Upcoming SlideShare
×

# Acca f2

4,809 views

Published on

1 Comment
2 Likes
Statistics
Notes
• Full Name
Comment goes here.

Are you sure you want to Yes No
• What year of issue is that material?

Are you sure you want to  Yes  No
Views
Total views
4,809
On SlideShare
0
From Embeds
0
Number of Embeds
6
Actions
Shares
0
333
1
Likes
2
Embeds 0
No embeds

No notes for slide

### Acca f2

1. 1. ACCAPaper F2Management AccountingOn-line Final Mock Examination Question Paper Time allowed 2 hours All questions are compulsory and MUST be attemptedInstructions:Please attempt this exam under test conditions and attach the frontsheet complete with your name and addressto your script. The completed package should be sent to BPP Marking Department.Take a few moments to review the notes on the inside of this page titled, ‘Get into good exam habits now!’ beforeattempting this exam.DO NOT OPEN THIS PAPER UNTIL YOU ARE READY TO START UNDEREXAMINATION CONDITIONSACF2FM10(J)
3. 3. All FIFTY questions are compulsory1 Shark makes and sells a single product which has a selling price of \$52, prime costs of \$20, and overheads (all fixed) absorbed at 50% of prime cost. Given fixed overheads are \$100,000 what is the breakeven point (to the nearest whole unit)? A 1,923 B 3,125 C 4,545 D 6,250 (2 marks)2 When total purchases of raw material exceed 10,000 units in any one period then all units purchased, including the initial 10,000 are invoiced at a lower cost per unit. Which of the following graphs is consistent with the behaviour of the total materials cost in a period? \$ A \$ B UNITS UNITS 0 10,000 0 10,000 \$ C \$ D UNITS UNITS 0 10,000 0 10,000 (2 marks) 3
4. 4. 3 Jumbo Ltd is a manufacturing company with two production departments (A and B), a stores department and a maintenance department. Budgeted production overhead costs and other relevant information are set out below. Dept A Dept B Stores Maintenance Building establishment costs Budgeted allocated costs \$47,000 \$55,000 \$72,000 \$92,000 \$144,000 Floor area (M2) 10,000 8,000 3,000 3,000 – Budgeted machine hours 48,000 32,000 – – – Budgeted number of material requisitions 200 300 – 100 – An absorption costing system is used. General building establishment costs are apportioned between all departments on a floor area basis. Stores and maintenance costs are apportioned on a suitable basis between the departments using stores and maintenance services. What are the total budgeted production overhead costs for department A? A \$209,000 B \$211,000 C \$212,000 D \$227,000 (2 marks)4 The following data relates to the overhead expenditure of a cleaner at two activity levels: when 12,750m2 are cleaned, the overheads incurred are \$73,950 and when 15,100m2 is cleaned, the overheads incurred are \$83,585. What is the best estimate of the overheads if 16,200m2 are to be cleaned? A \$88,095 B \$89,674 C \$93,960 D \$98,095 (2 marks)5 In a period, opening inventories were 10,000 units and closing inventories 11,000 units. Profits, based on marginal costing, were \$100,000 and profit under absorption costing was \$105,000. The fixed overhead absorption rate per unit is A \$0.50 B \$5.00 C \$4.50 D \$5,0006 Blur plc sells a single product called Smudge. In the upcoming month, it is budgeted that Smudge will generate a total revenue of \$600,000, with a contribution of \$250,000. Fixed costs are budgeted at \$200,000 for the month ahead. What is the margin of safety? A 5% B 10% C 15% D 20% (2 marks)7 The following assertions relate to financial accounting and to cost accounting. (i) Cost accounting information is always expressed in monetary terms. (ii) Financial accounting information is primarily an historical record of past operations. Which of the following statements are true? A Assertions (i) and (ii) are both correct B Only assertion (i) is correct C Only assertion (ii) is correct (1 mark) 4
