QUESTION#1

The following information has been provided for four costs at various levels of production.

Production 100 200 300 500

units
$ $ $ $
Cost A 10,000 20 per unit
Cost B 1,250 1,750
Cost C 30,000 30,000
Cost D 500 1,500
Which of the costs is a variable cost?
Cost D
Cost C
Cost B
Cost A

QUESTION#2

What is an organisation chart designed to show?

Directions of responsibility
Coding structure
Main items of expenditure
Aim of the organization

QUESTION#3

What is meant by the classification of costs by behaviour?

Classification according to how costs change with activity
Classification of costs as material, labour and other expenses
Classification of costs as prime costs and overheads
Classification according to whether costs are direct or indirect
QUESTION#4

What is a cost unit?

A section of the business where a manager is only responsible for costs
The cost per unit of a product or service
A unit of a product or service which has costs attached to it
A number of different products combined together for cost analysis

QUESTION#5

Forecast sales and production of product P in the next period are 6,000 units and 5,800
units respectively. 50 litres of material M are used per 100 units of product P. Inventory
of material M is planned to be reduced by 60 litres in the next period.
What quantity of material M needs to be purchased in the next period?
2,840 litres
3,060 litres
2,940 litres
2,960 litres

QUESTION#6

Which accounts need to be charged for factory wages used in production?

Wages control, production overhead and bank
Creditors and wages control
Wages control, work in progress and production overhead
Work in progress and finished goods

QUESTION#7

A direct worker in a production cost centre worked for 41 hours in week 6. The basic
week is 38 hours and the basic rate of pay is $12 per hour. Extra hours are worked to
meet the general needs of the business and are paid at a premium of 20% above the
basic rate.
How much of the direct worker's gross wages in week 6 would be charged as a
direct cost?
$535.20
$456.00
$492.00
$499.20

QUESTION#8

A company has two divisions: North and South. The accountant is preparing a sales
report totalling sales from both divisions. The spreadsheet includes three worksheets:
"Total", "North" and "South". The layout of the spreadsheet is the same for each
worksheet.

What formula will be used in cell C3 on the 'Total' spreadsheet to show the
company's total sales for Product 1 in January?
=North!C3:South!C3
=NorthC3+SouthC3
=North!C3+South!C3
=!NorthC3+!SouthC3

QUESTION#9

The management accountant is trying to display a large amount of data in a

spreadsheet but finding it difficult to prevent the column and row headings from scrolling
off the screen. She wants to 'freeze' the first four rows and the first three columns
(shaded below) using the freeze panes function:

Where should the management accountant position the cell pointer when she
clicks the 'Freeze panes' function in order to freeze the first four rows and the
first three columns as illustrated?
In cell D4
In cell C4
In cell D5
In cell C5

QUESTION#10

In the cost coding system of Company A each digit of a code represents a classification,
with each digit further to the right representing a smaller subset than the previous digit.
What type of coding system is Company A using?
Sequential
Block
Mnemonic
Hierarchical
QUESTION#11

Binht Co needs 3 active labour hours to produce a single unit. Labour is paid $20 per
hour and idle time is expected to be 20% of total labour hours.
What is the total labour cost of producing 270 units?
$19,440
$13,500
$20,250
$12,960

QUESTION#12

Which of the following is/are advantages of using spreadsheets?

(1) They are suitable for holding very large volumes of data
(2) They enable data to be manipulated easily
(3) They enable complex 'what if' analysis to be performed quickly
(4) Large spreadsheets are unlikely to contain any critical errors

2 and 3 only
1, 2, 3 and 4
2 only
1 and 4 only

QUESTION#13

Which of the following correctly describes the range of cells below?

 C4:F8
C8:F4
F4:C8
C4:F4

QUESTION#14

The image below shows the 'Circular References' error message shown in a
spreadsheet status bar.

What could cause a circular reference error?

A formula dividing a number by zero
A formula referring to a cell containing text
A formula which does not separate cell references correctly
A formula which includes a reference to its own cell address

QUESTION#15

Which of the following statements reflect attributes of real time processing in a

computer data processing environment?
(1) Control over the input of data is facilitated
(2) It is suitable for internal regular tasks
(3) Transactions are input and processed immediately
(4) Up-to-date information is always available

1 and 2
2 and 3
3 and 4 only
1, 3 and 4

QUESTION#16

Which of the following are usual tasks carried out by the accounts department in
a large business?

