MA1 Mock 1 Q1- Which of the following are advantages of using spreadsheets? (1) They help accountants to perform calculations quickly and easily (2) They enable data to be manipulated and numerical information to be analysed (3) They remove the risk of errors in financial analysis 2 and 3 only 1, 2 and 3 1 and 2 only 1 and 3 only Q2- What is an organisation chart designed to show? Directions of responsibility Main items of expenditure Aim of the organisation Coding structure Q3- What is meant by the classification of costs by behaviour? Classification according to how costs change with activity Classification according to whether costs are direct or indirect Classification of costs as prime costs and overheads Classification of costs as material, labour and other expenses Q4- What is a cost unit? A number of different products combined together for cost analysis The cost per unit of a product or service A section of the business where a manager is only responsible for costs A unit of a product or service which has costs attached to it Q5- Forecast sales and production of product P in the next period are 6,000 units and 5,800 units respectively. 50 litres of material M are used per 100 units of product P. Inventory of material M is planned to be reduced by 60 litres in the next period. What quantity of material M needs to be purchased in the next period? 3,060 litres 2,940 litres 2,960 litres 2,840 litres Q6- To which accounts would factory wages charged to production be posted? Wages control, production overhead and bank Creditors and wages control Work in progress and finished goods Wages control, work in progress and production overhead Q7- A direct operative in a production cost centre worked for 41 hours in week 6. The basic week is 38 hours and the basic rate of pay is $12 per hour. Extra hours are worked to meet the general needs of the business and are paid at a premium of 20% above the basic rate. How much of the direct operative's gross wages in week 6 would be charged as a direct cost? $456.00 $492.00 $499.20 $535.20 Q8- Q10- In the cost coding system of Company A each digit of a code represents a classification, with each digit further to the right representing a smaller subset than the previous digit. What type of coding system is Company A using? Sequential Hierarchical Block Mnemonic Q11- Which of the following would occur in a production environment where process costing is used? (1) Continuous production process (2) Output of one process may become the input of the next process (3) Output is always a single product 3 only 1 and 2 only 1 and 3 1, 2 and 3 Q12- Which of the following is/are advantages of using spreadsheets? (1) They are suitable for holding very large volumes of data (2) They enable data to be manipulated easily (3) They enable complex 'what if' analysis to be performed quickly (4) Large spreadsheets are unlikely to contain any critical errors 2 and 3 only 1, 2, 3 and 4 1 and 4 only 2 only Q13- Which of the following statements reflect attributes of real time processing in a computer data processing environment? (1) Control over the input of data is facilitated (2) It is suitable for internal regular tasks (3) Transactions are input and processed immediately (4) Up-to-date information is always available 1, 3 and 4 3 and 4 only 2 and 3 1 and 2 Q16- Which of the following are usual tasks carried out by the accounts department in a large business? (1) Preparation of the payroll (2) Payment of suppliers invoice (3) Quality control of finished product (4) Deciding on selling prices 2 and 3 only 1 and 2 2, 3 and 4 1 and 4 Q17- Which of the following should MOST likely influence the content of a management information report? Top of Form Whether the information is from internal or external sources The information requirements of the recipient of the report The cost of obtaining the necessary information The degree of accuracy of the information within the report Q18- Management needs information to make choices between alternatives. Which purpose of management information is the above statement an illustration of? Control Planning Decision-making Reporting Q19- A trainee accountant working in an accountancy practice carries out a variety of work for several clients in a period. What document may be used by the trainee to record the analysis of hours worked? Employee record card Payroll extract Clock card Timesheet Q20- Which of the following statements about coding is/are correct? (1) A code is a system of words, letters, figures or symbols used to represent other items (2) Authorisation of transactions is not required if codes are used (3) Costs are coded to facilitate their entry into the accounting records Top of Form 2 and 3 1 and 3 2 only 1 only Q21- Telecommunication costs incurred by a business each month are made up of a standing charge plus an additional amount according to the volume of communications. How would the telecommunication costs be classified? Semi-variable cost Fixed cost Stepped cost Variable cost Q22- Which of the following correctly states the activities of a responsibility centre? A profit centre is responsible for revenues only An investment centre is responsible for revenues and capital investment only An investment centre is responsible for costs and capital investment only A profit centre is responsible for costs and revenues Q23- The following information relates to a division of a business for a period: Sales revenue $420,000 Capital employed $260,000 Net profit margin 10% Cost of capital 8% What is the residual income of the division? 2% $3,200 $7,600 $21,200 Q24- When the prices of raw materials are rising which of the following statements is true? Periodic weighted average will give a lower closing inventory valuation than the cumulative weighted average pricing method LIFO will give a lower closing inventory valuation than FIFO Under LIFO production costs will be lower than under FIFO FIFO will give a lower profit figure than LIFO Q25- A bonus scheme operates in a factory. The bonus is calculated as: [(time allowed - time taken) / 3] x basic rate per hour Basic pay in the factory is $10 per hour and time allowed is one hour for production of 20 units. An employee produced 820 units in 35 hours. What were the employee's total earnings? $350 $400 $370 $410 Q26- Which of the following costs would MOST appropriately be apportioned to cost centres on the basis of floor space occupied? Indirect labour Indirect material Machine depreciation Heat and light Q27-Central costs in a business are shared to each cost centre. What term is used for such cost sharing? Absorption Re-apportionment Apportionment Allocation Q28- As