5. 5. 8 Batfink produces four products W, I, N and G which have the following costs per unit: W I N G \$ \$ \$ \$ Direct materials (@ \$1/kg) 1.50 1.00 1.25 2.00 Direct labour (@ \$1.20/hr) 1.20 1.20 1.80 1.80 Overheads (@ \$0.60/hr) 1.20 0.60 0.90 0.90 Total cost 3.90 2.80 3.95 4.70 Contribution/unit 1.00 1.50 1.20 2.00 Maximum demand per month (units) 6,000 4,000 3,000 5,000 Available resources are 20,500 labour hours and 30,000kg of materials. What is the optimal production plan for Batfink, given that the directors wish to maximise contribution? W units I units N units G units A 6,000 4,000 3,000 5,000 B 4,500 4,000 3,000 5,000 C 6,000 4,000 3,000 3,000 D 6,000 4,000 2,000 5,000 (2 marks)9 Which of the following statements is correct with respect to the material price variance calculation? When material inventories are valued at standard cost, the material price variance is calculated by comparing the: A Actual quantity purchased at actual cost with actual quantity used at standard cost B Actual quantity purchased at actual cost with actual quantity purchased at standard cost C Actual quantity used at actual cost with actual quantity used at actual cost D Actual quantity purchased at standard cost with actual quantity used at standard cost (2 marks)10 The manager of an investment centre might be responsible for any of the following items. (i) Costs incurred. (ii) Revenue earned. (iii) Investment in the centres non-current assts and working capital. For which of the above items is an investment centre manager likely to be responsible? A (ii) and (iii) only B (iii) only C (i), (ii) and (iii) (1 mark)The data below relates to questions 11 and 12 X Ltd uses a standard absorption costing system. The budget for the coming period was as follows: Production and sales 100,000 units \$ Direct materials (2kg @ £3/kg) 600,000 Direct labour (1hr @ \$4/hr) 400,000 Actual results were as follows: Production and sales 110,000 units \$ Direct materials (210,000 kg purchased and used) 630,000 Direct labour (95,000 hrs) 399,000 5
6. 6. 11 What is the materials price variance? A \$30,000 A B \$Nil C \$30,000 F D \$20,000 A (2 marks)12 What is the labour efficiency variance? A \$15,000 F B \$60,000 A C \$60,000 F D \$1,000 F (2 marks)13 Hakkinen Limited wishes to minimise its inventory costs. At present its reorder quantity is 10,000 units. Order costs are \$10 per order and holding costs are \$0.01 per unit per month. Hakkinen Limited estimates annual demand to be 150,000 units. What is the optimal reorder quantity? A 4,681 units B 4,800 units C 5,000 units D 5,477 units (2 marks)14 A company absorbs overheads on the basis of machine hours, which were budgeted at 11,250 with budgeted overheads of \$258,750. Actual results were 10,980 hours with overheads of \$254,692. Overheads were A under-absorbed by \$2,152 B over-absorbed by \$4,058 C under-absorbed by \$4,058 D over-absorbed by \$2,152 (2 marks)15 How would an abnormal gain be accounted for in the process account? A An abnormal gain would be valued at scrap value and debited from the process account B An abnormal gain would be valued in the same way as good output and debited from the process account C An abnormal gain would be valued in the same way as good output and credited to the process account D An abnormal gain would be valued at scrap value and credited to the process account (2 marks)The following information relates to questions 16 and 17 \$Materials 12Labour 30Variable production overhead 13Distribution cost 5Total variable cost 60Selling price 100Contribution per unit 40 \$Factory cost 100,000Administration costs 50,000Total fixed costs each period 150,000 6
7. 7. 16 What is the sales revenue that would yield a profit of \$30,000? A \$75,000 B \$180,000 C \$375,000 D \$450,000 (2 marks)17 If budgeted sales are 5,000 units for the period, what is the margin of safety? A 25% B 33% C 70% D 75% (2 marks)18 Cox Lespair Ltd is a specialised component manufacturer working below full capacity. Its chief executive, Rowan Attstroke, would like to fill up capacity by taking on extra work at low prices. A potential customer has offered to buy 1,000 units of component FGH. Each unit of FGH requires two units of Material M111 and five units of Material M222. Units Original Current Disposal value in purchase price replacement per inventory per unit price per unit unit Material \$ \$ \$ M111 1,500 3.00 3.50 2.40 M222 4,000 2.00 2.50 1.80 Notes: 1 Materials M111 is in continuous use by the company. 2 Material M222 is no longer used by the company, and existing inventories are now surplus to requirements. For Rowan Attstroke to calculate a minimum price for the customers order, what would be the relevant cost of the materials? A \$15,700 B \$16,700 C \$17,500 D \$19,500 (2 marks)19 The following terms relate to computers: (i) application packages (ii) operating systems (iii) point-of-sale devices Which of these terms are categorised as software? A (i) and (ii) only B (i) and (iii) only C (i), (ii) and (iii) (1 mark) 7
