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ACCA

Management Accounting Mock Exam 2

Answers
(Duration: 3 hours)

LSAM

Paper F2

Mock Exam - 2 (Answers)

ANSWER 1
C OAR = $176,400/3,600 = $49 $ Amount absorbed = $49 Actual overhead Over absorbed 5,400 = 264,600 (250,400) _______ 14,200 _______

ANSWER 2
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 ______

ANSWER 3
B False A principal budget factor is a factor which limits the activities of the organisation.

ANSWER 4
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.

ANSWER 5
B

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

Budgeted hours =

LondonSAM

F2 - Management Accounting

Mock Exam - 2 (Answers)

ANSWER 7
B False It is a method of attributing total production cost centre overheads to a cost unit, not total costs.

ANSWER 8
A

ANSWER 9
A

ANSWER 10
C {[Buffer inventory + (EOQ 2)] = [800 units + (1,600 units 2)] Annual holding cost per component} 3.50 = 5,600

ANSWER 11
A Normal time = 936 108 = 828 hours Number of employees = 23

ANSWER 12
C Direct labour charge is all hours (including overtime) at normal rate: 936 $6.20 = $5,803.20

ANSWER 13
B

ANSWER 14
A

ANSWER 15
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)

ANSWER 16
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 ______

ANSWER 17
C ($30 2,000) + ($30 1,600) + ($50 2,200) = $218,000

ANSWER 18
C All stocks are increasing, so absorption costing profits will be higher by: ($30 2,00) + ($30 100) + ($50 200) = $19,000

ANSWER 19
C Units High Low Difference 52 25 27 Total costs 7,000 5,500 1,500

Therefore, Variable costs =

1,500 = 55.56 per unit 27units

By substitution, we find FC = 4,111.

ANSWER 20
C

ANSWER 21
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)

ANSWER 22
B

ANSWER 23
A Total hours worked, and paid = 3,300/0.75 = 4,400 hours Hourly rate = $36,300/4,400 = $8.25

ANSWER 24
A

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

ANSWER 26
C

ANSWER 27
D Overheads incurred Actual absorption Over-absorbed 186,000 6,000 210,000 _______ 24,000

175,000 5,000

ANSWER 28
B

ANSWER 29
B Marginal costing profit Plus (15,000 25,000) $6 180,000 (60,000) _______ 120,000 _______

Equals absorption costing profit

ANSWER 30
A

LondonSAM

F2 - Management Accounting

Mock Exam - 2 (Answers)

ANSWER 31
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.

ANSWER 32
C

ANSWER 33
C

ANSWER 34
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.

ANSWER 35
A Breakeven sales revenue = Fixed costs = $30,000 ontribution to sales ratio

0.25 = $120,000

ANSWER 36
A

LondonSAM

F2 - Management Accounting

Mock Exam - 2 (Answers)

ANSWER 37
B

ANSWER 38
C

ANSWER 39
C Contribution = Profit + Fixed costs

ANSWER 40
B AH AR = 9,550 Rate variance AH SR = 9,550 $5.5 = 52,525 4,775 F $6.0 = 57,300

ANSWER 41
C Budgeted production Traditional Modern Labour hours

= 7,500 + 900 1,800 = 12,000 + 1,200 2,400 = (6,600 10) + (10,800

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

ANSWER 42
B

ANSWER 43
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.

ANSWER 44
D

LondonSAM

F2 - Management Accounting

Mock Exam - 2 (Answers)

ANSWER 45
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.

ANSWER 46
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.

ANSWER 47
B Contribution per unit Volume required = $(300 234) =
3,000,000 500,000 66

= $66 = 53,030

ANSWER 48
B Process account Materials Conversion Units 2,000 _____ 2,000 _____ Average cost = ($12,500 $ 8,000 4,500 ______ 12,500 ______ 200) = $6.75 Normal loss Output Abnormal loss Units 200 1,700 100 _____ 2,000 _____ $ 350 11,475 675 ______ 12,500 ______

$350)/(2,000

ANSWER 49
D Abnormal loss account Abnormal loss Units 100 ___ 100 ___ $ 675 675 ___ 675 ___ Scrap P&L Units 100 ___ 100 ___ $ 175 500 ___ 675 ___

ANSWER 50
A Idle time + General overtime = (15 hours $12) + ((10 hours 4 hours) $6) = $216

LondonSAM

F2 - Management Accounting