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CIMAPRA17-BA2-1-ENG
Fundamentals of Management Accounting
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Question: 70
FL uses an absorption costing system. The overhead absorption rate for production overheads is $8.60 per direct labour hour.
Budgeted production overhead costs for the year were $473,000 and real costs incurred were $468,000. 56,000 labour hours were used.
Which ONE of the following statements is correct? A . Overheads were under-absorbed by $5,000
B . Overheads were over-absorbed by $8,600 C . Overheads were under-absorbed by $8,600 D . Overheads were over-absorbed by $13,600
Answer: D Question: 71 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:
1. 50 litres used per 100 litres of �Clear� produced
2. Budgeted monthly production is 1000 litres of �Clear�.
The closing inventory of chemical XTC for November valued at standard price was as follows: real results for the period during December were as follows:
1. 500 litres of chemical XTC was purchased for �1300.
2. 550 litres of chemical XTC was used.
3. 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)?
A . �50 adverse
B . �50 favourable C . �55 adverse
D . �55 favourable
Answer: A Question: 72 CORRECT TEXT
Refer to the Exhibit.
PJ Ltd has forecast that the relationship between total overheads and machine hours will be as follows: If the budget is to be based on 4,000 machine hours, the variable overhead absorption rate will be:
*per machine hour.
Give your answer to 2 decimal places.
Answer: 4.46
Question: 73
An overtime premium may be defined as:
A . The rate of pay at which overtime hours are paid B . A premium paid to workers with special skills
C . The additional payment made during overtime hours D . The total number of overtime hours worked
Answer: C
Question: 74
A company operates an absorption costing system. Overheads are absorbed using a pre-determined absorption rate using labour hours. In the period real labour hours were 10,600, 400 hours below budget. real 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? A . �242,000
B . �233,200
C . �245,072 D . �224,720
Answer: A Question: 75 Refer to the exhibit.
Budget information for �Crome Ltd� is as follows:
The budgeted cost allowance for the sale of 1000 units would be: A . �25,846
B . �30,000 C . �32,000 D . �48,000
Answer: B
Question: 76
Within a relevant range of output, the variable cost per unit of output will: A . Increase as output increases
B . Reduce as output increases
C . Remain constant as output increases
D . Be impossible to tell without further information
Answer: C
Question: 77
Which THREE of the following are characteristics of job costing? A . It is appropriate where homogeneous products are manufactured B . It is only appropriate in manufacturing environments
C . Costs are traced to separately identifiable cost units
D . It cannot be applied in a public sector or not for profit organization E . A separate work in progress account is maintained for each cost unit F . It is a specific order costing system
Answer: C,E,F
Question: 78
SP Limited operates an absorption costing system. It uses a predetermined overhead absorption rate based on machine hours. Budgeted factory overheads for the year were �1,080,000 but real overhead incurred was �1,046,000. Budgeted machine hours were 120,000 and real machine hours were 119,000.
Overheads for the period were. A . Under-absorbed by �25,000 B . Under-absorbed by �9,000 C . Over-absorbed by �25,000 D . Over-absorbed by �9,000
Answer: C Question: 79 CORRECT TEXT
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.
Answer: �8.03
Question: 80
In an integrated cost and financial accounting system, the accounting entries for the payment of net wages to indirect production workers would be:
A . Debit: Bank accountCredit: Wages control account
B . Debit: Work in progress control accountCredit: Bank account C . Debit: Wages control accountCredit: Bank account
D . Debit: Production overhead control accountCredit: Bank account
Answer: C

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