8. 8. 20 Each unit of product H requires 9 kg of raw material. The production budget for next period is as follows. Opening inventories: Raw materials 5,700 kg Finished units of H 7,880 units Budgeted sales of product H 61,000 units Closing inventories: Raw materials 5,900 kg Finished units of H 7,400 units What is the budgeted raw material purchases for next period? A 544,680 kg B 544,880 kg C 549,200 kg D 553,120 kg (2 marks)21 A company operates a standard costing system. Which of the following would help to explain an adverse material usage variance? (i) Activity levels were higher than budgeted therefore more material was used. (ii) Lower grade employees were used, who processed the materials less efficiently. (iii) The material purchased was of a lower quality than standard. A All of them B (i) and (ii) only C (i) and (iii) only D (ii) and (iii) only (2 marks)22 The following breakeven chart has been drawn showing lines for total cost (TC), total variable cost (TVC), total fixed cost (TFC) and total sales revenue (TSR). \$ 900 TSR 800 TC 600 TVC 400 200 TFC 1 Units X What is the contribution at level of activity x units? A \$300 B \$500 C \$700 D \$900 (2 marks) 8
9. 9. 23 The following statements refer to organisations using job costing. (i) All costs incurred are averaged over the jobs completed in the period. (ii) Each job is separately identifiable from all others. (iii) Work is usually carried out on the customers premises. Which two of these statements are incorrect? A (i) and (ii) B (i) and (iii) C (ii) and (iii) (1 mark)24 Regression analysis has been used to derive the equation y = 760 + 16x, where x is the month number and y is the sales volume in the month. June year 7 is represented by x = 14. What is the forecast sales volume for April year 8? A 920 units B 984 units C 1,128 units D 1,144 units (2 marks)25 Which of the following best describes a fixed budget? A A budget which has been fixed in accordance with the actual level of activity achieved in the period. B A budget for fixed costs only. C A budget for a single level of activity. D A budget which is fixed without considering the principal budget factor. (2 marks)26 The following standard cost and selling price data relate to product T. \$ per unit \$ per unit Selling price 40 Direct material and labour 27 Overhead cost 3 30 Profit 10 Budgeted sales volume of product T for the latest period was 140 units. The actual sales volume of 175 units generated a sales revenue of \$6,650. What were the sales price and sales volume profit variances for the period? Sales price Sales volume profit variance variance A \$350 adverse \$350 favourable B \$350 adverse \$1,400 favourable C \$1,050 favourable \$350 favourable D \$1,050 favourable \$1,400 favourable (2 marks)27 A company operates five vehicles to deliver goods to its customers. Which of the following classifications is most likely to be used to classify the vehicle depreciation cost? A Production overhead B Administration overhead C Selling overhead D Distribution overhead (2 marks) 9
10. 10. 28 The following information is available for a chemical manufacturing process last period. Cost element Equivalent Opening work- Costs incurred litres in-progress during period \$ \$ Materials 39,600 59,400 118,800 Conversion cost 23,700 9,480 59,250 The weighted average method is used to value work-in-progress. What was the total value of the 34,800 litres transferred to finished goods during the period? A \$100,920 B \$156,600 C \$191,400 D \$257,520 (2 marks)29 The following statement refers to a quality of good information. Information provided to mangers should always be completely accurate. Is this statement true or false? A True B False (1 mark)30 The correlation coefficient between a companys advertising expenditure and its sales volume is 0.9. Which of the following statements is correct? A 81% of the variations in sales volume can be explained by variations in advertising expenditure. B Sales volume will increase by 81% of any increase in advertising expenditure. C 90% of the variations in sales volume can be explained by variations in advertising expenditure. D Sales volume will increase by 90% of any increase in