part of the purchasing cycle, what is the correct order in which the following documents would be processed? Top of Form Purchase order, purchase requisition, goods received note, invoice Purchase requisition, purchase order, invoice, goods received note Purchase requisition, purchase order, goods received note, invoice Purchase order, purchase requisition, invoice, goods received note Q29- Which of the following identifies a row of cells in a spreadsheet? A1 - G1 A1 - Z10 A5 - B6 A1 - A20 Q30- Which of the following correctly describes the calculation of unit cost of production using batch costing? Prime cost divided by the number of batches produced Full production cost divided by the number of units in the batch Cost of sale divided by units in the batch Direct cost divided by the number of batches produced Q31- A company uses a single process for which the following information is available: Processing cost per input unit $3 Quantity of input units 1,800 Units lost in the production process 15% What is the cost per unit for this process? $3.33 $3.00 $3.53 $2.55 Q32- What is a spreadsheet file with multiple sheets often referred to as? Database Workbook Document Worksheet Q33- Which of the following would NOT be a task of a trainee accountant? Value inventory Estimate product profitability Calculate materials cost Authorising invoices Q34- Which of the following is an advantage of having centralised rather than decentralised business administration? Systems tailored to individual requirements Economy in terms of space and cost Administration under control of local management Self-sufficient local offices Q35- What is the double-entry for the purchase of raw materials on credit in an integrated accounting system? Dr Purchase ledger control Cr Raw materials control Dr Payables control Cr Raw materials control Dr Cost ledger control Cr Purchase ledger control Dr Raw materials control Cr Payables control Q36- What document is required to authorise an issue of raw material from stores? Materials requisition Purchase requisition Bin card Goods received note Q37- How is the contribution per unit calculated in marginal costing? Selling price less total variable costs per unit Selling price less variable production costs per unit Selling price less total production costs per unit Selling price less total costs per unit Q38- A company absorbs indirect costs as follows: Production overheads $29.40 per machine hour worked Selling and administration overheads 12% of total production costs During a period 6,000 units of a product were manufactured in 1,000 machine hours. Direct costs incurred in the manufacture of the product were: Raw materials $18,600 Labour 1,800 hours at $15 per hour What is the total cost per unit of the product? $12.50 $37.00 $14.00 $41.44 Q39- The labour efficiency and capacity utilisation ratios in a period were 112% and 94% respectively. What was the production volume ratio in the period (to the nearest %)? 105% 84% 106% 119% Q40- Materials inventory at the beginning of the month totalled $16,780. The following lists activity during the month: $ Purchases of materials, all on credit $33,660 Issues of direct materials from inventory $29,010 Issues of indirect materials from inventory $1,980 Return of materials to suppliers $860 Return of materials to inventory following over-issue $620 What was the inventory of materials at the end of the month? $19,450 $19,210 $19,690 $20,930 Q41- In month 2 the materials purchased by a manufacturing business totalled $126,440. The materials inventory at the end of month 2 was $75,770. During month 2 the issues of direct materials to production were $114,960 and issues of indirect materials were $7,590. What was the balance on the materials control account at the beginning of month 2? $79,660 $71,880 $56,700 $94,840 Q42- In a factory cost centre direct operatives are paid $9 per hour. Ten units of product A are manufactured per direct operative hour. If productivity improves by 10% what will be the direct labour cost per unit of product A (to two decimal places)? $0.82 $0.81 $1.11 $0.90 Q43- Actual and budgeted figures for a manufacturing cost centre for a period are: Actual Overhead costs Budget $181,250 $150,000 Labour hours 75,000 72,000 Labour hours are used to absorb the overheads in the cost centre. What is the predetermined overhead absorption rate (to two decimal places)? $2.08 $2.42 $2.52 $2.00 Q44- Jonah prepares the following information for material purchases: Sales 100 units Opening inventory of finished goods 50 units Closing inventory of finished goods 75 units Materials per unit 3 kg Labour hours per unit 4 Opening inventory of raw materials 300 kg Closing inventory of raw materials 450 kg What will be material purchases for Jonah? 450 kg 525 kg 75 kg 650 kg Q46- The formula =B5*B9 - D1/D2 appears in a spreadsheet cell. Which of the following is a way to re-write the formula in order to produce the same result? (B5 x B9) - (D1 ÷ D2) [B5 x (B9 - D1)] ÷ D2 B5 x [B9 - (D1 ÷ D2)] [(B5 x B9) - D1] ÷ D2 Q47- The information below contrasts management accounting with financial accounting. Management accounting Financial accounting (1) Accounts presentation determined by standards (1) Accounts presentation determined by management (2) Accounts used both within a business and externally (2) Accounts used within a business only (3) Concerned both with past data and future data (3) Focused on past data (4) Concerned with financial information only (4) Concerned with both financial and nonfinancial information Which of the contrasts is/are true? 1 and 2 1, 3 and 4 2 and 4 3 only Q48- Lilly Co produced a single product called Bud using a single process. No losses occur during the process. During June 500 kg of raw material were input into the process at a total cost of $8,000. Conversion costs during the month amounted to $2,500. There was no work in progress at the start of June. At the end of June 350 kg of Bud were transferred to finished goods. The remaining work in progress was 100% complete with respect to materials and 80% complete with respect to conversion costs. What are the equivalent units for conversion at the end of the month? 470 kg 380 kg 400 kg 500 kg Q49- A large hospital is in the process of budgeting for the heating costs of its various cost centres. Which of the following is the BEST basis for apportioning the heating costs to the cost centres? Number of patients per cost centre Number of employees per cost centre Cubic metres per cost centre Value of machinery in each cost centre Q50-Which department is responsible for preparing goods received note? Stores Purchasing Accounts Quality control
