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Refer to the exhibit.
C Ltd manufactures three products, which require the same type of materials. The following contribution and profit per unit is available:
In a period in which labour hours are in short supply, which of the following options is the rank order of production?
There are four global principles for management accounting which are intended to support organisations in setting a standard and improving their management accounting systems.
Which one of the following helps management determine whether a certain decision will potentially generate, preserve, or destroy value within the business?
The possible returns and associated probabilities of two independent projects are as follows:
It has been decided that both projects are to be launched.
Which TWO of the following statements are correct? (Choose two.)
Data for the latest period for a company which makes and sells a single product are as follows:
There were no budgeted or actual changes in inventories during the period.
The sales volume contribution variance for the period was:
The standard labour cost for 1 component is $15.00 (5 hours at $3 per hour). Last month, 6,000 hours were worked at a cost of $17,000 to produce 1,100 components. The labour efficiency variance was:
Refer to the exhibit.
SP, a manufacturing company, uses a standard costing system. The standard variable production overhead cost is based on the following budgeted figures for the year:
During the month of September, 5,300 actual hours were worked and 5,600 standard hours of output were produced. Total variable production overhead costs in September were $8,600.
What was the total variable production overhead variance in September?
CVP Limited manufactures a single product with a selling price of $25.60. Fixed costs are $122,880 per month and the product has a profit/volume ratio of 40%.
In a month when actual sales were $358,400, CVP ' s margin of safety in units was
Data for the latest period for a company which makes and sells a single product are as follows:
There were no budgeted or actual changes in inventories during the period.
The variable overhead expenditure variance for the period was:
Which of the following categories of costs is the most relevant for decision making?
The net present value (NPV) of an investment is as follows.
NPV at 14% = $6,320
NPV at 18% = ($4,600) negative
The internal rate of return (IRR) of the investment is closest to
Refer to the exhibit.
Data for October ' s budget for product Quest for the month of October are given below:
Each unit of Quest requires 6kg of raw materials. Strict quality control procedures are applied to the manufacturing process and normal rejection levels are 5% of finished units.
The raw materials purchases budget for the month of October is:
Apex Plc has budgeted to sell 8,000 units of A in the year. Opening inventory of A is estimated at 1,000 units and the company plans to reduce inventory levels of all products by 15%.
What will be the production budget (in units) for the year?
Refer to the Exhibit.
The following forecast cash flows relate to a proposed investment in new delivery vehicles at a total cost of $75,000.
The internal rate of return (IRR) of the proposed investment is (to two decimal places)
The production manager of your company has asked you to explain the methods of overhead analysis used, in particular the meaning of reciprocal servicing.
Reciprocal servicing is:
A small airport’s management accountant has prepared the following management report on the performance of its four retail outlets.
Which retail outlet has the highest contribution per square metre?
Refer to the exhibit.
A company is considering purchasing a machine that will have a useful life of three years after which time it will be sold. Relevant cash flows relating to the purchase and operation of the machine are as follows.
The annual cost of capital is 14%.
The net present value of the investment in the machine is, to the nearest whole $:
The decision rule to use when determining the optimal production plan if there is a scarce resource is:
Refer to the exhibit.
WS operates an integrated accounting system. Transactions relating to production overheads for the month of May were as follows:
Indirect Material costs were $15,000
Indirect Labour Costs were $45,000
Production overheads of $58,000 were incurred during the period.
Depreciation of factory machinery amounted to $32,000.
Overheads costs absorbed by production using a standard absorption rate was $164,000 for the period.
What are the correct entries to record the absorption of production overheads for the period?
The correct set of entries to record the absorption of production overheads for the period is:
A company can increase its margin of safety by which of the following independent actions?
(a) Increasing sales and production
(b) Raising the selling price per unit
(c) Raising the variable cost per unit
(d) Lowering fixed costs
Refer to the exhibit.
DS is manufacturing company that uses an integrated accounting system. The following payroll data is available for the month of August:
The Employers ' National Insurance for the period was $13,790. An analysis of the wages is as follows:
Which of the following factors affect the budgeted cash flow:
(a) Funds from the issue of share capital
(b) Bank Interest on a long term loan
(c) Depreciation on fixed assets
(d) Bad debt write off
A company operates an absorption costing system. Overheads are absorbed using a pre-determined absorption rate using labour hours. In the period actual labour hours were 10,600, 400 hours below budget. Actual overheads for the period were £234,680 and there was an under-absorption of overheads of £1,480.
What was the budgeted level of overheads?
Refer to the exhibit.
Budget information for ' Crome Ltd ' is as follows:
The budgeted cost allowance for the sale of 1000 units would be:
Based upon extensive historical evidence, a company’s daily sales volume is known to be normally distributed with a mean of 1,728 units and a standard deviation of 273 units.