advertising expenditure. (2 marks)31 The following statements relate to budgeting: Statement (1): One of the objectives of budgeting is to increase sales. Statement (2): The sales budget must be prepared first in the budgetary planning process. Which of the following is true? A Only statement (1) is correct B Only statement (2) is correct C Neither statement (1) nor statement (2) is correct (1 mark)32 The number of units held in a companys finished goods inventory reduced during the latest period. When comparing the information reported under a marginal costing system with the information reported under an absorption costing system, which of the following statements is correct? A Absorption costing profits will be lower and closing inventory valuations will be lower than those reported under marginal costing. B Absorption costing profits will be higher and closing inventory valuations will be lower than those reported under marginal costing. C Absorption costing profits will be lower and closing inventory valuations will be higher than those reported under marginal costing. D Absorption costing profits will be higher and closing inventory valuations will be higher than those reported under marginal costing. (2 marks) 10
11. 11. 33 A company is tendering for a one-year contract for which the staff costs have been analysed as follows. \$ Salaries already incurred on feasibility study 14,000 Two full-time employees × \$60,000 each 120,000 Supervisor salary allocation (20% × \$80,000) 16,000 Total salary cost 150,000 The supervisor is employed full-time overseeing a number of contracts. It is estimated that 20% of the supervisors time would be spent overseeing this contract. The two full-time employees are already employed in the organisation. If the contract is not undertaken the employees would be made redundant at a cost of \$30,000 in total. What is the total relevant staff cost of this contract? A \$90,000 B \$104,000 C \$106,000 D \$150,000 (2 marks)34 A company manufactures a single product and operates a standard absorption costing system. The following data relate to the latest period. Budget Actual Units produced 2,080 2,470 Hours worked 9,360 12,350 The standard fixed production overhead absorption rate is \$9 per unit. What was the fixed production overhead volume variance for the period? A \$2,470 adverse B \$3,510 adverse C \$3,510 favourable D \$5,980 favourable (2 marks)35 With a semi-variable cost, the total cost per unit increases as the level of activity increase. Is the statement true or false? A True B False (1 mark)36 Product T incurs a variable cost of \$18 per unit. Estimates of the selling price and sales demand for next period are shown below. The sales demand does not depend on the selling price, which is dictated by the market. Demand Selling price Probability Units Probability \$ per unit 0.4 9,600 0.8 47 0.4 9,400 0.2 43 0.2 6,600 Fixed costs for the period will be \$123,000. What is the expected profit for next period? A \$128,544 B \$152,500 C \$251,544 D \$289,104 (2 marks) 11
12. 12. 37 Which of the following is a correct description of a by-product? A A product produced from a process at the same time as other products which is not saleable when it emerges from the process. B A product produced from a process at the same time as other products which has an insignificant volume compared to the main product. C A product produced from a process at the same time as other products which has an insignificant sales value compared to the main product. D A product produced from a process at the same time as other products which has no value. (2 marks)38 In the profit-volume chart below, measures P and Q relate to activity level x. \$ P Level of activity x Q What is the contribution at activity level x? A Distance P B Distance Q C Distance P + distance Q D Distance P – distance Q (2 marks)39 A fixed cost will always be an indirect cost. Is this statement true or false? A True B False (1 mark)40 Jane is paid \$15 per hour for a basic working day of eight hours. She is also paid a bonus of 50% of the time saved against the standard time allowance for work completed during the day. Jane produced the following output on Monday. Product L Product M Output 270 units 180 units Standard time allowed per unit 2 minutes 1 minute What is Janes total pay for Monday? A \$30 B \$120 C \$150 D \$180 (2 marks) 12
