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BA2 Exam Dumps : Fundamentals of management accounting

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Fundamentals of management accounting Questions and Answers

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Question 1

Which of the following is the LEAST appropriate basis on which to apportion the insurance costs of plant and machinery:

Options:

A.

Machine hours

B.

Net book value

C.

Original cost

D.

Replacement cost

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Question 2

Which of the following statements regarding variances is valid?

Options:

A.

Using higher quality material than standard could explain an adverse labour efficiency variance.

B.

Improved maintenance of production machinery could explain an adverse material usage variance.

C.

An adverse labour rate variance could explain a favourable labour efficiency variance.

D.

Poor supervision could explain a favourable labour rate variance.

Question 3

During the first financial period of this year a company posted profit of £340,000. However, their overheads were over absorbed by £20,000 in this period. As a result they tried to update their absorption rate for the current

period and as such they ended up under absorbing their overheads by £12,000.

They have also reported a sales volume increase of 550 when comparing this period to last.

You have been given the following information on unit cost/prices:

Selling price = £95 per unit

Variable production cost per unit = £15

Variable selling cost per unit = £18

Fixed overhead per unit = £8

They have asked you to reconcile their profit between periods.

Based on the information you have been given, what is their profit for the current period?

Options:

A.

£337,700

B.

£349,700

C.

£357,700

D.

£369,700

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