What is the probability that, on any one day, the sales volume will be at least 1,300 units?
A company operates an absorption costing system. Overheads are absorbed using a pre-determined absorption rate using labour hours.
Actual labour hours were 10% below budget for the period and overheads incurred were 10% above budget for the period. This would result in:
Refer to the exhibit.
SL manufactures a single product, the cost and selling price of which are given below:
Fixed overheads per unit are based on a budgeted production volume of 25,000 units.
Budgeted sales are assumed to be 25,000 units.
If all costs increase by 5% but selling price remains the same, by how much must sales change from the budgeted volume to achieve the same budgeted profit?
The International Federation of Accountants (IFAC) stated that it was important that “accountants in business” should understand what the drivers of stakeholder value are. Which of the following statements is valid?
A company uses full cost pricing. The unit costs for product Z are given below.
What price per unit should be charged in order to achieve a profit margin of 20%?
Give your answer to the nearest cent.
The following data are available for a delivery company. The table shows the number of tonnes delivered (x) and the associated distribution cist (y) in recent periods.
Further analysis of this data has determined the following:
∑xy = 36,427∑x2 = 1,144
Using least squares regression analysis, calculate the variable cost per tonne delivered. Give your answer to the nearest cent.
The staffing policy for a supermarket is to have one cashier station open for every forecasted 20 customers per hour. Cashiers are hired by the hour as and when required, and do not perform any other duties.
The cost of the cashiers in relation to the number of customers would be classified as which type of cost?
A management accountant has forecast the following cash inflows from four potential projects.
All four projects require the same initial investment and will last for four years. They all result in a positive net present value but only one of the projects can be undertaken.
Which project should be selected?
A company that uses standard costing wishes to reconcile the difference between the profit for a period calculated using absorption costing with that calculated using marginal costing.
Which TWO of the following will NOT help with this reconciliation? (Choose two.)
A company has three production departments X, Y and Z, and one service department.
The service department’s overhead has been apportioned to the production departments in the ratio 3:2:5. As a result of this apportionment, $2,070 was given to Department Y.
What is the amount of service department overhead that would have been apportioned to Department Z? Give your answer to the nearest dollar.
A company uses an integrated accounting system. The following data relate to the latest period.
At the end of the period, the entry in the production overhead control account in respect of under or over absorbed overheads will be:
A company which manufactures and sells one product has fixed costs of $80,000 per period. The selling price per unit of $25 generates a contribution/sales ratio of 40%.
How many units would need to be sold in a period to earn a profit of $10,000?
According to CIMA’s Code of Ethics, CIMA members should not allow bias, conflict of interest of the influence of other people to override their professional judgement.
This is an example of:
A project is about to be launched. Two of the three possible outcomes and their associated probabilities are as follows:
The remaining possible outcome is a $70,000 gain.
What is the correct calculation of the expected value of the project?
A confectionery manufacturer is considering adding a new product to the current range. Forecast data for the product are as follows.
Incremental fixed costs attributable to the new product are forecast to be $24,000 each period.
The forecast sales volume of 180 units is insufficient to achieve the target profit of $10,000 each period.
Which of the following statements is correct?
Assume that a unit of output is the cost object. Which of the following statements is valid?
The following data relate to the latest period.
A statement is to be prepared that reconciles the difference between the flexible budget profit and the actual profit.
Which TWO of the following will appear on this statement? (Choose two.)
A company’s management accountant wishes to calculate the present value of the cost of renting a delivery vehicle. There will be five annual rental payments of $5,000, the first of which is due immediately. The company’s discount rate is 12%.
Which TWO of the following are valid ways to calculate the present value of the rental payments? (Choose two.)
A new product requires an investment of $200,000 in machinery and working capital. The total sales volume over the product’s life will be 5,000 units. The forecast costs per unit throughout the product’s life are as follows:
The product is required to earn a return on investment of 35%.
What unit selling price needs to be achieved?
Which of the following would NOT be an appropriate performance measure for a profit centre manager?
A company uses standard absorption costing. Budgeted and actual data for the latest period are as follows.
What was the production overhead absorption rate per unit?
Refer to the exhibit.
The following data relates to two activity levels of a department. Overhead absorption is on the basis of machine hours.
The variable overhead rate per hour is £4.50. The amount of fixed overhead, to the nearest £000, is:
A company operates an integrated standard cost accounting system. The standard price of raw material A is $20 per litre. At the start of period 1, the inventory of 500 litres of raw material A was valued at $20 per litre. During period 1, 100 litres of raw material A were purchased at an actual price of $21 per litre. During period 2, 550 litres of raw material A were issued to Job 789.
In respect of the above events, which TWO of the following statements are correct? (Choose two.)
Refer to the exhibit.
