Which of the following is the best definition of a business cost?

Select one:

a. Any payment of money by the business or its owners

b. Any payment of money by the business

c. The use of resources by the business

d. Any receipt of money by the business

Question 2

Helibeb Limited buys and sells brown coarse sand in the course of its business.

At the start of last month, Helibeb had an inventory of brown coarse sand valued at 5999 at cost

During last month, Helibeb bought coarse brown sand costing 6000

At the end of last month, Helibeb had an inventory of brown coarse sand valued at 4500

Note: No brown coarse sand was written off or written down as damaged or unsaleable in the course of last month.

How much was Helibeb's cost of inventory of brown coarse sand last month?

Give your answer as a whole number of without commas. For example, for 50,000.00 enter 5000

Answer:

Question 3

At the start of the last financial year, Helibeb Limited was owed 2.5 million by customers.

During the last financial year, Helibeb Limited received 25.0 million from customers.

At the end of the last financial year, Helibeb Limited was owed 5.3 million by customers.

What was Helibeb's sales income for the last financial year?

Note: All customers paid Helibeb what they owed on or before the due date during the financial year, no customers' debts were written off and all customers are expected to continue paying on or before the due date.

Enter your answer in million of , to 1 decimal place, without commas. For example, for 251.6 million million enter 251.6

Answer:

Question 4

It is the start of Helibeb Limited's new financial year.

Helibeb Limited owns a theatre building which it cost the company 7.5 million to build 20 years ago. The building is 20 years old.

10 years ago a surveyor revalued the theatre to 10.0 million which reflected the cost of building a similar theatre in a similar location then.

A surveyor has now revalued the theatre building to 19.2 million, which reflects the cost of buying a similar theatre in a similar location now, at the start of this new financial year.

Helibeb expects to use the theatre building for another 80 years and then sell the property for an estimated 1 million.

Helibeb calculates depreciation on its property on a straight-line basis, meaning that it charges the same amount every year, until the next revaluation.

Helibeb calculates depreciation on its property on the basis of current values.

What is the cost of depreciation for the theatre for the new financial year?

Enter your answer as to the nearest without commas. For example, for 249,999.75 enter 250000

Answer:

Question 5

Expenditure for your business on vehicle maintenance is projected to be as follows for the next year:

300,000 if income is 0

300,000 if income is 1,000,000

300,000 if income is 2,000,000

600,000 if income is 3,000,000

600,000 if income is 4,000,000

600,000 if income is 5,000,000

900,000 if income is 6,000,000

What type of cost is vehicle maintenance, from the perspective of cost behaviour?

Select one:

a. A variable cost

b. A semi-variable cost

c. A step fixed cost

d. A semi-fixed cost

Question 6

Laundry services are a semi-fixed cost for your business.

Projected laundry costs are as follows:

If your income for the next year is 0.5 million, your laundry costs for the year will be 2,000

If your income for the next year is 1 million, your laundry costs for the year will be 2,500

If your income for the next year is 2 million your laundry costs for the year will be 3,500

What will your laundry costs for the year be if your income for the next year is 9.2 million?

Enter your answer as a whole number of , rounded to the nearest , without commas. For example, for 3,425.22, enter 3425

Answer:

Question 7

The variable cost of producing 20,000 pencils is 2,000

The selling price for one pencil is 22p.

What is the unit contribution for each pencil sold?

Enter your answer in pence. For example, for 0.25 enter 25

Answer:

Question 8

Your company makes and sells umbrellas.

Your fixed costs are 213500 per annum

You sell each umbrella for 5.00

The variable costs for each umbrella sold are 4.50

What is your breakeven point in numbers of umbrellas sold for one year?

Enter your answer as a whole number, without commas, rounding up if your exact answer is a fraction. For example, for 2,432.4 enter 2433

Answer:

Question 9

Your company generates and sells electricity.

Your budgeted fixed costs are 10.4 million for next year.

Your budgeted variable costs are 25.00 per megawatt hour.

Your budgeted selling price is 30.00 per megawatt hour.

What is your breakeven point in megawatt hours for the year?