(1) Preparation of the payroll

(2) Payment of suppliers invoice
(3) Quality control of finished product
(4) Deciding on selling prices

2 and 3 only
1 and 4
1 and 2
2, 3 and 4

QUESTION#17

Which of the following would MOST likely influence the content of a management
information report?
The degree of accuracy of the information within the report
Whether the information is from internal or external sources
The cost of obtaining the necessary information
 The information requirements of the recipient of the report

QUESTION#18

Management needs information to make choices between alternatives.

Which purpose of management information is the above statement an illustration
of?
Reporting
Planning
Decision-making
Control

QUESTION#19

Which of the following are characteristics of job costing?

(1) Job costs are ascertained for a single order or contract

(2) Large volumes of job units are produced and stored as inventory for re-sale
(3) It is possible to identify a job at each stage of completion
1 and 2 only
1, 2 and 3
1 and 3 only
3 only

QUESTION#20

Which of the following statement(s) about coding is/are CORRECT?

(1) A code is a system of words, letters, figures or symbols used to represent other items
(2) Authorisation of transactions is not required if codes are used
(3) Costs are coded to facilitate their entry into the accounting records

2 only
 1 and 3
2 and 3
1 only

QUESTION#21

Telecommunication costs incurred by a business each month are made up of a standing

charge plus an additional amount according to the volume of communications.
How would the telecommunication costs be classified?
Variable cost
Stepped cost
Semi-variable cost
Fixed cost

QUESTION#22

Which of the following correctly states the activities of a responsibility centre?

A profit centre is responsible for revenues only
An investment centre is responsible for costs and capital investment only
An investment centre is responsible for revenues and capital investment only
A profit centre is responsible for costs and revenues only

QUESTION#23

The following information relates to a division of a business for a period:

Sales revenue $420,000

Capital employed $260,000
Net (operating) profit margin 10%
Cost of capital 8%

What is the residual income of the division?

2%
 $3,200
$7,600
$21,200

QUESTION#24

Which of the following statements would be TRUE if raw materials prices were
rising?
LIFO would give a lower closing inventory valuation than FIFO
Periodic weighted average would give a lower closing inventory valuation than the
cumulative weighted average pricing method
Under LIFO production costs would be lower than under FIFO
FIFO would give a lower profit figure than LIFO

QUESTION#25

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 would be the total wages for the packaging
section?
$500.40
$420.40
$370.40
$367.00

QUESTION#26
Which of the following costs would MOST appropriately be apportioned to cost
centres on the basis of floor space occupied?
Heat and light
Indirect labour
Indirect material
Machine depreciation

QUESTION#27

Central costs in a business are shared to each cost centre.

What term is used for such costs sharing?
Apportionment
Absorption
Re-apportionment
Allocation

QUESTION#28

Moon Co has two departments: A and B.

The following information is available for these departments;

Department Department
A B
$ $
Sales 150,000 220,000
Profit 80,000 65,000
Assets 550,000 800,000
Liabilities 124,000 175,000
Which of the following ROCE calculations is correct?
Department B: 8.13%
 Department A: 35.21%
Department B: 27.5%
Department A: 18.78%

QUESTION#29

Which of the following identifies a row of cells in a spreadsheet?

A1 - G1
A1 - Z10
A5 - B6
A1 - A20

QUESTION#30

Which of the following correctly describes the calculation of unit cost of

production using batch costing?
Direct cost divided by the number of batches produced
Full production cost divided by the number of units in the batch
Cost of sale divided by units in the batch
Prime cost divided by the number of batches produced

QUESTION#31

A sales representative is completing a spreadsheet with sales information for the week.
The spreadsheet contains the customer name, quantity ordered, the order status and
the payment status.
There are 250 records to be entered.
Which of the following spreadsheet features will be most useful to the sales
representative for the data entry?
Using auto-fill
Freezing the column
Splitting the screen
Freezing the row

QUESTION#32

What is a spreadsheet file with multiple sheets often referred to as?

Worksheet
Database
Document
Workbook

QUESTION#33

Which of the following would NOT be a task of a trainee accountant?

Calculate materials cost
Estimate product profitability
Authorising invoices
Value inventory

QUESTION#34
Which of the following is an advantage of having centralised rather than de-
centralised business administration?
Economy in terms of space and cost
Systems tailored to individual requirements
Administration under control of local management
Self-sufficient local offices

QUESTION#35

In which department is a purchase order usually prepared?

Dispatch department of the supplying organisation

Accounts department of the supplying organisation
Purchasing department of the buying organisation
Inventory stores department of the buying organisation

QUESTION#36

What document is required to authorise an issue of raw material from stores?