In an integrated cost and financial accounting system, the accounting entries for factory overhead absorbed would be:
The following data are available for a company that produces and sells a single product.
The company’s opening finished goods inventory was 2,500 units.
The fixed overhead absorption rate is $8.00 per unit.
The profit calculated using marginal costing is $16,000.
The profit calculated using absorption costing and valuing its inventory at standard cost is $22,400.
The company’s closing finished goods inventory is:
The year-to-date results at the end of month 9 included sales revenue of $3,600,000 and variable costs of $2,100,000.
During month 10, sales revenue was $450,000 and variable costs were $270,000.
What year-to-date contribution to sales ratio (C/S ratio) would be reported at the end of month 10?
The records of a manufacturing company show the following relationship between total cost and output.
The budgeted output for Period 3 is 27,000 units. Assume that previous cost behaviour patterns will continue.
What is the total budgeted cost for Period 3?
Give your answer in the nearest whole number.
The forecast costs per unit for a new product are as follows:
The company uses marginal cost plus pricing and all products are required to achieve a 40% margin.
What would be the selling price per unit?
A company is appraising two projects. Both projects are for five years. Details of the two projects are as follows.
Based on the above information, which of the following statements is correct?
In the process account, the accounting treatment of the value of the abnormal gain is:
A company manufactures three products using the same direct labour which will be in short supply next month. No inventories are held. Data for the three products are as follows:
The fixed costs are all committed costs and cannot now be altered for the next month.
Place the labels against the correct product to indicate the order of priority for manufacture that will maximise the profit for the next month.
An organisation produces and sells a single product. The organisation’s management accountant has reported the following information for the most recent period.
Which TWO of the following statements are valid? (Choose two.)
Which THREE of the following are included in the Global Management Accounting Principles? (Choose three.)
Refer to the exhibit.
A machine costing $47,000 will generate the following accounting profits:
The annual charge for depreciation is $9,000.
The cost of capital is 12%.
The net present value of the investment in the machine is:
Refer to the exhibit.
BBB has drawn up the following flexed budgets for the year:
What would be the total budgeted costs at the 80% level of activity?
Refer to the exhibit.
The following conventional breakeven chart has been drawn for a product. Forecast sales volume for next period is V units.
Which ONE of the following distances on the graph indicates the forecast profit for next period?
Feedforward control systems differ from feedback systems in that they _____________________.
In a manufacturing company which produces a range of products, the cost of factory rent and rates would be classified as A.
A product has a break-even point of 40,000 units and a margin of safety of 20%. The contribution per unit is £3.
What is the budgeted profit?
Which of the following are not examples of intangible and nonfinancial factors in decision making? (Select ALL that apply.)
Refer to the exhibit.
A project is forecast to generate the following cash flows.
Using three decimal places in all discount factors, the net present value (NPV) for the project at a cost of capital of 14.5% is (to the nearest $)
Refer to the exhibit.
Xell Ltd uses a standard costing system and therefore values all inventory at standard cost. During period 3 the price paid for material ' A ' was £6 per kg less than the standard price.
The following information for material ' A ' relates to period 3:
What was the material price variance for period 3?
Refer to the Exhibit.
Fabex Ltd manufactures a household detergent called " Clear " . The standard data for one of the chemicals used in production (chemical XTC) is as follows:
(a) 50 litres used per 100 litres of ' Clear ' produced
(b) Budgeted monthly production is 1000 litres of ' Clear ' .
The closing inventory of chemical XTC for November valued at standard price was as follows:
Actual results for the period during December were as follows:
(a) 500 litres of chemical XTC was purchased for £1300.
(b) 550 litres of chemical XTC was used.
(c) 900 litres of ' Clear ' was produced.
It is company policy to extract the material price variance at the time of purchase.
What is the total direct material price variance (to the nearest whole number)?
In the process account, the accounting treatment of the value of the abnormal loss is:
A company uses an integrated accounting system and absorbs production overhead using a predetermined rate of $6 per machine hour.
Last period a total of 25,500 machine hours were worked and the actual production overhead incurred was $158,000.
The accounting entries for the absorption of production overhead for the period would be:
Refer to the exhibit.
The following data are available for last period for the x-ray department of a local hospital:
The x-ray department cost per patient for last period was (to the nearest $0.01) is:
Refer to the exhibit.
The wages analysis for the welding department of a manufacturing company is given below:
What is the direct labor cost for the welding department?
A product sells for £10 per unit and has an annual break-even volume of 50,000 units. The annual fixed costs are £100,000.
The variable cost per unit is:
Give your answer to 2 decimal places.
Refer to the Exhibit.
A company operates an absorption costing system. The management accounts show that fixed production overheads were over-absorbed in the period.
Which FOUR combinations could possibly have resulted in this situation?
