M A ‐FMA: MANA GEME NT A CCO UN TIN G

232 For a product that has a positive unit contribution, which of the following events would
tend to increase total contribution by the greatest amount?

A 10% decrease in variable cost

B 10% increase in selling price
C 10% increase in volume sold
D 15% decrease in total fixed costs

233 Exp has compiled the following standard cost card for its main product.
$
Production costs
Fixed 33.00
Variable 45.10
Selling costs
Fixed 64.00
Variable 7.20
Profit 14.70
–––––––
Selling price 164.00
–––––––
What would the closing inventory be valued at under an absorption costing system (to 2
decimal places)?

COST ACCOUNTING METHODS

234 A company operates a job costing system. Job 812 requires $60 of direct materials, $40 of
direct labour and $20 of direct expenses. Direct labour is paid $8 per hour. Production
overheads are absorbed at a rate of $16 per direct labour hour and non‐production
overheads are absorbed at a rate of 60% of prime cost.

What is the total cost of Job 812?

A $240
B $260
C $272
D $320

235 Which one of the following statements is incorrect?

A Job costs are collected separately, whereas process costs are averages
B In job costing the progress of a job can be ascertained from the materials requisition
notes and job tickets or time sheet
C In process costing information is needed about work passing through a process and
work remaining in each process
D In process costing, but not job costing, the cost of normal loss will be incorporated into
normal product costs

68 KA PLAN P UB L I S H I N G