Enter your answer in megawatt hours to 2 decimal places and without commas. For example, for 2,477,888.339 MwH enter 2477888.34

Answer:

Question 10

Your company makes and sells beachballs.

Your budgeted fixed costs are 200,000 per year.

Your budgeted unit variable costs are 3.63 per beachball sold.

Your budgeted selling price is 5.00 per beachball sold.

What is your breakeven point in of sales revenue.

Enter your answer in to 2 decimal places, rounded up, and without commas. For example, for 255,355.973, enter 255355.98

Answer:

Question 11

You are preparing a flexible budget for next year.

Fuel for delivery vehicles is a semi-variable cost, the variable element of which is proportional to sales income.

For sales income of 10 million the delivery vehicle fuel budget is 300000

For sales income of 20 million, the delivery vehicle fuel budget is 353529

What is the delivery vehicle fuel budget for sales income of 30 million?

Enter your answer as a whole number of to the nearest , without commas For example, for 500,025.25 enter 500025

Answer:

Question 12

You are preparing a flexible budget for next year.

Gold leaf is a variable cost, which varies in proportion to sales income.

For sales income of 2 million the gold leaf budget is 106688

What is the gold leaf budget for sales income of 10 million?

Enter your answer as a whole number of to the nearest , without commas For example, for 500,025.25 enter 500025

Answer:

Question 13

You are preparing a flexible budget for next year.

Advertising is a fixed cost.

For sales income of 25 million, the advertising budget is 341570.

What is the advertising budget for sales income of 50 million?

Enter your answer as a whole number of to the nearest , without commas For example, for 500,025.25 enter 500025

Answer:

Question 14

You are preparing an expenditure budget for a department of a company established 50 years ago. The department for which you are preparing the budget has been in operation for all of those 50 years. You are drawing up a budget for next year without looking at this year's or last year's budget or this year's or last year's expenditure. It will be an entirely new budget, not based on past practice or experience. Your budget will not allow for any variations in corporate activity or income. What type of budget are you preparing?

Select one:

a. An Incremental Budget

b. A Rolling Budget

c. A Zero-Base Budget

d. A Flexible Budget

Question 15

You are provided with the following details of a proposed investment in a new machine:

The factory will cost 500,000 to acquire and install and will have a useful life of 20 years.

At the end of the useful life of the machine, it is forecast that it can be sold for spare parts and scrap metal for 20,000.

Depreciation is to be charged on a straight-line basis.

If the machine is acquired, its production activity is forecast to generate revenue of 830,000 per year.

The other annual costs, apart from depreciation, resulting from use of the machine are forecast to be as follows:

	000
Labour	300.0
Production Materials	300.0
Maintenance	8.0
Lubricants and other Supplies	8.7
Electricity Supply	1.9
Ventilation	3.5
Distribution Costs for Products	104.6
Other costs, excluding depreciation of the machine	2.9

What is the forecast annual profit from the use of the machine? Enter your answer as a whole number in without commas. For example, for 600,000, enter 600000

Answer:

Question 16

You are provided with the following details of a proposed investment in a new machine:

The factory will cost 500,000 to acquire and install and will have a useful life of 20 years.

At the end of the useful life of the machine, it is forecast that it can be sold for spare parts and scrap metal for 20,000.

Depreciation is to be charged on a straight-line basis.

If the machine is acquired, its production activity is forecast to generate revenue of 830,000 per year.

The other annual costs, apart from depreciation, resulting from use of the machine are forecast to be

You are provided with the following details of a proposed investment in a new machine:

The factory will cost 500,000 to acquire and install and will have a useful life of 20 years.

At the end of the useful life of the machine, it is forecast that it can be sold for spare parts and scrap metal for 20,000.

Depreciation is to be charged on a straight-line basis.

If the machine is acquired, its production activity is forecast to generate revenue of 830,000 per year.

