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Trang 1KIỂM TRA GIỮA KỲ
1 The best description of flexible budget is:
a A budget which improved lead time between the preparation of the master budget and the commencement of the budget period
b A rolling budget which is reviewed quarterly, and updated accordingly
c A budget which is designed to change as volume of activity changes on the basis of analyzing the cost behavior patterns
d A twelve-month period budget which includes semi-variable overhead costs only
2 Information on the static budget and actual result as follows:
Static Budget (12,000 units)
Actual Results (11,200 units)
=> fixed dựa theo số lượng thực tế = 38*11200=355,600
3.Given the following statement:
(i): ROI and RI are tools for evaluating the performance of the profit center
(ii): Net income is a tool to evaluate management performance of divisional managers
(iii): For long-term decision about which segment should be expanded its production and sales to achieve the highest overall target profit, the basis of making decision is the segment’s contribution margin ratio
Which statement(s) is/are correct?
a (i) and (iii)
b None of the above statements is correct
c (i) and (ii)
d (i),(ii) and (iii)
4.The A company prepares a cash budget for the year 20x3 The balance in trades receivable on
1/1/20x2 is $460,000 The budgeted sales for the year 20x2 is $5,400,000, evenly estimated each month of the year Sales at A company are normally collected as follows: 20% in the month of sale;
80% in the month following the sales Total cash receipts in the year 20x2 are expected to be:
$5,500,000 = 460,000 + 5,400,000 – 5,400,000/12*80%
5 Which of the following statements is/ are true? (1) - Kaizen costing method is based around
a calculation involving a desired profit margin and a competitive market price; (2)-An important characteristic of total quality management is a focus primarily on internal customers
and continuous improvement measures Statement (1) is true and statement (2) is false
6 If the operating asset turnover increased by 50 percent and the margin increased by 50
percent, the ROl would increase by: 125 percent (1.5x1.5 = 2.25 => increase 1.25)
7 What is the purpose of a flexible budget?
a To eliminate cyclical fluctuations in production reports by ignoring variable costs
Trang 2b To reduce the total time in preparing the annual budget
c To allow management some latitude in meeting goals
d To compare actual and budgeted results at virtually any level of production
8 The component division (Division C) of a company, CE, Widget manufactures, which it can sell
either to Division E which uses the components to make electronic goods, or externally into a perfectly competitive market Demand for the component is such that Division C is working at fully capacity Components sold to external market require addition packaging at cost of $3 per unit Production cost per unit before taking account of the packaging costs are: prime cost $4 variable production cost: $6 and allocated fixed production overhead: $7 The external market price for components s $25 per unit What price would CE prefer Division C to use when selling components
to Division E? $22
9.Tasty Pty distributes pizza ingredients Its ABC system has 5 activities:
Order processing : $ 40 per order
Line - item ordering : $ 3 per line item
Store deliveries : $ 50 per store delivery
Carton deliveries : $ 1 per carton
Shelf - stocking : $ 16 per stocking - hour
The controller wants to examine the individual customer profitability of two customer :
The carton delivery charge for D Cafe is : $154 = 7 store deliveries*22 average cartons*$1
10 The K operates a standard costing system at 200.000 units of budgeted output The budgeted fixed manufacturing overhead of $ 1,000,000 was $ 300,000 lower than the actual cost (U) Total fixed manufacturing overhead variance was $100,000 unfavorable The actual level of production was : 240,000 units
The total FOH variance = actual cost – applied cost
= 1.300.000 – 1.000.000/200.000*X = 100.000 => X = 240.000 units
11 A budget should /can do all of the following, except
a Become the performance standard against which firms can compare the actual results
b Be prepared by managers from different functional areas working independently of each other
c Be adjusted if new opportunities become available during the year
d Help management allocate limited resources
12 When machine hours are used as cost allocation base, the item most likely to contribute to
an unfavorable variable overhead efficiency variance is:
a Using more machine hours than budgeted
Trang 3b More units being produced than planned
c Unused capacity
d Workers wastefully using variable overhead items
13 Budgeted sales of Y for June are 20,000 units At the end of the production process for Y, 10% of the production units are scrapped as defective Opening inventories of Y for June are budgeted to be 11,000 units and closing inventories will be 9,000 units All inventories of finished goods must have successfully passed the quality control check What is the production budget
for Y in June? 20,000 units
10% scrapped => budget phải là 22,000 để bù scap
Unit produced = 22,000 – 9,000 + 11,000 = 20,000
14 Which of the following statements about transfer pricing is not true?
a If the selling division has spare capacity, the transfer price should be the marginal cost of production
b The most efficient transfer price will be the opportunity cost of the selling division
c If the selling division has no spare capacity, the transfer price should be the marginal cost of production, plus any lost confibution
d The transfer price should match the selling division's cost of capital to customer
15 Tasty Pty distributes pizza ingredients Its ABC system has 5 activities:
Order processing: $40 per order
Line-item ordering: $3 per line item
Store deliveries: $50 per store delivery
Carton deliveries: $1 per carton
Shelf-stocking: $16 per stocking-hour
The controller wants to examine the individual customer profitability of two customer
