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Chartered University College MA-2 Managing Cost & finance

EXAMINER: EPD (CLASS TEST: 1) (CHAPTER 1-3) TIME ALLOWED: 45 mins TOTAL MARKS: 50 ---------------------------------------------------------------------------------------------------------------------------STUDENT NAME STUDENT SIGNATURE .. MARKS GAIN (%) STATUS

STUDENT ID -......................................

1 Which of the following is data? A budgeted Labour hours B Labour turnover by department C Employees timesheets D Days sick leave by type of employee 2 All of the following are cost units except: A a guestnight in an hotel B the assembly department in a car factory C a batch of cakes in a bakery D a litre of paint in a paint factory 3 Which of the following statements is NOT correct? A Cost accounts should be timely B Cost accounts can assist in providing estimates for the future C Cost accounts must comply with accounting standards D Cost accounts can assist with budgeting 4 In a cost accounting system what would be the correct entries to record the absorption of factory overheads? Debit Credit A Work-in-progress a/c Factory overheads a/c B Factory overheads a/c Work-in-progress a/c C Cost of sales a/c Factory overheads a/c D Factory overheads a/c Cost of sales a/c 5 Cost centres are: A units of product or service for which costs are ascertained B amounts of expenditure attributable to various activities C functions or locations for which costs are ascertained and related to cost units D a section of an organisation for which budgets are prepared and control exercised

6 _______________ Accounts Are Prepared For Legal Requirements 7 Which of the following is most likely to be classified as a direct cost? A factory rent B supervisor costs C depreciation D material 8. What is DOS __________________________________ 9 The total cost of a production department was as follows: January February March Units of output 525 530 570 Cost $1,406.25 $1,412.50 $1,462.50 The costs can be analyzed as: A Variable cost per unit of $1.35, fixed costs of $697.50 B Variable cost per unit of $6.25, fixed costs of $1,400 C Variable cost per unit of $1.15, fixed costs of $802.50 D Variable cost per unit of $1.25, fixed costs of $750 10 A company is preparing a budget for the distribution department for the next year. For the previous two years the following is known: 20X2 20X3 No. of vehicles 12 15 Total cost $19,800 $23,625

Total costs for 20X4, for 18 vehicles, is forecast to be: A $22,950 B $25,750 C $27,450 D $28,350 11 The table shows the total of Cost Y at different production levels of Product X: Units of Product X 50 100 150 200 250 Total Cost Y ($000) 60 60 60 90 90

What could have been the cause of the increase in cost? A Increased fuel and maintenance costs for delivery vehicles B Increased storage requirements

C Loss of discounts on raw materials D Pay increase for direct Labour. 12 Which of the following describes a cost unit? A cost per unit of output B direct costs C unit of product D production department 13 The following classifications may be applied to costs: (i) direct (ii) fixed (iii) period (iv) production Which of the above classifications could be applied to the cost of raw materials used by a company in the manufacture of its range of products? A (i) only B (i) and (iv) only C (ii) and (iii) only D (ii), (iii) and (iv) only 14.A production worker is paid a salary of $650 per month, plus an extra $0.05 for each unit produced during the month. The Labour cost is best described as: A a variable cost B a fixed cost C a step cost D a semi-variable cost 15. What is the purpose of management information? A Planning only B Planning and control only C Planning, control and decision-making only D Planning, control, decision-making and research and development 16. Management Accounting Information Is, In General, suitable for ____________________________________

17. A ___________________________ Centre Is A Department Or Organizational Function Whose Performance Is The Direct Responsibility Of A Specific Manager. 18. Which of the following describes the control process?

A. The action of monitoring something to keep it on course B. The choice between alternatives C .The development of strategies to achieve objectives D. The establishment of a plan for a future period 19. Tan Products Ltd makes one highly desirable fashion item, the Croissant handbag. The following cost information is available. $ Per handbag Direct materials 100 Direct labour 75 Direct expenses 40 Workroom expenses fixed 10 Workroom expenses variable 15 Administration costs fixed 20 Administration costs variable 30 290 What is the marginal production cost for each handbag? A $260 B $230 C $240 D $250 20. Reginald is the manager of production department M in a factory which has ten other production departments. He receives monthly information that compares planned and actual expenditure for department M. After department M, all production goes into other factory departments to be completed prior to being dispatched to customers. Decisions involving capital expenditure in department M are taken by Reginald. Which of the following describes Reginald's role in department M? A A cost centre manager B An investment centre manager C A profit centre manager 21. Which of the following is an initial requirement of a management control system? A Establishing the standard to be achieved B Measuring the actual performance C Setting organizational objectives 22. Total costs incurred by a business may be expressed as: Y=a+bx When y represents the total costs a represents the total fixed costs b represents the variable costs per unit x represents the number of units of output

A company has variable costs of 1220 per unit and total costs, for output of 7,400 units in a period, of 156,980. Using the above formula and information, what are the total fixed costs in the period? A 42,540 B 66,700 C 90,280 D 247,260 23. The following is an extract from the list of accounts of a washing machine manufacturer: Codes Direct materials 10001999 Direct labour 20002999 Direct expenses 30003999 Production overheads 40004999 Which of the following are coded correctly? CODE A 4160 B 2430 C 1670 D 3020 DESCRIPTION wages of operatives who work on the product wages of production department supervisor cleaning materials royalties for component used in manufactured product

24. Which of the following is a direct expense? A Materials used on production B Special tools for job 721 C Power D Depreciation 25. Which of the following is not used for the capture and storage of management accounting data by computer? (i) Bar code A (iii) only B (i), (ii) and (iv) only C (i), (iii) and (iv) only D (ii), (iii) and (iv) only (ii) Disk (iii) Printer (iv) Tape