Question 1

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.)

Accepted Answer

A)   The raw material inventory at the end of period 1 should include 100 litres valued at $21 per litre.
B)   An adverse material price variance should be recorded in the statement of profit or loss for period 1.
C)   The raw material inventory at the end of period 2 should be valued at $20 per litre.
D)   An adverse material price variance should be recorded in the statement of profit or loss for period 2.
E)   The first 500 litres of raw material A issued should be debited to the Job 789 account at $20 per litre, and the remaining 50 litres at $21 per litre. D,E

Question 2

A sales manager has analysed a sample of 350 sales transactions from the latest period. The manager wishes to investigate: how many customers made their purchase online using the internet and how many purchased by telephone. how many were new customers and how many were placing repeat orders. The following table shows the results of the analysis.  If the pattern of sales occurs next period, the probability of a particular sale being a repeat order placed online is closest to:

Accepted Answer

A)   0.11
B)   0.40
C)   0.16
D)   0.35 B

Question 3

The budget and actual cost statements for the production department for the latest period were as follows.  Notes. The 10% increase in production was required to meet unexpected additional sales demand. The production manager is responsible for negotiating the price of materials with suppliers. The normal working time is 900 hours per period. Any overtime worked above these 900 hours is paid at a premium of 50%. In preparing the flexible budget for the latest period, which TWO of the following statements are correct? (Choose two.)

Accepted Answer

A)   The fixed costs should be flexed to $40,000 + 10% = $44,000.
B)   The material quantity should be flexed to 60,000 + 10% = 66,000 kg.
C)   The basic pay hours should not be flexed; they should remain at 1,000 hours.
D)   The overtime hours should be flexed to (1,000 + 10%)  - 900 = 200 hours.
E)   The material price should be flexed to the actual figure of $3.10 per kg. D,E

Question 4

Which THREE of the following are included in the Global Management Accounting Principles? (Choose three.)

Accepted Answer

A)   Accountability
B)   Influence
C)   Value
D)   Professional behaviour
E)   RelevanceF)  Integrity

Question 5

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?

Accepted Answer

A)   $54.00
B)   $50.77
C)   $47.00
D)   $44.55

Question 6

Which of the following statements relating to risk and uncertainty is correct?

Accepted Answer

A)   Risk exists when we do not know all of the possible outcomes.
B)   Risk exists when we know all of the possible outcomes but not their probabilities.
C)   Uncertainty exists when we know all of the possible outcomes but not their probabilities.
D)   Uncertainty exists when we know all of the possible outcomes and their probabilities.

Question 7

A company produces a single product for which the following cost data are available.  Analysis by the management accountant has shown that 100% of direct material cost and 50% of direct labour cost are variable costs. 50% of production overhead and 100% of selling and distribution overhead are variable costs. What is the marginal cost per unit?

Accepted Answer

A)   $6
B)   $7
C)   $8
D)   $9

Question 8

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.)

Accepted Answer

A)   A favourable labour rate variance.
B)   A favourable sales volume contribution variance.
C)   An adverse sales price variance.
D)   An adverse labour efficiency variance.
E)   An adverse material price variance.

Question 9

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?

Accepted Answer

A)   5.82%
B)   73.89%
C)   44.18%
D)   94.18%

Question 10

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?

Accepted Answer

A)   Outlet A
B)   Outlet B
C)   Outlet C
D)   Outlet D

Question 11

The following is an extract from a budgetary control report for the latest period:  The budget variance for prime cost is:

Accepted Answer

A)   $3,260 adverse
B)   $18,580 adverse
C)   $3,340 adverse
D)   $3,260 favourable

Question 12

An organisation's management report contains the following data:  Which division has the highest operating margin percentage?

Accepted Answer

A)   Division A
B)   Division B
C)   Division C
D)   Division D

Question 13

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?

Accepted Answer

A)   $21
B)   $27
C)   $35
D)   $29

Question 14

In responsibility accounting, costs and revenues are grouped according to:

Accepted Answer

A)   the budget holder.
B)   their function.
C)   the service provided.
D)   their behaviour.

Question 15

Which of the following is NOT a valid purpose of budgeting?

Accepted Answer

A)   To communicate targets to managers.
B)   To comply with financial reporting requirements.
C)   To coordinate the different activities of an organisation.
D)   To authorise managers to incur expenditure.

Question 16

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?

Accepted Answer

A)   58,5%
B)   70,9%
C)   41,5%
D)   40,0%

Question 17

A company is considering investing $57,000 in a machine that will last for five years, after which time it will have no value. The machine will generate additional revenue of $190,000 each year. Annual running costs, including depreciation of $11,400 will amount to $168,400. Assuming that all cash flows occur evenly, the payback period of the investment in the machine is closest to:

Accepted Answer

A)   2 years 8 months
B)   1 year 9 months
C)   1 year 7 months
D)   2 years 6 months

Question 18

Which THREE of the following are parts of the master budget? (Choose three.)

Accepted Answer

A)   Finished goods inventory budget.
B)   Budgeted statement of profit or loss.
C)   Cash flow budget.
D)   Sales budget.
E)   Administration overhead budget.F)  Budgeted statement of financial position.

Question 19

Which of the following is NOT a characteristic of useful operational level information?

Accepted Answer

A)   Sufficiently accurate.
B)   Focused on the decision to be made.
C)   Available immediately.
D)   Governed by financial reporting standards.

Question 20

Assume that a unit of output is the cost object. Which of the following statements is valid?

Accepted Answer

A)   Royalties paid on per unit basis are an example of an indirect expense.
B)   Materials consumed in the maintenance of machinery used to manufacture several different products are an example of a direct material cost.
C)   The salaries of supervisors who oversee the manufacture of several different products are an example of a direct labour cost.
D)   Rent paid for a factory in which several different products are produced is an example of an indirect expense.

Exam 4: BA2 - Strategic Management Question Tutorial

Which THREE of the following are included in the Global Management Accounting Principles? (Choose three.)

Which of the following statements relating to risk and uncertainty is correct?

The following data relate to the latest period. 11ec37eb_8baf_3476_97b9_6b632ba0e6a0__00 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.)

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 small airport's management accountant has prepared the following management report on the performance of its four retail outlets. 11ec37eb_8bad_fbf0_97b9_bfdbdffb20a4__00 Which retail outlet has the highest contribution per square metre?

The following is an extract from a budgetary control report for the latest period: 11ec37eb_8bae_9833_97b9_1fd3c29e0753__00 The budget variance for prime cost is:

An organisation's management report contains the following data: 11ec37eb_8baf_f7cb_97b9_859e6dd55657__00 Which division has the highest operating margin percentage?

A company uses standard absorption costing. Budgeted and actual data for the latest period are as follows. 11ec37eb_8bae_2301_97b9_89cced9f71b7__00 What was the production overhead absorption rate per unit?