mcq quesion

Which one of the following statements about overhead absorption rates is FALSE? Select one: O a. They can be absorbed using material usage or machine hour usage o b. They are predetermined in advance for each period O c. They are based on actual data for each product od. They are used to charge overheads to products The Kids Made Easy Ltd (KME) manufactures 20,000 nappies each period. The nappies are used as an input for producing several other products that KME manufactures (bags of 5,10,20,40). The full manufacturing costs for a batch of 100 nappies are as follows: Direct materials 552 Direct labour 377 Variable manufacturing overhead 492 Average fixed manufacturing overhead 673 Total 2094 The fixed manufacturing overhead comprises depreciation expenses related to prior investments in facilities and equipment that are used in the manufacturing of the nappies. These assets have no other use than for the manufacturing of nappies. An outside supplier has offered to sell KME the 20,000 nappies necessary to meet production needs this period for a lump sum of 144984. If KME accepts this outside supplier's offer, rather than manufacturing in house, the company will be: Select one: 139216 better off 273816 worse off O 144984 worse off O 163416 better off Indiana sells goods entirely on credit. In respect of sales in any given month, she expects 45% to be paid for in the following month (1 month later), 50% in the month after that (2 months later), and 2% in the month after that (3 months later). The remainder is bad debt. Budget data relating to 5 months of Indiana's sales are as follows: June May 14131 July 12745 August 10164 September 9722 13449 Required: Calculate the amount that Indiana needs to include in her cash budget as sales receipts in September. Round answer at the end to nearest pound (). Select one: O a. 11215 O b. 11619 O c. 9712 O d. 12742 A business manufactures gardening gloves and sells to major gardening centres. The variable costs of each pair of gloves are 9.37 for materials and 8.83 for labour. Each pair of gloves currently sells for 40.92.In the coming year, production overheads are expected to be 141715, with 27034 pair of gloves produced. Overheads are absorbed on the basis of volume. The company wishes to change to full manufacturing cost plus a mark up of 7% to remain competitive in the market. What will be the selling price per pair of gloves using the new basis? Select one: O a. 5.61 O b. 43.78 O c. 19.47 O d. 25.08