13. 13. 41 The following statements refer to spreadsheets. (i) A spreadsheet can be used to produce a cash-flow forecast. (ii) A spreadsheet is not particularly useful as a planning tool when there are likely to be major changes in the forecast variables. (iii) A spreadsheet presentation will make management reports more accurate. Which of these statements is/are correct? A (i) only B (iii) only C (i) and ii) only D (i) and (iii) only (2 marks)42 A company manufactures and sells two products, X and Y, which earn contributions per unit of \$7 and \$19 respectively. Fixed costs are not affected by the mix of production and sales and the company aims to maximise profit. The products are made in two processes, 1 and 2. The number of machine hours in each process is limited to 1,000 hours each period. The time required by each of the products in the processes is as follows. Machine hours Process 1 Process 2 Product X 2 4 Product Y 4 2 The following graph has been drawn to show all the constraints facing the company. Product Y units 500 250 Line P 0 Product X units 200 250 500 The following statements refer to this situation. (i) There is unlimited demand for product X each period. (ii) Line P represents the Process 1 hours constraint. (iii) The objective is to maximise 7X + 19Y. Which of these statements are correct? A (i) and (ii) only B (i) and (iii) only C (ii) and (iii) only D (i), (ii) and (iii) (2 marks) 13
14. 14. 43 A product is manufactured in two consecutive processes, details of which for the latest period are as follows. Process 1 Process 2 \$ \$ Opening work-in-progress 3,290 2,140 Materials added 10,000 17,000 Conversion costs 8,350 19,700 Closing work-in-progress 9,080 2,620 What was the value of the output from process 2 to finished goods stores during the period? A \$36,220 B \$36,700 C \$38,840 D \$48,780 (2 marks)44 Which of the following is most likely to operate a system of job costing? A A hotel B A passenger transport company C A firm of surveyors (1 mark)45 Two products, F and G, are manufactured in a common process, during which a by-product P is also produced. The by-product requires further processing to put it into a saleable state. No work-in-progress is held in any process. The following data is available for the latest period. \$ Total joint production costs 596,000 Further processing costs of by-product P 4,600 Product Production Find selling price units \$ per unit F 18,300 21 G 31,030 35 P 6,230 2 Joint production costs are apportioned using the sales value method. The net realisable value of the by- product is deducted from the joint production costs. What was the cost of the output of production F for the period? A \$152,518 B \$153,720 C \$155,774 D \$434,420 (2 marks)46 Which of the following should be classified as a direct labour cost? A The cost of the overtime premium paid to direct workers due to an exceptionally high workload. B The cost of overtime paid to indirect workers due to an exceptionally high workload. C The total cost of overtime paid to direct workers to complete a specific order at a customers request. D None of the above. (2 marks) 14
16. 16. MULTIPLE CHOICE ANSWER SHEET FOR MOCK EXAMINATION –Please detach and return with your scriptREQUIREMENT: Place a line through the letter (A, B, C or D) that gives the correct answer to each sub-question.If you wish to change your mind about an answer, cross out your first attempt and then place a line throughanother letter. If you do not indicate clearly your final choice, or if you line more than one letter, no mark will beawarded for the sub-question concerned.Name: .......................................................................... Exam date: .............................................................Company: ..................................................................1 A B C D 26 A B C D2 A B C D 27 A B C D3 A B C D 28 A B C D4 A B C D 29 A B C D5 A B C D 30 A B C D6 A B C D 31 A B C D7 A B C D 32 A B C D8 A B C D 33 A B C D9 A B C D 34 A B C D10 A B C D 35 A B C D11 A B C D 36 A B C D12 A B C D 37 A B C D13 A B C D 38 A B C C14 A B C D 39 A B C D15 A B C D 40 A B C D16 A B C D 41 A B C D17 A B C D 42 A B C D18 A B C D 43 A B C D19 A B C D 44 A B C D20 A B C D 45 A B C D21 A B C D 46 A B C D22 A B C D 47 A B C D23 A B C D 48 A B C D24 A B C D 49 A B C D25 A B C D 50 A B C D 16