It is company policy that the closing inventory of finished goods must be equal to 10% of the following month ' s budgeted sales. The budget sales for November and December are 8,000 and 9,000 units respectively.
The budgeted production for November will be:
Refer to the exhibit.
Patchit Limited operates a job costing system. They have been asked to quote for a rush job that will require to be done in overtime hours. It is estimated that the job will incur the following costs:
Production overheads are absorbed on a direct labour hour basis. Budgeted direct labour hours for the year were 50,000 and budgeted direct labour cost was $300,000.
If production overheads had been based on a percentage of direct labour cost, the revised production costs for the job would be:
Refer to the exhibit.
The following information relates to Job 123:
The selling price to the customer for Job 123 is:
If the fixed costs are increased, the point at which the line plotted on a profit/volume (PV) graph cuts the horizontal axis will:
Refer to the exhibit.
The budgetary control report for the latest period shows the following. Variances in brackets are adverse.
Which THREE of the following statements can definitely be inferred from this control report?
Refer to the exhibit.
X Enterprises runs a private nursing home for the elderly. The company are concerned that bed occupancy rates have been falling over the past 2 years with a consequential effect on profit. They have drawn up a budget for next year as follows:
The nursing home currently charges $90 per patient day.
Based on the budgeted figures and the current charge per day, what would be the break-even point in patient days?
Refer to the exhibit.
The profit/volume graph below has been prepared for a product for which the following data are available for a period:
Selling price - $28 per unit
Variable cost - $23 per unit
Fixed cost - $4 per unit
Forecast sales volume is 1,000 units each period.
The value of P in units is:
Refer to the exhibit.
A company issued its production budget based on an anticipated output of 800 units. Actual output was 1000 units. The details of the costs are shown below:
The budget volume variance was:
Refer to the exhibit.
The standard labour cost per unit of product ' B ' is $24 (6 hours @ $4 per hour).
During period 5 the following details were recorded:
The output during period 5 was
Refer to the exhibit.
The standard variable cost per unit of Product W is $26. The budgeted sales of Product W in April was 3,300 units. The company recorded the following variances for the month of April:
During April 3,600 units of Product W were actually sold.
The budgeted contribution for Product W in April was to the nearest $000:
Refer to the exhibit.
A company manufactures and sells a single product which has the following cost and selling price structure:
The fixed overhead absorption rate was based on normal capacity of 1800 units per month.
The budgeted break-even point in sales units per month is units.
The company Andrew works for currently uses traditional absorption costing. He needs to convince his manager that the company should be using activity based costing instead.
Andrew has compiled this list of advantages:
(1)ABC will allow us to make better pricing decisions
(2)ABC will give us tighter control over costs as we will be able to pinpoint inefficiencies
(3)ABC will help improve our product mix by highlighting the best combination of materials
(4)ABC is suitable for our business as we only produce one product
Which statement or statements are INCORRECT?
Refer to the exhibit.
ZAP publishes a monthly magazine aimed at the teenage market. It has drawn up a budget for next year as follows:
What selling price would be required for ZAP to break even?
How does Beyond budgeting help to resolve the weaknesses of traditional budgeting? (Select ALL that apply.)
A chemical process has a normal wastage of 8% of input. For the month of June, 5,000 liters of materials were input and there was an abnormal gain of 200 liters.
The quantity of good production achieved was
Refer to the exhibit.
In this profit/volume graph, which distance indicates the contribution earned at level of activity L?
Distance a
Distance b
Distance c
Distance d
The correlation coefficient is calculated using which of the following values;
Refer to the exhibit.
A company currently manufactures a component which has the following costs per unit:
If the fixed overhead costs are unavoidable costs, what is the maximum price the company should be willing to pay to buy-in the component?
Give your answer to 2 decimal places.
Refer to the exhibit.
The Solo Company makes only one type of product. The budgeted profit statement for the next year, when output is budgeted to be 50,000 units is:
The margin of safety is:
Refer to the exhibit.
The following budget details are available for Superkite Limited which manufacture a single product:
The raw materials purchases budget is
A company achieves a profit/volume ratio of 25%. Sales for the month of July were £127,280 and fixed costs were £24,872.
What was the profit for the month?
A company budgeted £100,000 for labour.
However, feedback indicates that due to the need for overtime, the actual figure is more likely to be £120,000.
What type of feedback is this an example of?
Select the correct answer from the choices below:
Refer to the exhibit.
The following budgetary information is available for a manufacturing company:
A particular cost unit takes 4 machine hours in the machining department and 3 labour hours in each of the assembly and finishing departments.
The overhead cost absorbed per unit is:
Give your answer to 2 decimal places.
Which one of the following is NOT one of the main roles of the management accountant?
Refer to the exhibit.
The following details were recorded for product ' Moe ' for period 2:
What was the direct labor efficiency variance?
TESTED 02 May 2026