D Cafe R Pizza
Average line items per order 8 16
Average cartons shipped per store delivery 22 20
Average hours of shelf stocking per store delivery 0 0.5
Average revenue per delivery $2,400 $1,800
Average cost of goods sold per delivery $2,100 $1,650
The line-item ordering cost for R Pizza is: $528 =11 orders*16 line items*$3
16 Which of the following is the advantage of just-in-time control system?
a It is easier to switch suppliers
a Labour becomes less important
b There is a reduced reliance on suppliers
c The quality of production improves
Câu 17: During October, 10,000 direct labor hours were worked at a standard cost of $10 per hour If the direct labor rate variance for October was $4,000 U, the actual cost per direct labor
hour must be: $10.40 AH(AR – SR) = 10,000*(AR – 10) = 4,000 => AR = 10.4
Câu 18:In which of the following situations would the use of the imposed budgets not be appropriate?
a In decentralized organizations and acting autonomously
b In a very small business
Trang 4c During the crisis period when the organization’s survival is challenging
d During the period of economic hardship such as Covid - 19
Câu 19:The S Import is a distributor of blank DVDs M Record purchases blank DVDs from S Import at $5.00 per DVD DVDs are shipped in packages containing 25 DVDs S Import pays all incoming freight M Record has an annual demand of 104,000 (d) blank DVDs Sales are constant at a rate of 2,000 blank DVDs per week M Record earns 15% on is cast investment The purchase order lead time is 1 week Relevant ordering costs per purchase order is $94.50 (c) and carrying costs per package per year $3.50 (h) What is the economic order quantity?
188 packeges
√2 × 2000 × 52 ÷ 25 × 94.5 3.5 + (15% × 5 × 25)
Câu 20:which of the following is the best description of an investment centre?
a a centre in which managers has control over only for finacial outputs in form of generating sales revenue
b a centre in which managers has control over for profit
c a centre in which managers has control over only for costs
d a centre in which mangers has control over for costs, revenues and current as well non - current operating assets
Câu 21: During September, 40,000 units of product were produced The standard quantity of material allowed per unit was 4 pounds at a standard cost of £ 6.00 per pound If there was a unfavorable materials usage variance of £ 30,000 for September, the actual quantity of materials used must be:
165,000 pounds: SP*(AQ – SQ) = 6*(AQ – 4*40,000) = 30,000 => AQ = 165,000
Câu 22: The following dates apply to a specific order processed by B Ltd: Order placed by customer: 27 June; Order received: 2 July; Order placed on production: 5 July; Production commenced: 11 July; Order completed: 17 July; Order delivered to customer: 20 July What is the order receipt time and the waiting time?
The order receipt time: 5 days - the waiting time: 6 days
27/6 – 2/7: 5 days – order receipt time; 5/7 – 11/7: 6 days – waiting time
Câu 23: Company AA uses the residual income method to appraise the performance of divisional managers From the options below, select the FALSE statement in this context
a Residual income can be adjusted to account for different levels of risk
b It is a profit-based measure, so may be subject to accounting manipulation
c It encourages divisional managers to be focused on long-term results
d It favours divisions which have older asset bases
Câu 24: Division Z manufactures chemicals It sells chemicals to the external market at a price
of $22 per litre This provides a contribution/sales ratio of 40% Division X (a separate part of the same group company) requires a regular supply of chemicals in order to manufacture their own products For external sales, variable cost includes $1.20 per litre for extra courier charges These are not applicable to internal sales Z has sufficient capacity to meet all internal and external demand Which price range would maximise profit from the company's perspective?
Trang 5How would Mike rank the three customers?
a Rank 1 - Customer F, Rank 2 - Customer D, Rank 3 - Customer E
b Rank 1 - Customer D, Rank 2 - Customer E, Rank 3 - Customer F
c Rank 1 - Customer F, Rank 2 - Customer E, Rank 3 - Customer D
d Rank 1 - Customer D, Rank 2 - Customer F, Rank 3 - Customer E
Câu 26: Jacko Ltd uses standard absorption costing and the following information was recorded by the company for April:
The fixed overhead volume variance for April was: €2,250 adverse
FOH/u (budget) = $4.5; sales variance = 500 (A) => 500*4.5 = 2,250 (A)
Câu 27: R Plc is preparing its cash budget for next year The estimated accounts payable balance at the beginning of next year is $54,000 The budgeted purchases for next year are
$680,000, occurring evenly throughout the year It is estimated that 75% of purchases will be
on credit and the remainder will be for cash The company pays for credit purchases in the month following purchase The budgeted cash payments to suppliers next year are:
$691,500 = 54,000 + 680,000 – 680,000/12*75%
Câu 28: Which of the following statements about the fixed production overhead volume variance is true?
a It does not exist in a standard marginal costing system
b It is the same in a standard marginal costing system as in a standard absorption costing system
c It is the difference between budgeted overhead expenditure and actual overhead expenditure
d It does not exist in a standard absorption costing system
Trang 6Câu 29: Select the one which would not be an example of an internal failure cost for an organisation
a Re-inspection of goods after defects have been found in production
b Scrap of materials and work-in-progress
c Failure analysis and correction of defects found in production
d Training staff to reduce defects during the production process (prevention cost)
Câu 30: From the options below, select the best explanation of a favourable labour rate variance
a A strike occurred during the production
b All are possible explanations
c There was a general increase in wages
d A lower grade of worker was used
Câu 31: Choose the correct term for the below definition: “A budget set prior to the control period, and not subsequently changed in response to changes in activity or costs or revenues.”
