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MAF - Revision 3

1. In the process account the value of the abnormal gain is:

a) Debit Process Account Credit Abnormal Gain account

b) Debit Process Account Credit Normal Loss Account

c) Credit Process account Debit Abnormal Gain account

d) Credit Process account Debit Normal Loss account

2. A system in which all budget holders are given the opportunity to take art in setting their own budgets is known as:

a) Participative budgeting b) The budget committee c) Zero base budgeting d)The budget manual

3. PJ Ltd has forecast that the linear relationship between total overheads and machine hours will be as follows:

Data:

Machine hours 4000 5000

Total Overheads () 46000 50500

If the budget is to be based on 4,000 machine hours, what is the variable overhead absorption rate per machine hour?

4. Niruban Ltd has forecast that the linear relationship between total overheads and machine hours will be as follows:

Machine hours 4000 5000

Total Overheads () 46000 50500

If the budget is to be based on 4,000 machine hours, what is the fixed overhead absorption rate per machine hour?

5. The indirect costs of a hospitals Radiology Department consists mainly of equipment related costs. Details of the

budget for Period 4 are:

Budget Data Period 4:

Indirect costs 240,000

Machine hours 40000

Value of machines 2,400,000

Radiologists wages 60,000

Staff hours 80,000

The most appropriate overhead absorption rate is:

a) 3 per staff hour b) 10% of machine cost

c) 400% of radiologists wages d) 6 per machine hour

6. The total cost of a product is 200.What would the selling price have to be, in order to achieve a profit margin of 20%?

7. Budgeted information for Ragulan plc is as follows

The budgeted cost for an output of 1,600 units is

Output 2000 units 4000 units 6000 units

Cost 70000 120000 170000

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8. Uma Ltd uses a standard costing system and therefore values all stocks at standard cost. During December the price

paid for material J was 6 per kg less than the standard price.

The following information for material J relates to December.

Data Quantity (kg)

Quantity purchased 300

Quantity issued 250

Standard quantity for

output

240

What was material price variance for December?

a) 1500 favourable b) 1800 favourable c) 60 favourable d) 6 favourable

9.Overhead apportionment is

a) The identification of costs specifically attributable to a particular cost centre.

b) The process of sharing costs among two or more cost centres.

c) The charging of overheads to cost units produced.

d) The identification of overhead cost variances.

10. In a manufacturing company which produces a range of products the cost of a royalty payment made to thedesigner would be a

a) Selling and distribution expenses b) Production overhead

c) Administration expense d) Direct expense

11. Each unit of Raj uses 3 kgs of material Sri

The budgeted details for December are as follows

Data Opening stock Closing stock

Product Chamara 1000 units 1200 units

Material Sri 500 kgs 600 kgs

It is estimated that the sales in December will be 5000 units.

The amount of material Sri that needs to be purchased in December is.

a) 15700 kgs b) 16100 kgs c) 15500 kgs d) 15600 kgs

12. In an integrated cost and financial accounting system the accounting entries for the payment of indirect wages to

indirect production workers would be

Dr Cr

a) Bank account wages control account

b) production overhead control account bank accountc) work in progress control account bank account

d) wages control account bank account

13. Normal loss with a scrap value in a process account should be valued at

a) On the same basis of good production

b) On the same basis of good production minus the scrap value of normal loss

c) Scrap value.

d) Nil value

14. Overtime worked as a result of an order at the request of the customer should be classified asa) Administration overhead cost b) Production overhead cost

c) Direct labour cost d) Direct expense

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15. In an integrated cost and financial accounting system the accounting entries for the purchase of raw material on

credit would be

Dr Cr

a) Creditors control account Cost of sales account

b) Creditors control account Work in progress account

c) Cost of sales account Creditors control account

d) Raw material control account Creditors control account

16. An increase in the variable cost per unit will cause the point at which the line plotted on the PV chart intersects the

horizontal axis to

a) Double b) Stay where it is c) Move to the right d) Move to the left

17. Place the following budgets in the order in they would be prepared

(a) Production

(b) Materials usage

(c) Sales

(d) Materials purchases

a) (a), (c), (d), (b) b) (c), (a), (b), (d) c) (a), (c), (b), (d) d) (c), (a), (d), (b)

18. The material price variance will be adverse when

a) The actual cost of the materials is more than the standard material cost for the output produced

b) The price of material has fallen

c) The actual cost of material purchased is more than the standard cost of material purchased.

d) The materials usage variance is favourable.

19. In an integrated cost and financial accounting system the accounting entries for PAYE deducted from gross wages

would be Dr Cr

a) Production overhead control account Bank account

b) wages control account PAYE creditor account

c) wages control account Bank account

d) PAYE creditor account Bank account

20. In process costing the term equivalent units refers to

a) The number of units produced in an equivalent time period of the previous month

b) The conversion of partly completed units into an equivalent number of completed units

c) Units of the same size and weight.

d) The number of complete units produced

21. Which of the following would have an impact on the cash budget?

(a) Change in creditors terms

(b) Change in the rate of depreciation

(c) Change in the percentage of discounts allowed

(d) Change in the stock holding policy

a) All of the above b) None of the above c) (a), (b) and (c) d) (a), (c) and (d)

22. Overtime worked as a result of an order at the request of the customer should be classified asa) Administration overhead cost b) Production overhead cost

c) Direct labour cost d) Direct expense

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