The other annual costs, apart from depreciation, resulting from use of the machine are forecast to be as follows:

	000
Labour	300.0
Production Materials	300.0
Maintenance	8.0
Lubricants and other Supplies	8.5
Electricity Supply	7.6
Ventilation	3.5
Distribution Costs for Products	104.6
Other costs, excluding depreciation of the machine	2.9

What is the forecast average investment in the machine over the 20 years of its useful life? Enter your answer as a whole number in without commas. For example, for 600,000, enter 600000

Answer:

Question 17

You are provided with the following details of a proposed investment in a new machine:

The factory will cost 500,000 to acquire and install and will have a useful life of 20 years.

At the end of the useful life of the machine, it is forecast that it can be sold for spare parts and scrap metal for 20,000.

Depreciation is to be charged on a straight-line basis.

If the machine is acquired, its production activity is forecast to generate revenue of 830,000 per year.

The other annual costs, apart from depreciation, resulting from use of the machine are forecast to be

You are provided with the following details of a proposed investment in a new machine:

The factory will cost 500,000 to acquire and install and will have a useful life of 20 years.

At the end of the useful life of the machine, it is forecast that it can be sold for spare parts and scrap metal for 20,000.

Depreciation is to be charged on a straight-line basis.

If the machine is acquired, its production activity is forecast to generate revenue of 830,000 per year.

The other annual costs, apart from depreciation, resulting from use of the machine are forecast to be as follows:

	000
Labour	300.0
Production Materials	300.0
Maintenance	8.0
Lubricants and other Supplies	2.7
Electricity Supply	2.5
Ventilation	3.5
Distribution Costs for Products	104.6
Other costs, excluding depreciation of the machine	2.9

What is the forecast annual accounting rate of return from the use of the machine? Enter your answer as a percentage rounded to 2 Decimal Places, without the percentage sign. For example, for 10.768% enter 10.77

Answer:

Question 18

You are evaluating a proposal to buy a new executive jet for your corporation.

The new jet will cost 20.3 million to buy. You will need to pay for this jet as soon as you purchase it.

If you buy the new jet, you will sell the old executive jet for 3.0 million, which you will receive immediately.

If you buy the new jet, there will be immediate extra training costs totalling 200000, for air crew and ground staff, which will occur once only and will be paid immediately.

The new jet is more fuel-efficient and buying it will lead to an estimated saving of 500000 per year on fuel.

However, maintenance will be more expensive and therefore maintenance costs will be 100000 more per year than at present.

All fuel and maintenance costs must be paid for in the year in which they are incurred.

Based on the above information, what is the estimated payback period for the new jet in years?

Enter your answer to 1 decimal place, without commas. For example, for 6.33 years enter 6.3

Answer:

Question 19

Company Z has total assets of 35.5 million and total equity of 9.8 million.

How much are Company Z's total liabilities millions of ?

Enter your answer to 1 decimal place in millions of . For example, for 22.5 million enter 22.5

Answer:

Question 20

Company Y has equity of 166.9 million and total liabilities of 129.5 million.

What is the value of Company Y's assets in millions of ?

Enter your answer in millions of to 1 decimal place. For example, for 558.7 million enter 558.7

Answer:

Question 21

For last year Company X had sales income of 55.2 million, cost of sales of 36.7 million, distribution costs of 5.1 million, administration costs of 1.9 million and finance costs of 1.0 million.

What was Company X's gross profit for last year in millions of ?

Enter your answer in millions of to 1 decimal place. For example, for 3.8 million enter 3.8

Answer:

Question 22

For last year Company W had sales income of 44.4 million, cost of sales of 22.3 million, distribution costs of 1.2 million, administration costs of 5.5 million and finance costs of 3.3 million. What was Company W's operating profit for last year in millions of . Enter your answer to 1 decimal place in millions of . For example, for 2.2 million enter 2.2

Answer:

Question 23

Company V is buying an expensive machine under a hire purchase agreement which requires payments over a large number of years.

Which of the following is not a reason why the payments for each year under the hire purchase agreement may not be equal to the depreciation to be charged on the machine for that year?

Select one:

a. The hire purchase payments include interest, which is a finance cost and not part of the initial purchase cost of the machine.

b. The last payment under the hire purchase agreement may be due several years before the machine ceases to be used by Company V.

c. The machine might be revalued for accounting purposes by a competent engineer at some time during its useful life at Company V.

d. The machine will also require maintenance during its useful life.

Question 24

Company U uses current values for its non-current assets in its financial accounts.

Company U bought a block of flats for 22.8 million 10 years ago.

The residual value was estimated at 4.6 million and the useful life of the block of flats was estimated at 50 years

Depreciation has been charged on a straight-line basis

At the start of this year, a surveyor revalued the block of flats for accounting purposes to a current value 30.5 million with an estimated future useful life of 40 years and a residual value of 4.6 million.

Depreciation is still to be charged on a straight-line basis.

What is the depreciation charge on the block of flats for this year?

Enter your answer as a whole number of pounds, without commas. For example, for 404,202.00 enter 404202

Answer:

Question 25

Company U made a profit of 550 million after tax last year.

Which of the following may have resulted in Company U's total equity increasing by more than 550 million during the year.

Select one:

a. The receipt of a loan of 5 million from a director

b. Payment of a dividend out of the profit of 550 million

c. An impairment review resulting in non-current assets being written down to a lower value at the start of the year

d. The revaluation of non-current assets to a higher value half way through the year

Question 26

Ordinary shares in Company T are listed on the London Stock Exchange.

Company T has announced a dividend of 25p per ordinary share for the current year. There will be only one dividend payable for the year.

It is forecast that Company T will announce a dividend of 26p per ordinary share for next year and that there will be only one dividend payable for the year.

Company T's shares have a market price of 324.89p

Calculate Company T's cost of equity capital based on the information above.

Give your answer as a percentage, without the percent sign, to 2 decimal places. For example, for 8.333% enter 8.33

Answer:

Question 27

Ordinary shares in Company S are listed on the London Stock Exchange.

Company T has announced a dividend of 32p per ordinary share for the current year. There will be only one dividend payable for the year.

It is forecast that Company T will announce a dividend of 34p per ordinary share for next year and that there will be only one dividend payable for the year.

Company T's shares have a market price of 698.63p

Calculate Company T's cost of equity capital based on the information above.

Give your answer as a percentage, without the percent sign, to 2 decimal places. For example, for 8.333% enter 8.33

Answer:

Question 28

On April 1st last year, Company S had assets of 87.0 million and liabilities of 12.4 million.

In the year ended March 31st this year, Company S made a profit of 12.3 million before tax, of which 2.3 million is payable in tax and 3.3 million has been distributed as a dividend. No further dividends have been announced.

Company S has 300 million ordinary shares in issue, each with a nominal value of 10p of which 200 million are listed on the London Stock Exchange. On April 1st last year, the market price of each of these shares was 165.56p. On March 31st this year it was 140.25p.

None of Company S's assets were revalued during the year. Company S did not acquire or sell any other companies, did not issue any further shares or bonds and did not redeem any shares or bonds. There were no changes in reserves other than those stated above.

How much was the book value of the shareholders' equity in Company S at March 31st this year, in millions of ?

Give your answer to 1 decimal place in million, without commas. For example, for 33.762 million enter 33.76

Answer:

Question 29

For the last financial year Company XL made an operating profit of 476 million.

During the last financial year:

The amount owed to Company XL by the company's trade debtors decreased from 44 million to 40 million.

The amount owed by Company XL to the company's trade creditors increased from 77 million to 98 million.

The book value of inventory owned by Company XL increased from 106 million to 126 million.

Calculate Company XL's net cash inflow from operations for the last financial year.

Give your answer as a whole number millions of . For example, for 241 million enter 241

Answer:

Question 30

For the last financial year Company XXL made an operating profit of 25.2 million.

During the last financial year:

The amount owed to Company XXL by the company's trade debtors increased from 2.1 million to 2.2 million.

The amount owed by Company XXL to the company's trade creditors increased from 1.9 million to 2.5 million.

The book value of inventory owned by Company XXL increased from 1.2 million to 1.4 million.

Calculate Company XXL's net cash inflow from operations for the last financial year.

Give your answer in millions of to 1 decimal place. For example, for 24.5 million enter 24.5

Answer: