Professional Documents
Culture Documents
Paper MA1
MANAGEMENT INFORMATION
Mock Exam 1 : 8 SEPTEMBER 2023
Name :
Student ID :
Group :
Answer all questions – Use the answer sheet at the end of this exam to
record your answer.
This question paper must not be removed from the examination hall.
1. Which of the following words DOES NOT describe a main focus of management
accounting?
A Planning
B Control
C External
D Decision-making
A i and ii only
B ii and iii only
C i and iii only
D None of the above
3. If actual units produced are lower than the budgeted level of production, which of the
following actual costs would you expect to be lower than the budget?
4. The audit fee paid by a manufacturing company would be classified by the company
as______.
A production overhead
B selling and distribution cost
C research and development cost
D administration cost
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6. Which of the following activities would not be considered an overhead support activity
in a clothing factory?
A Ordering material
B Maintaining the machines
C Training machine operators
D Cutting the material according to patterns
Debit Credit
A Income statement Production overhead
B Work-in-progress Production overhead
C Production overhead Income statement
D Production overhead Work-in-progress
8. An engineering firm operates a job costing system. Production overhead is absorbed at the
rate of $8.50 per machine hour. In order to allow for non-production overhead costs and profit,
a mark-up of 60% of prime cost is added to the production cost when preparing price estimates.
The estimated requirements of job number 808 are as follows:
What will be the estimated price notified to the customer for job number 808?
A $22,256
B $22,851
C $23,446
D $24,160
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10. The following data have been collected for four cost types: W, X, Y, and Z at two activity levels.
Which of the following classifications could describe the cost behaviour for W,X,Y, and
Z?
W X Y Z
A V F SV V
B SV F V SV
C V F V V
D SV F SV SV
11. Based on the data below, what is the amount of the overhead under-/over-absorbed?
A $20,957 under-absorbed
B $21,015 over-absorbed
C $21,015 under-absorbed
D $41,972 under-absorbed
12. RS is currently preparing the production budget for Product A and the material purchase budget
for material X for the forthcoming year. Each unit of Product A requires 5 kgs of material X.
The anticipated opening inventory for Product A is 5,000 units and the company wishes to
increase the closing inventory by 30% by the end of the year.
The anticipated opening inventory for material X is 50,000 kgs and in order to avoid stock outs
the required closing inventory has been increased to 60,000 kgs. The Sales Director has
confirmed a sales requirement of 70,000 units of Product A.
A 68,500 units
B 71,500 units
C 76,500 units
D 80,000 units
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13. TOP is currently preparing the production budget for Product A and the material purchase
budget for material X for the forthcoming year. Each unit of Product A requires 5 kgs of material
X.
The anticipated opening inventory for Product A is 5,000 units and the company wishes to
increase the closing inventory by 30% by the end of the year.
The anticipated opening inventory for material X is 50,000 kgs and in order to avoid stock outs
the required closing inventory has been increased to 60,000 kgs.
The Sales Director has confirmed a sales requirement of 70,000 units of Product A.
A 347,500 kgs
B 350,000 kgs
C 357,500 kgs
D 367,500 kgs
A The additional amount paid for hours worked in excess of the basic working week
B The additional amount paid over and above the normal hourly rate for hours worked in
excess of the basic working week
C The additional amount paid over and above the overtime rate for hours worked in excess
of the basic working week
D The overtime rate
16. Which of the following statements in connection with process costing are correct?
i. A loss expected during the normal course of operations, for unavoidable reasons, is
abnormal loss
ii. An unexpected loss is an abnormal loss
iii. An abnormal loss arises if the actual loss is greater than the expected loss
iv. A normal loss is never less than actual loss
A i and ii
B ii and iii
C i and iv
D ii and iv
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17. A company produces a single product that passes through two processes. The details for
process 1 are as follows:
The output for the period was 18,500 kg from process 1. There was no work-in-progress at
the beginning or end of the period.
A Nil
B 3,000 kg
C 2,775 kg
D 2,000 kg
18. A company has been asked to quote for a job. The company aims to make a net profit of 30%
on sales. The estimated cost for the job is as follows:
Variable production overheads are recovered at the rate of $2 per labour hour. Fixed
production overheads for the company are budgeted to be $100,000 each year and are
recovered on the basis of labour hours. There are 10,000 budgeted labour hours each year.
Other costs in relation to selling, distribution and administration are recovered at the rate of $50
per job.
A $572
B $637
C $700
D $833
19. Which of the following statements are correct about step down method?
A i and ii
B i and iii
C ii and iv
D iii and iv
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20. XYZ operates an integrated accounting system. The material control account at 31 March
2023 shows the following information:
A i only
B ii only
C i and ii only
D All of the above
22. A sport equipment company uses a pre-determined overhead absorption rate based on labour
hours. The budgeted overheads for September were $3,161,700 and the actual overheads
were $3,096,900. Budgeted labour hours were 175,650 and the overheads were over-absorbed
by $28,800.
A 170,450 hours
B 173,650 hours
C 174,016 hours
D 177,283 hours
23. What source document is used to determine the actual amount of direct materials to
record on a job cost sheet?
A Bill of material
B Production order
C Material purchase order
D Material requisition order
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24. Which of the following statement/s, about filling a range of spreadsheet cells, is/are
TRUE?
i. Type Jan in cell A1. Select cell A1 and fill down to cell A3. The result is Feb in cell A2 and
Mar in cell A3
ii. Type the number 1 in cell A1. Select A1 and fill down to cell A4. The result is 2 in cell A2,
3 in cell A3 and 4 in cell A4
iii. Type the number 2 in cell A1 and 4 in cell A2. Select A1 and A2 and fill down to cell A4.
The result is 2 in cell A3 and 4 in cell A4
iv. Type Jan in cell A1. Select cell A1 and fill down to cell A3. The result is also Jan in cell A2
and cell A3
A i only
B i and ii only
C ii and iv only
D ii, iii and iv only
25. Which of the following is correct about the use of the high–low method of cost
estimation?
26. Which of the following statements about predetermined overhead absorption rates are
true?
A i and ii only
B i and iii only
C ii and iii only
D All of the above
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28. Chin Co budgets during its first year, of operations to produce and sell 38,160 litres of product
per annum at a selling price of $10 per litre.
$ per unit
Variable production costs 3.54
Fixed production costs 1.04
Variable selling costs 2.50
In the first year the unit selling price was $10 per litre and the variable unit cost and expenditure
on fixed production costs were also as budgeted. Actual sales volume was 38,400 litres and
closing inventory was 960 litres.
A $113,376
B $112,378
C $112,128
D $110,880
29. Which of the following is correct for a period of continual price inflation for material
purchases?
A The LIFO method will produce lower profits than the FIFO method, and lower closing
inventory values
B The LIFO method will produce lower profits than the FIFO method, and higher closing
inventory values
C The FIFO method will produce lower profits than the LIFO method, and lower closing
inventory values
D The FIFO method will produce lower profits than the LIFO method, and higher closing
inventory values
30. The following statements are correct when referring to process costing except______.
31. A company uses a First In First Out (FIFO) system for pricing inventory issues. During
a period, product costs were overstated and profits were understated. This meant that
during the period, prices were______.
A rising
B falling
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32. A job requires 2,400 actual labour hours for completion, and it is anticipated that there will be
20% idle time. The wage rate is $10 per hour.
A $19,200
B $24,000
C $28,800
D $30,000
33. A factory consists of two production cost centres (P and Q) and two service cost centres (X
and Y). The total allocated and apportioned overheads for each are:
P Q X Y
$95,000 $82,000 $50,000 $30,000
It has been estimated that each service cost centre does work for the other cost centres in
the following proportion:
P Q X Y
% of service cost centre X 40 40 - 20
% of service cost centre Y 20 60 10 -
What will be the total reapportioned overhead cost for production cost centre P using
direct method?
A $28,000
B $32,500
C $127,500
D $123,000
A Production disruption
B Stock-outs
C Strikes affecting vital supplies
D A wage increase
35. Which of the following graphs would be used to identify trends in data?
A A scatter graph
B A bar chart
C A pie chart
D A line graph
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36. John is an assembly worker. Details of his gross pay for the week are as follows:
Basic pay for normal hours worked (40 hours at $10 per hour) $400
Overtime (15 hours at time and half) $225
Gross pay $625
Although he is paid for normal hours in full, John has been idle for 10 hours during the week
because of the absence of any output from the machining department.
The indirect labour costs that are included in his total gross pay of $625 are______.
A $75
B $100
C $175
D $325
37. You are the accountant responsible for the input into the computer accounting system of data
about goods received from supplier. For each transaction, you require to see the purchase
order, delivery note, goods received note and invoice.
Which document is most likely to find the code number for an item of inventory to be
entered into the system?
A Purchase order
B Delivery note
C Goods received note
D Invoice
38. Which of the following types of business unit would residual income be a suitable
measure of performance?
A Cost centre
B Revenue centre
C Profit centre
D Investment centre
39. The following are information about Tech Co for quarter 1 of 2023:
A 93.8%
B 91.7%
C 109.1%
D 102.3%
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40. Spice Co has a capital employed of $300,000. It has a cost of capital of 13% per year and its
residual income is $6,000.
A 2%
B 10%
C 13%
D 15%
41. Which of the following statements concerning marginal costing are true?
A i and ii only
B i and iii only
C ii and iv only
D iii and iv only
42. A factory worker is paid a basic wage of $2,100 per week based on 35 standard working hours
per week. Overtime is paid at the following rates:
Weekly total less than 40 hours 20% premium on all overtime hours
Weekly total more than 40 hours 40% premium on all overtime hours
A $2,349
B $2,388
C $2,496
D $2,937
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43. The formula =$B$1*B$4 has been entered into cell B5.
A 0
B Nil
C 30,000
D 45,000
A i only
B ii only
C i and ii
D Neither i nor ii
46. The principal difference between process costing and job costing is that in job costing an
averaging process is used to compute the unit costs of products or services.
A True
B False
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A Number
B Text
C Formula
D Graph
A i and ii only
B i and iii only
C ii and iii only
D All of the above
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