Question 1 Observation of the four previous months has identified the following total cost data for production costs within Danny Dog plc. Activity level Total cost 20,000 30,000 40,000 55,000 50,000 67,500 30,000 42,500 Based on the hi-lo method of cost estimation, what is the variable cost per unit of production? a. 1.50 b. 1.40 c. 1.25 d. 1.70 Question 2 Alpha Limited has sales of 200,000, variable costs of 150,000 and fixed costs of 25,000. What is the organisation's operating gearing? a. 2 b.3 I C. 6 d.4 Question 3 Pedro Pony Ltd sells widgets to the manufacturing industry at a price of 63 per widget. His cost structure is as follows: Material cost per unit = 24 Direct labour cost per unit = 10 Other variable overhead cost per unit = 4 Annual fixed manufacturing overhead = 16,000 Annual fixed selling and administrative overhead 8,000 What is the break-even point of the business in units? a. 552 b. 828 c. 640 d. 960 Question 4 +Which of the following costs is MOST likely to be stepped fixed in nature Production line supervisors' salaries Material costs Heat and light expense Head office rental expenditure Leia plc is assessing the financial impact of shutting down one of its loss making divisions. The divisional P&L, together with notes on the relevance of each cost item, is presented below: Sales 90,000 Variable (60,000) costs Contribution 30,000 All staff would be relocated elsewhere in the business on the same Staff salaries (10,000) salary Insurance costs This is an allocation of the total insurance premium for the company as a whole. The insurance company has indicated that it (12,000) would not be prepared to reduce the cost of the premium by 2,000 for the business as a whole based on the closure of one division Depreciation (20,000) Profit (12,000) Question 5 According to relevant costing analysis, what would be the impact on Leia of shutting down the division? a. 28,000 cost b.12,000 cost c. 30,000 cost d. 12,000 benefit Question 6 Beta Limited has an operating gearing of 3. If activity decreases by 5% the profit of the business will decrease by a. 3% b.15% c. 5% d. profit will remain unchanged Question 7 Slinky Ltd has unit material cost, labour cost and overhead cost of 10.00, 5.00 and 8.00 respectively. Slinky sets the selling price of its product by marking up total cost by 20%. What is the unit selling price of the product? a. 18.00 b. 23.00 c 28.75 d. 27.60 Question 8 Freddie Fox Ltd sells widgets to the manufacturing industry at a price of 70 per widget. His cost structure is as follows: Material cost per unit = 20 Direct labour cost per unit = 14 Other variable overhead cost per units 4 Annual fixed manufacturing overhead = 16,000 Annual fixed selling and administrative overhead = 8,000 Freddie Fox's budgeted operating level for the year is to make and sell 1,600 widgets. Based on this level of activity, what is the margin of safety expressed both in of sales and as a percentage of the budgeted position? a. 59,000 and 113.3% b.59,500 and 113.3% c. 59,000 and 12.5% d.59,500 and 53.1% sited States) Focus Question 9 Adam Company had net operating income of 130,000 using variable costing and 160,000 using absorption costing. Variable production costs were 10 per unit. Total fixed manufacturing overhead was 150,000 and 25,000 units were produced. During the year, the stock level: a. Increased by 5,000 units b. Increased by 5,250 units c. Decreased by 5,250 units d.Decreased by 5,000 units Question 10 Which one of the following costs is likely to be relevant for the financial analysis on whether to go ahead with an investment in a new project? a. Research and development costs already spent b. Marketing department salary costs allocated to the project for advertising support C. Revenue streams associated with the project d. Depreciation on the assets required for the new project ced States) Focus MacBook Pro Question 11 Observation of the four previous months has identified the following total cost data for production costs within Danny Dog plc. Activity level Total cost 20,000 45,000 40,000 70,000 50,000 90,000 30,000 56,000 Using the Hi-Low method of analysis, the variable production cost per unit has been established as 1.50. What is the total fixed production cost? a. 45,000 b. 15,000 c. 5,000 d. 20,000 Question 12 Madame Gazelle Ltd sells widgets to the manufacturing industry at a price of 58 per widget. Her cost structure is as follows: Material cost per unit = 20 Direct labour cost per unit = 14 Other variable overhead cost per unit = 4 Annual fixed manufacturing overhead = 19,000 Annual fixed selling and administrative overhead = 11,000 What is the sales revenue required to achieve a target profit of 6,000? a 102,000 b.348,000 C 68,000 d.104,400 (United States) Focus . Question 13 Ethan Limited has the following unit cost structure Revenue 100 Costs (60) Profit 40 The percentage mark up on cost to determine price, and the percentage profit margin, are: a. Mark up = 100%, margin = 60% b. Mark up = 40%, margin = 66.7% C. Mark up = 66.7%, margin = 40% d. Mark up = 60%, margin = 40% Question 14 Costing information for Emily Elephant Limited is as follows: Direct material cost per unit 27 Direct labour cost per unit 16 Variable manufacturing overhead cost per unit 10 Variable selling and administrative overhead cost per 12 unit Fixed manufacturing overhead for the year 15,000 Budgeted production for the year was 5,000 units. What is the budgeted unit product cost according to an absorption costing system? a. 68 b.65 c. 53 d.56 d States Focus Question 15 Luke Limited manufactures widgets. It has established its cost function as y = 6,000+ 10x, where 6,000 is the fixed cost per month, and 10 is the variable cost per widget. In the month of July Luke is planning to manufacture 1,500 widgets. What is the expected fixed cost for July? a. 15,000 b. Zero c. 21,000 d.6,000 ed States) Focus MacBook Pro HAUS, dnmprovements, choose Check for Updates. Question 1 Observation of the four previous months has identified the following total cost data for production costs within Danny Dog plc. Activity level Total cost 20,000 30,000 40,000 55,000 50,000 67,500 30,000 42,500 Based on the hi-lo method of cost estimation, what is the variable cost per unit of production? a. 1.50 b. 1.40 c. 1.25 d. 1.70 Question 2 Alpha Limited has sales of 200,000, variable costs of 150,000 and fixed costs of 25,000. What is the organisation's operating gearing? a. 2 b. 3 C. 6 d. 4 Inited States Focus 5 Question 4 Which of the following costs is MOST likely to be stepped fixed in nature Production line supervisors' salaries Material costs Heat and light expense Head office rental expenditure Leia plc is assessing the financial impact of shutting down one of its loss making divisions. The divisional P&L, together with notes on the relevance of each cost item, is presented below: Sales 90,000 Variable (60,000) costs Contribution 30,000 Staff salaries (10,000) All staff would be relocated elsewhere in the business on the same salary This is an allocation of the total insurance premium for the company as a whole. The insurance company has indicated that it would not be prepared Insurance (12,000) to reduce the cost of the premium by 2,000 for the business as a whole costs based on the closure of one division Depreciation (20,000) Profit (12,000) Focus olish (United States) I Question 5 According to relevant costing analysis, what would be the impact on Leia of shutting down the division? a. 28,000 cost b. 12,000 cost C. 30,000 cost d. 12,000 benefit United States Focus MacBook Pro