b Both figures do not facilitate comparisons among different divisions
c Both figures do not take into account the cost of capital of an organisation
d Both measures encourage divisional managers to keep a hold of old and possibly inefficient assets
RI and ROI can be manipulated by divisional managers either by manipulating the capital employed or profit figure for a division
ROI encourages managers to keep a hold of old assets, however RI does not have this issue
RI takes into consideration the firm’s cost of capital but the ROI does not
RI does not facilitate comparisons with other divisions or organisations because it is an absolute figure ROI is a relative measure so it can be used to compare the performance of a division against other divisions in the firm
Câu 33: N Plc is a company manufacturing graphics cards for computers and laptops The organisation has recently discovered a new material that significantly increases the capacity of the firm’s cards The organisation has recently filed to get this new technology patent protected From the options below, select the category of the balanced scorecard within which this development fits
a Learning and growth
SR(AH – SH) = 12(AH – 5) = 30,000 => AH = 60,000
AH(AR– SR) = 45,000 = 60,000(AR– 12) => AR = 12.75
Câu 35: Companies employ the strategy of Just-in-Time (JIT) inventory to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs From the options below, select the ONE cost that a company
is likely to reduce by introducing a JIT system
Trang 7a Inventory holding costs
$4 per year Annual demand is 30,000 packages per year The purchase price per package is
$48 What is the annual relevant carrying costs at the economic order quantity? $8,695
𝑄 = √2 ∗ 30,000 ∗ 450
4 + (15% ∗ 48) = 1552 (𝑝𝑎𝑐𝑘𝑎𝑔𝑒𝑠) annual relevant carrying costs = Q/2*(4 + 15%*48) = 8,695
Câu 37: Thomas is the manager of Division Z in a big conglomerate Win Inc Division Z is operating at full capacity and can sell everything produced either internally or externally From the options below, select the basis on which Thomas will fix the transfer price of Division Z
a Current selling price plus opportunity costs
b Full cost plus a mark-up
c Market price
d Variable costing
Câu 38: A Ltd is preparing the master budget for one of their products, the KING product, for the forthcoming year, as follows: Sales demand in units: 50,000; Material usage per unit: 8 kgs; Estimated opening inventory: 10% sales demand; Required closing inventory: 40% higher than opening inventory How many units of the KING product will need to be produced? 52,000
Opening = 5,000; closing = 7,000 => produced = 50,000 + 7,000 – 5,000 = 52,000
Câu 39: The following budgeted information comes from the accounting records as follows:
In a period where the actual sales were 1,900 units, what would be the flexed budget?
$35,500 (chia rồi tính lại tất cả cost theo 1,900 units)
Câu 40: One of the leading managers in Pantheon Ltd is Kari Kari is known for her ability to motivate employees and drive sales in any area she is responsible for Kari’s bonus for this year will depend on her ability to increase the residual income of her area of responsibility What responsibility structure is Kari most likely the manager of? Investment centre
Câu 41: K Corporation has provided the following summary of its quality cost report for the last two years:
Trang 8This year Last year Prevention costs $200,000 $300,000
Appraisal costs 210,000 315,000 Internal failure costs 190,000 114,000 External failure costs 800,000 621,000
On the basis of this report, which one of the following statements is most likely correct?
a All statements are incorrect
b Quality costs such as scrap and rework increased by 29%
(190,000/114,000 = 167% => increase 67%)
c A decrease in internal and external failure costs resulted in less need for prevention and
appraisal costs (thực tế là increase)
d An decrease in prevention and appraisal costs resulted in fewer defects, and therefore, resulted
in a decrease in internal and external failure costs
An decrease in prevention and appraisal costs resulted in HIGHER defects, and therefore,
resulted in a INCREASE in internal and external failure costs
Active hours required = 200*6 = 1,200
20% idle time = 25% active time = 1,200*25% = 300 => total cost = (1,200 + 300)*7 = 10,500
2 Using linear regression, the relationship between the monthly quantity produced (x) and total production cost Có was found to be y = 10,000 + 216x The only variable costs are raw materials and labour Last month, 700 units were made and raw materials cost $150 per unit Labour is paid at $15 per hour Estimate the variable production cost if output is 500 units
$108,000 = 216*500 (vì 10,000 là fixed costs)
3 Each unit of product Echo takes five direct labour hours to make Quality standards are high, and 8% of units are rejected after completion as sub-standard Next month’s budgets are as follows: Opening inventories of finished goods: 3,000 units Planned closing inventories of finished goods: 7,600 units Budgeted sales of Echo: 36,800 units All inventories of finished goods must have successfully passed the quality control check What is the direct labour hours budget for the month? 225,000 hours
Budgeted produced = 36,800 + 7,600 – 3,000 = 41,400
92% of total production, allowing for an 8% rejection rate => 41,400/0.92 = 45,000
direct labour hours budget = 45,000*5 = 225,000 hrs
4 Budgeted sales of X for December are 18,000 units At the end of the production process for
X, 10% of production units are scrapped as defective Opening inventories of X for December are budgeted to be 15,000 units and closing inventories will be 11,400 units All inventories of finished goods must have successfully passed the quality control check What is the production budget for X for December? 16,000 units
Budgeted produced = 18,000 + 11,400 – 15,000 = 14,400
10% of production units are scrapped = 1/9 của output = 14,400/9 = 1,600
=> total = 14,400 + 1,600 =16,000
Trang 95 The finance manager for Halfway Ltd is responsible for preparing the following reports for the firm:
(I) Statement of profit or loss
(II) Statement of financial position
(III) Cash flow forecast for the next 5 years
(IV) Sales budget for the next 5 years
(V) Monthly operating statements for 3 of Halfway’s divisions
Which of these is/are an example of feedforward control? III & IV only
6 Furniture, Inc., estimates the following number of mattress sales for the first four months of 20x6: January: 22,000; February: 30,800; March: 28,600; April: 35,200 Finished goods inventory at the end of December is 6,600 units Target ending finished goods inventory is 20%
of the next month’s sales How many mattresses should be produced in the first quarter of 20x6?
81,840 mattresses = 22,000 + 30,800 + 28,600 + 35,200*20% - 6,600
7 R Plc Is preparing its cash budget for next year The accounts receivable at the beginning of next year are expected to be $46,000 The budgeted sales are $540,000 and will occur evenly throughout the year 80% of the budgeted sales will be on credit and the remainder will be cash sales Credit customers pay in the month following sale The budgeted cash receipts from customers next year are: $550,000 = 540,000 + 46,000 – 540,000/12*80%
8 From the options below, select the purpose of a monthly cash budget
a to determine whether there will be sufficient cash in the bank to meet requirements
b to determine next month’s sales volumes
c to determine the amount of inventory to purchase in the following month
d to determine when to pay workers’ wages
9 Projected sales for Sommers, Inc., for next year and beginning and ending inventory data are as follows: Sales: 50 000 units; Beginning inventory: 4 000 units; Desired ending inventory: 8,000 units The selling price is £40 per unit Each unit requires four pounds of material which costs £6 per pound The beginning inventory of raw materials is 12 000 pounds The company wants to have 3000 pounds of material in inventory at the end of the year Sommers’ budgeted total purchase cost of direct materials would be: £1,242,000
Unit produced = 50,000 + 8,000 – 4,000 = 54,000
=> total materials need = 54,000*4 + 3,000 – 12,000 = 207,000
=> total purchase cost = 207,000*6 = 1,242,000
10 B Corporation is working on its direct labor budget for the next two months Each unit of output requires 0.05 direct labor-hours The direct labor rate is $7.50 per direct labor-hour The production budget calls for producing 9,100 units in May and 8,800 units in June If the direct labor work force is fully adjusted to the total direct labor-hours needed each month, what would be the total combined direct labor cost for the two months?
$6,712.50 = (9,100 + 8,800)*0.05*7.5
11 Which of the following is true of master budgets?
a They aid in quantifying the expectations of all stakeholders
b They include only financial aspects of a plan and exclude nonfinancial aspects
c They aid in coordinating what needs to be done to implement a plan
d They must be administered rigidly after they are committed to
12 Which of the following are most likely to lead to ethical issues when setting and using a
budget?
a The use of interdivisional trade to reduce the tax liability budget for the entire organisation
Trang 10b Internal politics leading to some divisions having more challenging targets than others
c Reducing the quality of the organisation’s products in order to increase profits for the budget period
d Incentivising managers with rewards based on the achievement of non-financial targets
e Reducing learning and development costs in order to satisfy shareholder’s demands for profit maximization
13 From the options below, ONE item that should not be included in the cash budget
a Gain on the disposal of a piece of machinery
b Receipt of interest from short term investments
c Payment of tax due on last year’s profits
d Repayment of the capital amount of a loan
18 The Waverly Company has budgeted sales for next year as follows: Sales in units: 1st Quarter – 12,000; 2nd Quarter – 14,000; 3rd Quarter – 18,000; 4th Quarter – 16,000 The ending inventory of finished goods for each quarter should equal 25% of the next quarter’s budgeted sales in units The finished goods inventory at the start of the year is 3,000 units Scheduled production for the third quarter should be:
17,500 = 18,000 + 16,000*25% - 18,000*25%
19 the one that shows the right combination of financial statements that would be included in
a master budget: A budgeted profit and loss account, balance sheet and cash flow statement
20 The S Company makes and sells a single product, Product R Budgeted sales for May are
$300,000 Gross Margin is budgeted at 30% of sales dollars If the net income for May is budgeted at $40,000, the budgeted selling and administrative expenses are:
$50,000 = 300,000*30% - 40,000
21 From the options below, select the best definition of a flexible budget: A budget which shows
costs and revenues at different activity levels
22 The below details have been extracted from the accounts payable records of Q Plc:
- Invoices paid in the month of purchase*: 15% of total value;
- Invoices paid in the first month after purchase: 65% of total value;
- Invoices paid in the second month after purchase: 20% of total value
This pattern of payments is expected to continue in the future and has been used to produce the company’s cash budget for October to December
Purchases for October to December are budgeted as follows: October: $140,000; November:
$125,000; December: $150,000 *) A settlement discount of 5% is taken on invoices paid in the month
of purchase
The amount budgeted to be paid to suppliers in December is:
$130,625
24 Tucker’s sales budget is as follows: January: €182,000, February: €320,000, March:
€354,000 20% of sales are paid for immediately in cash Of the credit customers, 40% in the month following the sale and are entitled to a 2% discount The remaining customers pay two months after the sale is made What is the value of sales receipts shown in the company’s cash budget for March?
€258,512
25 Which of the below statements are TRUE? (ii) and (iv)
(i) Bottom up budgeting is sometimes referred to as non-participatory budgeting;
(ii) The level of employee involvement in bottom up budgeting is compatible with attitudes towards staff within a traditional just-in-time philosophy;
Trang 11(iii) Management are less likely to be motivated by involvement when consulted in setting their department targets;
(iv) Bottom up budget figures are more likely to be realistic and take into account any new information at the operational level;
(v) Bottom up budgeting is an ideal approach to use when budgeting must be planned and implemented quickly
26 From the options below, select the best definition of the term ZBB (Zero Based Budgeting):
It is a method of budgeting whereby all activities are re-evalulated each time a budget is formulated
27 Castil Corporation makes and sells a product called a Miniwarp One Miniwarp requires 2.5
kilograms of the raw material Jurislon Budgeted production of Miniwarps for the next five months
is as follows: August: 20,00 units, September: 20,900 units, October: 20,800 units; November: 20,600 units, December: 21,300 units The company wants to maintain monthly ending inventories of Jurislon equal to 20% of the following month’s production needs On July 31, this requirement was not met since only 9,700 kilograms of Jurislon were on hand The cost of Jurislon is $5.00 per kilogram The company wants to prepare a Direct Materials Purchase Budget for the next five months
The total cost of Jurislon to be purchased in August is: $253,750
28 The budget where managers must justify all costs based on need is a/ an: zero-based budget
29 R Plc is a specialist manufacturer of a particular type of valve used in pumps Analysis for
the year shows that, when the budgeted level of sales was 15,000 units with a selling price of £250 a unit, the margin of safety was 25% The budgeted contribution to sales ratio of the product was 60%
Budgeted fixed costs for the year were: £1,687,500
30 J Ltd has budgeted production for the next budget period at 50,000 units Each production
unit requires 3 direct labour hours and the budgeted labour hour rate is $10 per hour excluding the overtime The company expects idle time at 20% of the total hours available Due to a labour shortage, the company expects that 30% of the hours paid (including the idle time) will be paid at an overtime
rate of time and a half The budgeted labour cost for the period is: $2,156,250
31 Castil Corporation makes and sells a product called a Miniwarp One Miniwarp requires 2.5
kilograms of the raw material Jurislon Budgeted production of Miniwarps for the next five months
is as follows: August: 20,00 units, September: 20,900 units, October: 20,800 units; November: 20,600 units, December: 21,300 units The company wants to maintain monthly ending inventories of Jurislon equal to 20% of the following month’s production needs On July 31, this requirement was not met since only 9,700 kilograms of Jurislon were on hand The cost of Jurislon is $5.00 per
kilogram The company wants to prepare a Direct Materials Purchase Budget for the next five months
The desired ending inventory of Jurislon for the month of September is:$52,000
32 E Plc is preparing its cash forecast for the next three months From the options below, select the ONE item that should be left out of its calculations
a Receipt of a new bank loan raised for the purpose of purchasing new machinery
b Tax payment due, that relates to last year’s profits
c Expected gain on the disposal of a piece of land
d Rental payment on a leased vehicle
33 A problem with feed-forward control is that control reports should be produced regularly, which
means that forecasts must be updated regularly TO implement a/ an efficient feed-forward control system, it is therefore necessary to have an efficient forecasting system
Trang 12CHƯƠNG 2
1 An unfavorable variance indicates that
a the actual units sold are less than the budgeted units
a the actual costs are less than the budgeted costs
b the budgeted contribution margin is more than the actual amount
c the actual revenues exceed the budgeted revenues
2 An unfavorable price variance for direct materials might indicate
a that the market had an unexpected oversupply of those materials
b that the purchasing manager skillfully negotiated a better purchase price
c that the purchasing manager purchased in smaller quantities due to a change to time inventory methods
just-in-d congestion due to scheduling problems
3.When a flexible budget is used, a decrease in the actual production level within a range of activity would:
a increase variable cost per unit
b decrease variable cost per unit
c decrease total variable costs
d decrease fixed cost per unit
4.Lesinski Snow Removal’s cost formula for its vehicle operating cost is $1,770 per month plus
$483 per snow-day For the month of February, the company planned for activity of 19 snow-days,
but the actual level of activity was 24 snow-days The actual vehicle operating cost for the month was
$13,070 The spending variance for vehicle operating cost in February would be closest to:
for plane operating costs in August was $255,690 The activity variance for plane operating costs
in August would be closest to:
$7,959 U
6.Variance analysis should be used
a to punish employees that do not meet standards
b to understand why variances arise and to improve future performance
c to set the standards which are very easy to achieve to encourage employees to focus on meeting standards
d as the sole source of information for performance evaluation
7 Lander Corporation used the following data to evaluate their current operating system The
company sells items for $18 each and used a budgeted selling price of $18 per unit Units sold: 41,000 units (Actual), 40,000 units (Budgeted); Variable costs: $164,000 (Actual), $156,000 (Budgeted);
Fixed costs: $46,000 (Actual), $48,000 (Budgeted) What is the static-budget variance of
revenues?
$18,000 favorable
8.A company has a policy “investigate all variances exceeding $3,000 or 15% of the budgeted cost, whichever is lower.” There is a variance of $2,000 in repair and maintenance costs of
$12,000 What does the company do in the given situation?
a It should be considered an in-control occurrence
b It should be investigated as all variances are equally important
c It should be ignored as it is less than $3,000
Trang 13d It deserves more attention as it is more than 15% of total repair cost
9.Buckson Framing’s cost formula for its supplies cost is $1,350 per month plus $18 per frame For
the month of June, the company planned for activity of 716 frames, but the actual level of activity
was 713 frames The actual supplies cost for the month was $14,820 The supplies cost in the flexible
budget for June would be closest to:
$14,184
10.Which of the following can be a reason for a favorable price variance for direct materials?
a workers taking less time to produce the products
b a decrease in the price of materials due to an oversupply of materials
c an unexpected increase in the price of materials
d less amount of material used during production than planned for actual output
11.Loughry Catering uses two measures of activity, jobs and meals, in the cost formulas in its
budgets and performance reports The cost formula for catering supplies is $530 per month plus $114 per job plus $16 per meal A typical job involves serving a number of meals to guests at a corporate function or at a host’s home The company expected its activity in October to be 25 jobs and 234 meals, but the actual activity was 20 jobs and 233 meals The actual cost for catering supplies in
October was $6,600 The catering supplies in the flexible budget for October would be closest
to: $6,538
12.The activity measure for overhead allocation should be one:
a that follows a fixed pattern
b that has a magnitude that never changes
c that is always based on units produced, not on hours used
d that varies in a similar pattern to the way that variable overhead varies
13.Regier Company had planned for operating income of $10 million in the master budget but actually achieved operating income of only $7 million
a The static-budget variance for operating income is $3 million unfavorable
b The flexible-budget variance for operating income is $3 million favorable
c The static-budget variance for operating income is $3 million favorable
d The flexible-budget variance for operating income is $3 million unfavorable
14.Gladstone Footwear Corporation’s flexible budget cost formula for supplies, a variable cost, is
$2.83 per unit of output The company’s flexible budget performance report for last month showed a
$9,555 unfavorable spending variance for supplies During that month, 19,500 units were produced
Budgeted activity for the month had been 19,300 units The actual cost per unit for indirect
materials must have been closest to: $3.32
15.Velten Corporation’s flexible budget performance report for last month shows that actual indirect
materials cost, a variable cost, was $45,198 and that the spending variance for indirect materials cost was $9,114 favorable During that month, the company worked 18,600 machine-hours Budgeted
activity for the month had been 19,000 machine-hours The cost formula per machine-hour for
indirect materials cost must have been closest to:
$2.92
16.Reuer Midwifery’s cost formula for its wages and salaries is $2,900 per month plus $475 per birth For the month of March, the company planned for activity of 116 births, but the actual level of activity was 117 births The actual wages and salaries for the month was $56,270 The activity variance for wages and salaries in March would be closest to:
Trang 14$475 U
17 The static budget is always:
a based on a range of activity within which the firm may operate
b based on maximum capacity
c the same as a flexible budget
d based on a specific planned activity level
18 Which of the following statements is true?
a In a normal costing system, standard costs are used for cost control and normal costs are used for product costing
b In a standard costing system, standard costs can only be used for product costing
c In a standard costing system, standard costs are used for both cost control and product costing
d In a standard costing system, standard costs can only be used for cost control
19 An unfavorable efficiency variance for direct manufacturing labor might indicate that
a there is unexpected increase in direct labor rates
b lower-quality materials were purchased
c more higher-skilled workers were scheduled than planned
d work is scheduled inefficiently
20 Lander Corporation used the following data to evaluate their current operating system The
company sells items for $18 each and used a budgeted selling price of $18 per unit Units sold: 41,000 units (Actual), 40,000 units (Budgeted); Variable costs: $164,000 (Actual), $156,000 (Budgeted);
Fixed costs: $46,000 (Actual), $48,000 (Budgeted) What is the static-budget variance of variable
costs?
$8,000 unfavorable
21 Dunklin Medical Clinic measures its activity in terms of patient-visits Last month, the budgeted
level of activity was 1,620 patient-visits and the actual level of activity was 1,540 patient-visits The cost formula for administrative expenses is $3.20 per patient-visit plus $14,300 per month The actual
administrative expense was $21,050 In the clinic’s flexible budget performance report for last month,
the spending variance for administrative expenses was:
$1,822 U
CHƯƠNG 3 1.From the options below, select the statement that best describes a basic standard
a All are incorrect
b A standard which is based on current price levels
c A standard which assumes an efficient level of operation, but which includes allowances for factors such as normal loss, waste and machine downtime
d A standard which is kept unchanged over a period of time
e A standard set at an ideal level, which makes no allowance for normal losses, waste and machine downtime
2 K has the following budget and actual data:
- Budget fixed overhead cost: $1,248,480
- Budget production (units): 20,400
- Budget labour hours: 104,040
- Actual fixed overhead cost: $1,366,620
- Actual production (units): 20,000
- Actual labour hours: 100,000
Trang 15The favourable fixed overhead efficiency variance is - $ _24,000
3 Harvey LTD uses standard absorption costing and in September, the below information was recorded
Budget Actual
Output and sales (units) 13,600 12,400
The sales price variance for September was: $24,800 Favourable
4 4Es Ltd repairs and refinishes antique furniture Manufacturing overhead at 4Es is applied
to production on the basis of standard direct labor-hours
Which overhead variance(s) at 4Es would be unfavorably affected if a significant amount of glue is being wasted by inexperienced direct labor workers? - variable overhead spending variance
Which overhead variance(s) at 4Es would be unfavorably affected if the cost of solvents used to strip the old paint and varnish from the furniture unexpectedly doubles in price? - variable overhead spending variance
Which overhead variance(s) at 4Es would be favorably affected if the actual direct labor-hours incurred are less than the standard direct labor-hours allowed for output? - variable overhead efficiency variance
5 The materials price variance for the month of January was $2,000 (F) and the usage variance was $450 (F) The standard material usage per unit is 6 kg, and the standard material price is $3.00
per kg 600 units were produced in the period and there was no change in inventory levels during the period Material purchases in the period were 3450kg
6 A company operates a standard absorption costing system The following fixed production overhead data are available for the latest period:
- Budgeted Output: 6,000 units
- Budgeted Fixed Production Overhead: £30,000
- Actual Fixed Production Overhead: £39,000
- Fixed Production Overhead Total Variance: £3,000 adverse
The actual level of production for the period was nearest to:
a All are incorrect
b 9,700 units
c 12,000 units
d 7,000 units
e 7,400 units
7 Which of the statement(s) below is/ are correct? (Chọn nhiều đáp án)
a Responsibility for the overhead efficiency variance should be assigned to whoever is responsible for control of the activity base underlying the flexible budget
b A favorable variable overhead efficiency variance indicates that overhead has been used efficiently
c In a standard cost system, overhead is applied on the basis of the actual level of activity rather than the standard level of activity allowed for the output of a period
d The budget variance for fixed overhead represents the difference between actual fixed overhead costs incurred and the amount of fixed overhead applied to work in process
Trang 16e The activity base for a flexible budget should usually be expressed in units of activity rather than in dollars
f The volume variance for fixed overhead is an activity-related variance based on the difference between the denominator level of activity and the standard level of activity allowed for the output of a period
8 Match the variance with its most likely cause: (nối cột trái với 1 trong các đáp án cột phải)
Labour rate variance - Unexpected pay award
Material price variance - standardIncrease in costs charged by a supplier
Favourable labour efficiency variance - Improved operating procedures for assembling workers
Material usage variance - Increased wastage due to a machine malfunction
Adverse variable overhead efficiency variance - Less experienced employees were used than standard
9 L uses a standard costing system The standard cost card for one of its products shows that the
product should use 6 kgs of material P per finished unit, and that the standard price per kg is $6.75
L values its inventory of materials at standard prices
During November x1, when the budgeted production level was 2,000 units, 2,192 units were made The actual quantity of material P used was 13,050 kgs and material L inventories were reduced by
500 kgs The cost of the material L which was purchased was $72,900
The material price and usage variances for November x1 were:
Price variance: -11,812.50 (F) - Usage variance: -688.50 (F)
10
The difference between budgeted and actual fixed overhead expenditure F
The difference between the standard fixed overhead cost specified in the original budget and the same volume of fixed overheads, but at the actual prices incurred F
The difference between the standard fixed overhead cost specified for the production achieved, and the actual fixed overhead cost incurred F
The difference between the budgeted value of the fixed overheads and the standard fixed overheads absorbed by actual production T
11 ABC Ltd's standard cost of material X which is used to assemble their final product is as follows: 4kg @ £3.25 = £13.00 1,500 units were produced for the period This gave a material usage variance of £2,438 adverse, with material stock for the period rising by 800kg
The quantity of material purchased for this period was 7550 kg
12 A labor efficiency debit balance indicates that less labor time was spent on production than was
called for by the standard F
If variable manufacturing overhead is applied based on direct labor-hours, it is impossible to have a favorable labor efficiency variance and unfavorable variable overhead efficiency variance for the same period T
