CIMA BA2 Deluxe Study Guide with Online Test Engine
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NEW QUESTION 185
Which THREE of the following are included in the Global Management Accounting Principles? (Choose three.)
- A. Integrity
- B. Professional behaviour
- C. Accountability
- D. Influence
- E. Value
- F. Relevance
Answer: D,E,F
Explanation:
Reference:
https://www.cgma.org/resources/reports/globalmanagementaccountingprinciples/about-the-principles.html#?tab-
NEW QUESTION 186
The following list contains many different types of costs for a business. However, only four of them would be considered costs centres. Which four?
- A. Operations
- B. Staff
- C. Equipment
- D. Material
- E. Activity
- F. Function
- G. Tax
- H. Service location
Answer: C,E,F,H
NEW QUESTION 187
A company operates a full cost system of pricing. Production overheads are absorbed using a pre-determined absorption rate of £3.50 per machine hour. The direct production cost of product A is £15 per unit and it utilises 6 machine hours per unit. The mark-up for non-production costs is 10% of total production cost. The company wants to make a 25% return on sales revenue for all products.
The required selling price for Product A, to two decimal places, is:
Answer:
Explanation:
£52.85
NEW QUESTION 188
Which of the following would be the most appropriate cost unit for a transport delivery service?
- A. Tonne delivered
- B. Gallon
- C. Tonne - mile
- D. Gallon - tonne
Answer: C
NEW QUESTION 189
A tomato producer is investigating the correlation between the height of his plants and the size of the tomatoes. He has tallied up his height results and produced this table.
Using the information provided, find the median and modal class and correctly select these answers from the list.
- A. Median = 40<x<50
- B. Modal class = 30<x<40
- C. Median = 30<x<40
- D. Modal class = 40>x>50
Answer: B,C
NEW QUESTION 190
Overtime worked as a result of a rush order at the customers request should be classified as a:
- A. Direct expense
- B. Direct labour cost
- C. Production overhead cost
- D. Administration overhead cost
Answer: B
NEW QUESTION 191
A company operates an integrated standard cost accounting system. The standard price of raw material A is S20 per litre. At the start of period 1, the inventory of 500 litres of raw material A was valued at S20 per litre.
During period 1. 100 litres of raw material A were purchased at an actual price of S21 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?
- A. An adverse material price variance should be recorded in the statement of profit or loss for period 2.
- B. The raw material inventory at the end of period 1 should include 100 litres valued at $21 per litre.
- C. An adverse material price variance should be recorded in the statement of profit or loss for period 1.
- D. The raw material inventory at the end of period 2 should be valued at $20 per litre.
- 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.
Answer: D,E
NEW QUESTION 192
A service company provides accountancy training courses. Which THREE of the following would be classified as variable costs of the company?
- A. Depreciation of office machinery
- B. Lecturers' fees (Lecturers are paid a flat rate per day)
- C. Office rental
- D. Hire of conference rooms
- E. Course manager's salary
- F. Advertising (The company runs specific adverts for each course)
Answer: B,D,F
NEW QUESTION 193
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.)
- A. The material quantity should be flexed to 60,000 + 10% = 66,000 kg.
- B. The basic pay hours should not be flexed; they should remain at 1,000 hours.
- C. The material price should be flexed to the actual figure of $3.10 per kg.
- D. The overtime hours should be flexed to (1,000 + 10%) - 900 = 200 hours.
- E. The fixed costs should be flexed to $40,000 + 10% = $44,000.
Answer: C,D
NEW QUESTION 194
Refer to the exhibit.
A company budgeted to provide 700 units of service last period for a budgeted variable overhead cost of
$29,400. During the period a total of 790 units of service were provided and the variable overhead cost incurred was $29,660.
For effective control of variable overhead cost which two figures should be compared in the budgetary control statement?
- A. Row A
- B. Row B
- C. Row D
- D. Row C
Answer: C
NEW QUESTION 195
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?
