Test 1

F2 Management Accounting
Answers

ACCA F2 Management Accounting

1. B
2. C
3. B
4. A
5. C
6. A
7. The annual requirement is given as 3,600 kilograms. Hence D = 3,600 kilograms.
Per shift rate of production is given as 15 kg per shift and number of shifts are 480.
Therefore the rate of usage will be = 480 shifts X 15 = 7,200 kilograms.
The rate of production is 7,200 kilograms.
The holding cost is 18% of the value of the raw material = $15 X 18% = $2.7
The set up cost per order is $60.
The formula for the optimal reorder quantity is given as:

EBQ =

2C0 D
h (1D/R)

Substituting all the values in the formula we have:

EBQ =

2 X 3,600 X $60
$2.7 (13,600/7,200)

432,000
$2.7 (10.5)
432,000
1.35

= 565.68 = 566 kilograms

The optimal reorder quantity will be 566 kilograms.
8. D
9. A
10. $2838

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