ALL 10 questions are compulsory and MUST be attempted. Each SECTION A-MULTIPLE CHOICE QUESTIONS 2 make (Total 20 mark 1. Fixed costs are USD 66,000, variable cost per unit is USD 1.20, and budgeted units 200,000 units Determine the budgeted production costs. USD 300,000 USD 360,000 C USD 240,000 D. USD 276,000 200 1,2240 240 +60 300 2. XYZ company uses a standard absorption costing system. Last month budgeted prod 8.000 units and the standard fixed production overhead cost was $15 per unit. Actual F last month was 8,500 units and the actual fixed production cost was $17 per unit. Wha total adverse fixed production overhead variance for last month? A. $7,500 B. $16,000 $17,000 $24,500 177,5 24,5 A company manufactures one product which it sells for $40 per unit. The product contribution to sales ratio of 40% Monthly total fixed costs are $60,000. At the planned le activity for next month, the company has a margin of safety of $64,000 expressed in terr sales value. What is the planned activity level (in units) for next month? A. 3,100 B. 4,100 C. 5,350 D. 7,750 4. An organization manufactures a single product which is sold for $60 per unit. The organization's total monthly fixed costs are $54,000 and it has a contribution to sales ratio o 40%. This month it plans to manufacture and sell 4,000 units. What is the organization's margin of safety this month (in units)? A. 1,500 B. 1,750 C. 2.250 D. 2,500 Margin of Safety Sales- BEPunit =4000- 5. To which account would an unfavorable materials usage or labor efficiency variance caused by carelessness or inefficiency be closed? A. Materials Inventory B. Income Summary C. Work in Process Finished Goods Inventory 1 5000.- for PlasBas Co uses recycled plastic to manufacture shopping baskets for local retailers. The standant price of the recycled plastic is 50 50 per kg and standard usage of recycled plastic is 02 each basket. The budgeted production was 80,000 baskets. Due to recent government incentives to encourage recycling, the standard price of recycled plastic was expected to reduce to 50 40 per kg The actual price paid by the company was 50 42 per kg and 100,000 baskets were manufactured using 20,000 kg of recycled plastic. 6. What is the materials operational price variance? $2,000 favorable B. $1,600 favorable C. $400 adverse D. 1,600 adverse MPV-AQ (AP-SP) = 100 000 (0.42-0,4) = 2000 (F) 7. Which of the following describes a 'basic standard" within the context of budgeting? A standard which is kept unchanged over a period of time B. A standard which is based on current price levels C. A standard set at an ideal level, which makes no allowance for normal losses, wast machine downtime DA standard which assumes an efficient level of operation, but which includes allowan factors such as normal loss, waste and machine downtime 8. Which of the following techniques is NOT relevant to target costing? A. Value analysis B. Variance analysis Functional analysis D. Activity analysis 9. Which of the following statements regarding market penetration as a pricing str correct? (1) It is useful if significant economies of scale can be achieved (2) It is useful if demand for a product is highly elastic A. 1 only B2 only C. Neither 1 nor 2 D. Both 1 and 2 10. What is the name given to a budget which has been prepared by buildir. period's budgeted or actual figures? A. Incremental budget B. Flexible budget C. Zero based budget D. Functional budget 11. Description of Budget A Desailed plan the the future tions are compulsory and MUST be attempted. Each questi Expedi quantitative terms C. Fue plans with drill down information about money matters D. Deals with estimating the values of parameters E Steps in carrying out the business F. Based on the measured empirical data GA process of approximating incurred costs H. Applied for equipment replacement value decisions 12. CVP is useful for studying sensitivity of profit for shifts in A) Fixed Costs B) Variable Costs C) Profitability D) Sales Volume E) Cost of Goods sold F) Finished Goods G) Direct Labor H) Applied Overhead 13. A number of assumptions commonly underlie CVP analysis: A) Selling price is constant. B) In multiproduct companies, the sales mix is constant. C) Costs are linear but cannot be accurately divided into variables D) The price of a product or service will change as volume changes. E) The variable element is not constant per unit F) The fixed element is not constant in total over the entire relevant range. G) In manufacturing companies, inventories do not change. H) The number of units produced cannot be equals the number of units sold. 14. Elements of just-in-time system: A Limited number of suppliers B) Improving plant layout C) Reduced setup time D) Law level of PPE E) Capital stock account F) Limited number of buyers Permanent changes in Liability accounts H) High level of defect products 15. Which of the following associated with flexible budget? A. Differs from static budget B. It geared toward only one level of activity C. It does not confine itself to only one level of activity, but rather i- activities D. Incorporates anticipated values about inputs and outputs that are co costs correctly in case of any change in circumstances E. Actual results are always compared against budgeted costs at the question begins budget activity level F. Actual results do not have to be compared against budgeted costs level G. Prepared under the assumption that all conditions will remain una