- A. Option B
- B. Option D
- C. Option C
- D. Option A
Answer: A
NEW QUESTION 196
A company which manufactures and sells one product has fixed costs of $80,000 per period. The selling price per unit of S25 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?
- A. 8,000
- B. 36,000
- C. 9,000
- D. 32,000
Answer: A
NEW QUESTION 197
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)?
- A. £55 adverse
- B. £50 adverse
- C. £55 favourable
- D. £50 favourable
Answer: B
NEW QUESTION 198
Which one of the following statements about historical cost and economic value is correct?
- A. The concept of economic value applies only to non-current assets
- B. The economic value of an asset will depend on the alternative uses for the asset
- C. The historical cost of an asset will always be lower than its economic value
- D. The historical cost of an asset reduces as the remaining useful life of the asset reduces
Answer: B
NEW QUESTION 199
CL produces a household detergent in a single process. Information for this process for last month is as follows:
(a) Materials input - 11,000 Litres at £2.00 per litre.
(b) Conversion costs - £23,000
(c) Output during the month - 8,000 litres.
(d) There were 2,000 units of closing work in progress which was complete as to materials and 35% complete as to conversion.
(e) Normal loss for the month was 5% of input and all losses have a scrap value of 50p per litre.
(f) There is no opening work in progress.
The value of finished output during the month (to the nearest £) was:
Answer:
Explanation:
£36741
NEW QUESTION 200
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:
- A. 900 units
- B. 8,100 units
- C. 8,900 units
- D. 1,700 units
Answer: B
NEW QUESTION 201
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:
- A. 3,300 units
- B. 3,900 units
- C. 8,900 units
- D. 1,700 units
Answer: A
NEW QUESTION 202
Refer to the exhibit.
The following information relates to Job 123:
The selling price to the customer for Job 123 is:
Answer:
Explanation:
$27030
NEW QUESTION 203
Which of the following statements relating to risk and uncertainty is correct?
- A. Uncertainty exists when we know all of the possible outcomes but not their probabilities.
- 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 and their probabilities.
- D. Risk exists when we do not know all of the possible outcomes.
Answer: A
NEW QUESTION 204
Refer to the exhibit.
The following records are available for a hotel for last week.
The sales revenue in the hotel coffee shop last week was $16,750.
The sales revenue per guest night was (to the nearest $0.01):
Give your answer to 2 decimal places.
Answer:
Explanation:
$8.01
NEW QUESTION 205
Refer to the exhibit.
The following costs apply to batch 325, which consists of 10000 units of identical products:
The company charges selling and administration costs at a rate of 20% of production costs and wishes to achieve a profit margin of 20% of sales.
What is the required selling price per unit of product?
Answer:
Explanation:
Give your answer to 2 decimal places.
£14.81
NEW QUESTION 206
Which ONE of the following would be classified as an internal environmental cost?
- A. Waste disposal costs
- B. Carbon emissions
- C. Social welfare costs
- D. Health care costs
Answer: A
NEW QUESTION 207
Which of the following are NOT behavioural aspects of budgetary controls? (Select ALL that apply.)
- A. Budget negotiation
- B. Irrational spending
- C. Short term focus
- D. Competitiveness
- E. Motivation
- F. Long term focus
Answer: D,F
NEW QUESTION 208
Refer to the Exhibit.
The following details have been extracted from the receivables collection records of SBC:
The amount budgeted to be received in September from credit sales is, to the nearest £000:
Answer:
Explanation:
£257000
NEW QUESTION 209
Refer to the exhibit.
A company issued its production budget based on an anticipated output of 2000 units. The actual output for the period was 1500 units. The details of the costs are shown below:
What was the budget expenditure variance?
- A. £17,000 favourable
- B. £18,000 adverse
- C. £4,500 favourable
- D. £4,500 adverse
Answer: C
NEW QUESTION 210
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