job requires 2/2
2,400 actual labour hours for
completion but it is anticipated
that idle time will be 20% of the
total time required . If the wage
rate is $10 per hour, what is the
budgeted labour cost for the job
, including the cost of the idle
time ?

$19,200

$24,000

$28,800

$30,000

Question ( 29 ) 2/2

$35,824

$36,400

$38,560

$40,000
:
 Question ( 30 ) 2/2

$84000

$80000

$44000

$12000
:
 Question ( 31 ) A company has 0/2
a two-month receivables' cycle .
It receives in cash 45% of the
total gross sales value in the
month invoicing. Irrecoverable
debts are 20% of the total gross
sales value and there is a 10%
discount for settling accounts
within 30 days. What proportion
of the first month's sales will be
received as cash in the second
month ?

25%

30%

35%

55%

Correct answer

30%
:
 Question ( 32 ) 0/2

$343000

$323000

$307000

$287000

Correct answer

$343000

Question ( 33 ) A company has 2/2

a current cash balance of $
7,000 , trade receivables of
$15,000 and trade payables of
$40,000 . The company can sell
goods costing $50,000 for
$70,000 next month . One half
of all sales are collected in the
month of sale and the
remainder in the following
month. All purchases are made
on credit and paid during the
following month . Inventory
levels will remain constant
during the month .General cash
expenses will be $60,000 during
the month. What is the cash
:
 balance at the end of the
month?

$25,000 overdrawn

$26,000 overdrawn

$33,000 overdrawn

$43,000 overdrawn

Question ( 34 )One of the 2/2

purpose of a budget is to set
target to motivate managers
and optimise their performance
. Which of the following is most
likely to motivate mangers ?

The participation of managers

in the budget setting process

Imposed budgets

the inclusion of budgetary slack

Easy budget targets

:
 Question ( 35 ) A process has a 2/2
normal loss of 10 % and
budgeted output is 4,500 litres
for the period. Opening
inventory of raw material is 600
litres and is expected to
increase by 20 % by the end of
the period . What is the material
usage budget ?

4,500 litres

5,000 litres

5,133 litres

5,120 litres
:
 Question ( 36 )How much may 0/2
Vincent expect to collect from
credit customers during July ?

$ 18,000

$ 20,000

$ 21,000

$ 24,000

Correct answer

$ 20,000
:
 Question ( 37 ) Galway Ltd 2/2
budgeted to make sales of $
1,500 , $ 1,800 and $ 2,800 in its
first three months of operation.
25 % of its sales are expected to
be for cash and another 25 % of
total sales will also be collected
in the same month by offering a
10 % discount; 40 % will be
collected in the following
month, and the remainder the
month after that. How much
cash did Galway Ltd budgeted
to receive in its third month of
operation ?

$ 1,800

$ 2,200

$ 2,270

$ 2,800
:
 Question ( 38 )In a responsibility 2/2
accounting system for which of
the following should the
production line manager be held
responsible ?

Raw material prices and labour

wage rates

Raw material usage and labour

wage rates

Raw material prices and labour

worked

Raw material usage and labour

hours worked

Question ( 39 ) What term 2/2

describes : ' the forecasting of
differences between actual and
planned outcomes, and the
implementation of action ,
before the event , to avoid such
differences ' ?

feedforward control

Variance analysis

Budgeting

feedback control
:
 Question  ( 40 ) An investment 2/2
project has a positive net
present value (NPV) of $7,222
when its cash flows are
discounted at the cost of capital
of 10% per annum. Net cash
inflows from the project are
expected to be $18,000 per
annum for five years. The
cumulative discount (annuity)
factor for five years at 10% is
3.791. What is the investment at
the start of the project?

$61,016

$68,238

$75,460

$82,778
:
 Question ( 41 ) In decision 0/2
making, costs which need to be
considered are said to be
relevant costs. Which of the
following are characteristics
associated with relevant costs?
 1. Future costs 2. Unavoidable
costs 3. Incremental costs 4.
Differential costs

1 and 3 only

1 and 2 only

1, 3 and 4 only

All of them

Correct answer

1, 3 and 4 only
:
 Question ( 42 ) 2/2

16%

18%

20%

22%

Question ( 43 ) What is an 0/2

interest rate that includes the
effect of compounding known
as?

Nominal interest

Simple interest

Compound interest

Effective interest

Correct answer

Effective interest
:
 Question ( 44 )   2/2

Bank account = 1

Bank account = 2

Bank account = 3

Bank account = 4
:
 Question ( 45 )The following 2/2
measures have been calculated
to appraise a proposed project ,
The Internal rate of return is 12
% , The return on capital
employed is 16 % , The cost of
capital is 10 % , The payback
period is 4 years . Which of the
following statements is correct
?

the payback is less than 5 years so

the project should go ahead

the IRR is lower than the return on

capital employed so the project
should not go ahead

the IRR is greater than the cost

of capital so the project should
go ahead

The IRR is positive so the project

should go ahead
:
 Question ( 46 ) Sales and 2/2
variable costs will increase in
line with the seating capacity
increase. The other costs are 40
% fixed. An extra employee will
be required to serve the extra
seating capacity. There are
currently 4 employees on an
equal wage. What is the relevant
annual cash flow to the nearest
$000 of the proposed expansion
?

$ 88,000

$ 44,000

$ 77,000

$ 80,000
:
 Question ( 47 ) Thereafter, no 2/2
incremental profits are expected
and the machinery will be sold .
It is company policy to
depreciate machinery on a
straight line basis over the life
of the asset. The machinery is
expected to have a value of $
50,000 at the end of year 5.
What is the payback period of
the investment in this
machinery ?

0.9 years

1.3 years

1.5 years

1.9 years
:
 ~ Question 48 ~ Which of the 2/2
following describes a standard
cost?

The planned unit cost of a

product, component or service
in a period

The budgeted cost ascribed to the

level of activity achieved in a
budget centre in a control period

The budgeted production cost

ascribed to the level of activity
achieved in a budget period

The amount of work achievable in

an hour, working at standard
eZciency levels

~ Question 49 ~ Which of the 2/2

following statements best
describes direct costs?

Costs under the direct control of a

manager

Costs to be paid within the current

accounting period

Costs directly identiBed with a

product or service

Costs passed directly to customers

:
 ~Question 50 ~  A company's 2/2
operating costs are 60%
variable and 40% fixed.  Which
of the following variances'
values would change if the
company switched from
standard marginal costing to
standard absorption costing?

Direct material eZciency variance

Variable overhead eZciency

variance

Sales volume variance

Fixed overhead expenditure

variance

This content is neither created nor endorsed by Google. -

Terms of Service - Privacy Policy

 Forms
: