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# ACCA

## Management Accounting Mock Exam 2

(Duration: 3 hours)

LSAM

Paper F2

## Mock Exam - 2 (Answers)

C OAR = \$176,400/3,600 = \$49 \$ Amount absorbed = \$49 Actual overhead Over absorbed 5,400 = 264,600 (250,400) _______ 14,200 _______

D Process account Materials (100% complete) Units 10,000 CWIP Normal loss Output Abnormal loss Units 1,000 200 8,000 800 ______ 10,000 ______

## ______ 10,000 ______

B False A principal budget factor is a factor which limits the activities of the organisation.

B The question stated that there were just three possible outcomes for profit in a decision situation. The requirement asked for the most likely level of profits, that is the one of the three possibilities with the highest probability of occurring. The probability of a \$29,000 profit was.0.25 and that of a \$20,000 profit was 0.4.

B

B
\$216,000 = 6,750 hours \$32

Budgeted hours =

LondonSAM

F2 - Management Accounting

## Mock Exam - 2 (Answers)

B False It is a method of attributing total production cost centre overheads to a cost unit, not total costs.

A

A

C {[Buffer inventory + (EOQ 2)] = [800 units + (1,600 units 2)] Annual holding cost per component} 3.50 = 5,600

A Normal time = 936 108 = 828 hours Number of employees = 23

C Direct labour charge is all hours (including overtime) at normal rate: 936 \$6.20 = \$5,803.20

B

A

A Assembly Allocated o/hs Maintenance 90,000 6,000 ______ 96,000 ______ Finishing 100,000 4,000 _______ 104,000 _______ Maintenance 10,000 (10,000) ______ ______

## OAR for Assembly department = 96,000/10,000 machine hours = 9.60

LondonSAM

F2 - Management Accounting

## Mock Exam - 2 (Answers)

D Output(kg) Product A Product B 2,000 4,000 Sales value (\$) 24,000 72,000 ______ 96,000 ______ Apportionment of joint costs (\$) (24/96) (72/96) 7,500 22,500 ______ 30,000 ______

C (\$30 2,000) + (\$30 1,600) + (\$50 2,200) = \$218,000

C All stocks are increasing, so absorption costing profits will be higher by: (\$30 2,00) + (\$30 100) + (\$50 200) = \$19,000

C Units High Low Difference 52 25 27 Total costs 7,000 5,500 1,500

## By substitution, we find FC = 4,111.

C

C Y = a + bx 330/11 = a + (0.69171 440)/11

30 = a +27.66 so a = 2.33

LondonSAM

F2 - Management Accounting

## Mock Exam - 2 (Answers)

B

A Total hours worked, and paid = 3,300/0.75 = 4,400 hours Hourly rate = \$36,300/4,400 = \$8.25

A

D Total costs Profit margin Price = \$30 = 25%, therefore cost = 75% = \$30 0.75 = \$40

C

D Overheads incurred Actual absorption Over-absorbed 186,000 6,000 210,000 _______ 24,000

175,000 5,000

B

B Marginal costing profit Plus (15,000 25,000) \$6 180,000 (60,000) _______ 120,000 _______

## Equals absorption costing profit

A

LondonSAM

F2 - Management Accounting

## Mock Exam - 2 (Answers)

B The original cost of \$49,000 is a past cost, or sunk cost, and is therefore irrelevant. The material would not be re-worked, since its value would only increase by \$5,000 (\$17,500 \$12,500) for a cost of \$7,500. The relvant cost of using the material on the job is, therefore, the opportunity cost of the scrap sale foregone, i.e. 12,500.

C

C

D Material required to meet maximum demand: 6000 (134) + 8,000 (194) = 57,500 litres Material available = 55,000 litres. Therefore, material is a limiting factor. Labour required to meet maximum demand: 6000 (357) + 8,000 (287) = 62,000 hours Labour available = 58,000 hours. Therefore, labour is a limiting factor.

A Breakeven sales revenue = Fixed costs = \$30,000 ontribution to sales ratio

0.25 = \$120,000

A

LondonSAM

F2 - Management Accounting

## Mock Exam - 2 (Answers)

B

C

C Contribution = Profit + Fixed costs

B AH AR = 9,550 Rate variance AH SR = 9,550 \$5.5 = 52,525 4,775 F \$6.0 = 57,300

C Budgeted production Traditional Modern Labour hours

## = 6,600 = 10,800 16) = 238,800

B

A Sales contribution on actual sales Less: Adverse total variable costs variance Actual contribution \$50,000 (\$3,500) \$46,500

No adjustment is required for the favourable sales volume contribution variance, as it will have already been added to the budgeted contribution to arrive at the standard contribution from actual sales (\$50,000) given in the question.

D

LondonSAM

F2 - Management Accounting

## Mock Exam - 2 (Answers)

A For the first 10 hours of calls only the fixed line rental is charged therefore the answer cannot be B or D, which show no costs until a number of hours have passed. Graph C shows a variable cost is charged from nil to a maximum number of hours which is incorrect.

A As the machine stands idle but must be retained, there is no future cash flow related to keeping it for the contract. The relevant cost is zero.

B Contribution per unit Volume required = \$(300 234) =
3,000,000 500,000 66

= \$66 = 53,030