Questions and Answers of Management And Cost Accounting 11th

Darwin uses decision tree analysis in order to evaluate potential projects. The company has been looking at the launch of a new product which it believes has a 70 per cent probability of success. The
A decision-maker using the maximin decision criterion will:(a) Assume that uncertainty can be ignored and will select the option with the highest expected value;(b) Assume that he/she will regret not
Mylo runs a cafeteria situated on the ground floor of a large corporate office block. Each of the five floors of the building are occupied and there are in total 1,240 employees. Mylo sells lunches
Euclid plc has a factory that manufactures a wide range of specialist carpentry tools. One type of product, the Chipper, is made on a purpose-built machine that was installed in January 2017 at a
Using an interest rate of 10 per cent per year the net present value (NPV) of a project has been correctly calculated as $50. If the interest rate is increased by 1 per cent the NPV of the project
Fabrix plc is a large, all-equity financed, divisionalized company that supplies the construction industry. It has a current cost of capital of 15 per cent. The annual performance of its four
A company is deciding which of two alternative machines (X and Y) to purchase. The useful lives for machines X and Y are two years and three years respectively. The cash flows associated with each of
PK is a large public company in the telecommunications sector. One of its main planning and control tools is the preparation and use of traditional annual budgets. Whilst this may be appropriate for
The preparation of budgets is a lengthy process which requires great care if the ultimate master budget is to be useful for the purposes of management control within an organization.Required:(a)
A master budget will consist of many individual budgets.Outline and briefly explain the steps that should be taken in the preparation of master budgets in a manufacturing company, indicating the main
A company manufactures and sells on product which requires 8kg of raw materials in its manufacture. The budgeted data related to the next period are as follows:What is the budgeted raw material
Which of the following would NOT be expected to appear in an organization’s mission statement?(a) The organization’s values and beliefs(b) The products or services offered by the organization(c)
Which TWO of the following are benefits of budgeting?(a) It is a starting point for strategic planning.(b) It fulfils legal reporting obligations.(c) It helps coordinate the activities of different
Corfe Co. is a business which manufactures laptop batteries and it has developed a new battery which has a longer usage time than batteries currently available in laptops. The selling price of the
The Eastland Postal Service is government owned. The government requires it to provide parcel delivery service to every home and business in Eastland at a low price which is set by the government.
The major reason for introducing budgetary control and standard costing systems is to influence human behaviour and to motivate the managers to achieve the goals of the organization. However, the
The final impact which any accounting system has on managerial and employee behaviour is dependent not only upon its design and technical characteristics but also in the precise manner in which the
Information relating to two processes (F and G) was as follows:For each process, was there an abnormal loss or an abnormal gain?(a) Process F(b) Process G Process Normal loss as % of
‘Motivation is the over-riding consideration that should influence management in formulating and using performance measures, and in designing management control systems.’Discuss this statement in
ABC Co. has a manufacturing capacity of 10,000 units. The flexed production cost budget of the company is as follows:What is the budgeted total production cost if the company operates at 85%
The following statements relate to the participation of junior management in setting budgets:1 It speeds up the setting of budgets.2 It increases the motivation of junior managers.3 It reduces the
A profit centre manager claims that the poor performance of her division is entirely due to factors outside her control. She has submitted the following table along with notes from a market expert,
Prancer Co. uses standard costing to control its costs and revenues. A standard cost card for its only product is given below together with a standard cost operating statement for last month.Actual
A company has calculated a $10,000 adverse direct material variance by subtracting its flexed budget direct material cost from its actual direct material cost for the period.Which TWO of the
A company uses a standard costing system. The company’s sales budget for the latest period includes 1,500 units of a product with a selling price of $400 per unit. The product has a budgeted
Which TWO of the following statements relating to management accounting information are TRUE?(a) It is produced for parties external to the organization.(b) There is usually a legal requirement for
Up to a given level of activity in each period the purchase price per unit of a raw material is constant. After that point, a lower price per unit applies both to further units purchased and also
Which of the following statements regarding market penetration as a pricing strategy is/are correct?1. It is useful if significant economies of scale can be achieved.2. It is useful if demand for a
Jewel Co. is setting up an online business importing and selling jewellery headphones. The cost of each set of headphones varies depending on the number purchased, although they can only be purchased
A company makes two products using the same type of materials and skilled workers. The following information is available:Fixed costs relating to material handling amount to $100,000.The cost driver
A company uses an activity -based costing system.The company manufactures three products, details of which are given below:Annual inspection costs are $150,000.The inspection cost per unit of Product
Sweet Cicely (SC) manufactures sweets and confectionery and has delivered stable but modest increases to the shareholder wealth for many years. Following a change in ownership, the new shareholders

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