Credit note
Materials requisition
Purchase requisition
Sales invoice

QUESTION#37

How is the contribution per unit calculated in marginal costing?

Selling price less total production costs per unit
Selling price less total costs per unit
Selling price less total variable costs per unit
Selling price less variable production costs per unit
QUESTION#38

A company absorbs indirect costs as follows:

Production overheads $29.40 per machine hour worked

Selling and administration overheads 12% of total production costs

During a period 6,000 units of a product were manufactured in 1,000 machine

hours. Direct costs incurred in the manufacture of the product were:

Raw materials $18,600

Labour 1,800 hours at $15 per hour

What is the total cost per unit of the product?

$37.00
$14.00
$41.44
$12.50

QUESTION#39

The labour efficiency and capacity utilisation ratios in a period were 112% and 94%
respectively.
What was the production volume ratio in the period (to the nearest %)?
84%
119%
105%
106%

QUESTION#40

Materials inventory at the beginning of the month totalled $16,780. The following lists
activity during the month:
 $
Purchases of materials, all on credit $33,660
Issues of direct materials from inventory $29,010
Issues of indirect materials from inventory $1,980
Return of materials to suppliers $860
Return of materials to inventory following over-issue $620

What was the inventory of materials at the end of the month?

$19,690
$20,930
$19,450
$19,210

QUESTION#41

In month 2, the materials purchased by a manufacturing business totalled

$126,440. The materials inventory at the end of month 2 was $75,770. During month 2
the issues of direct materials to production were $114,960 and issues of indirect
materials were $7,590.
What was the balance on the materials control account at the beginning of month
2?
$79,660
$71,880
$56,700
$94,840

QUESTION#42

In a factory cost centre, direct workers are paid $9 per hour. Ten units of product A are
manufactured per direct labour hour.
If productivity improves by 10%, what will be the direct labour cost per unit of
product A (to two decimal places)?
$0.90
 $1.11
$0.82
$0.81

QUESTION#43

Actual and budgeted figures for a manufacturing cost centre for a period are:

Actual Budget
Overhead costs $181,250 $150,000
Labour hours 75,000 72,000

Labour hours are used to absorb the overheads in the cost centre.
What is the predetermined overhead absorption rate (to two decimal places)?
$2.52
$2.00
$2.08
$2.42

QUESTION#44

A spreadsheet includes the following pie chart which is used to analyse the company’s
total production cost for a product. The direct material cost was $195,500.
What are the production overheads for the product?

$337,069
$493,000
$552,500
$850,000

QUESTION#45

Below is a schedule of expenses for Kathy prepared using a spreadsheet.

Which formula would give the average monthly cost?
=SUM(B4:B9)
=AVERAGE(B4/B9)
=AVERAGE(B4:B9)
=SUM(B10/6)

QUESTION#46

The formula = B5*B9 - D1/D2 appears in a spreadsheet cell.

Which of the following is a way to re-write the formula in order to produce the
same result?
B5 x [B9 - (D1 ÷ D2)]
[B5 x (B9 - D1)] ÷ D2
[(B5 x B9) - D1] ÷ D2
(B5 x B9) - (D1 ÷ D2)

QUESTION#47

The information below contrasts management accounting with financial accounting.

Management accounting Financial accounting

(1) Accounts presentation determined by (1) Accounts presentation determined by
standards management
(2) Accounts used both within a business (2) Accounts used within a business only
and externally
(3) Concerned both with past data and (3) Focused on past data
future data
(4) Concerned with financial information (4) Concerned with both financial and non-
only financial information
Which of the contrasts is/are TRUE?
3 only
1, 3 and 4
2 and 4
1 and 2

QUESTION#48

Which of the following relate to process costing?

(1) Output is always a single product

(2) By products and joints can be produced
(3) It is a continuous production process
(4) Output of one process can become the input of the
next process
2 and 3 only
1, 2, 3 and 4
2, 3 and 4 only
1 and 4 only

QUESTION#49

The following information is provided for the amount of a raw material used in the
production of a product.

(kg)
Held in stores 650
On order 1,350
Scheduled for use 420
What is the amount of 'free' inventory?
1,580 kg
230 kg
2,420 kg
2,000 kg

QUESTION#50

Glip Co uses process costing. In March, 25,000 litres were input to one of its processes.
The normal loss in the process is 8%. The actual output in March was 23,200 litres.
Which of the following occurred in March?

An abnormal gain of 1,800 litres

An abnormal loss of 1,800 litres
An abnormal loss of 200 litres
An abnormal gain of 200 litres