An unfavorable materials quantity variance occurs when the actual quantity used in production is less than the standard quantity allowed for the actual output of the period F
There can be no volume variance for variable overhead T
Ideal standards may be better than practical standards when managers seek continual improvement
F
13 RBK Ltd operates a standard absorption costing system Details of budgeted and actual figures are as follows:
Budget Actual
Trang 17Sales volume (units) 100,000 110,000
Selling price per unit $24 $21
Selling price per unit $17 $13
The favourable sales volume profit variance for the period was $60000
14 Nitche Enterprises has a standard cost system in which manufacturing overhead is applied to
units of product on the basis of standard direct labor-hours (DLHs) The company has provided the following data concerning its fixed manufacturing overhead costs for last year:
- Total actual fixed overhead cost incurred: $42,000
- Fixed overhead cost overapplied: $6,000
- Number of units produced: 12,500
- Volume variance, unfavorable: $3,600
- Standard labor-hours per unit: 1.6 DLHs
The fixed portion of the predetermined overhead rate last year was $2.40 per DLH _
The budgeted fixed overhead cost last year was $51,600 _
The budget variance for fixed overhead last year was $9,600 F
15 Saracens Ltd operates a standard marginal costing system An extract from the standard cost card for the labour costs of one of its products is as follows:
Labour cost (standard): 5 hours x 12 = $60
Actual results for the period were as follows:
Production: 11,500 units
Labour rate variance: $45,000 adverse
Labour efficiency variance: $30,000 adverse
The actual rate paid per direct labour was $ 12.75 _
16 The following data has been extracted from the budget of XL Plc:
Activity (Machine hours) Overhead cost (£)
The overhead expenditure variance was £ 412 Adverse
17 The definition of the “variable production overhead efficiency variance” is set out below with blank sections:
“Measures the difference between the variable overhead cost budget flexed on actual labour hours and the variable overhead cost absorbed by_output produced _.”
18 From the options below, select the one good reason NOT to investigate a variance
a Cost caused by the variance is less than the cost of the investigation
b It would investigate a £15,000 variance if the investigation itself would cost £5,000
c The variation is unexpected and large
d Cost of the investigation is less than the cost caused by variance
e The variation is unexpected and controllable
19 4Es Ltd., uses a standard cost system in which it applies manufacturing overhead to units
of product on the basis of standard direct labor-hours During the month of September, the
company applied $52,000 in fixed manufacturing overhead cost to units of product At the end of the
Trang 18month, manufacturing overhead was overapplied by $3,000 If there was no volume variance in
September, then the budgeted fixed manufacturing overhead cost for the month was $ _52,000
20 At C Company, maintenance is a variable cost that varies directly with machine hours The performance report for June showed that actual maintenance costs totaled $9,600 and that the associated spending variance was $400 unfavorable If 8,000 machine-hours were actually worked during June, the budgeted maintenance cost per machine-hour was:
$1.15
21 J007 is one of many items produced by H's manufacturing division Its standard cost is based
on estimated production of 10,000 units per month The standard cost schedule for one unit of J007 shows that 4 hours of direct labour are required at $10 per labour hour The variable overhead rate is
$3.50 per direct labour hour During November 2018, 11,000 units were produced:
● 56,000 direct labour hours were worked and charged;
● $504,000 was spent on direct labour;
● $220,000 was spent on variable overheads
The direct labour rate variance for the month is $56,000 (F)
22 The budgeted selling price of one of BIS Plc’s range of cookies was $12.00 per packet of
cookies At the beginning of the budget period market prices of sugar increased significantly and BIS Plc decided to increase the selling price of the cookie packet by 10% for the whole period
BIS Plc also decided to increase the amount spent on marketing and as a result actual sales volumes increased to 31,500 packets which was 5% above the budgeted volume The standard contribution per packet was $4.00 However, a contribution of $4.50 per packet was actually achieved
The sales price variance for the period was:
The direct labour efficiency variance was 8,455 ( A )
24 Variable production overhead efficiency variance
The variable overhead cost of any change from the standard level of labour efficiency,
assuming that labour hours are being used the recovery base for variable overheads
Variable production overhead expenditure variance
The variable overhead cost of any change from the standard labour rate per hour, assuming
that labour hours are being used as the recovery base for variable overheads
Varibale production averhead total variance
the difference between the variable overhead that should be used for actual output and
variable production overhead actually used
25 From the options below, select the statement which is not a limitation of standard costing
a Standard costing can not be used in a service environment
b It focuses on quantitative measures rather than qualitative measures
c It can result in a blame culture as department managers are held responsible for variances
d Standard costing can not be used in a service environment
Trang 1926 Which of the following statements about the fixed production overhead volume variance is true?
a It is the difference between budgeted overhead expenditure and actual overhead expenditure
b It does not exist in a standard absorption costing system
c It is the same in a standard marginal costing system as in a standard absorption costing system
d It does not exist in a standard marginal costing system
e All are incorrect
27 J Ltd operates a standard absorption costing system The following fixed production overhead data is available for one month:
● Budgeted output: 200,000 units
● Budgeted fixed production overhead: £1,000,000
● Actual fixed production overhead: £1,300,000
● Total fixed production overhead variance: £100,000 Adverse
The actual level of production was 240,000 units
CHƯƠNG 4
1 From the options below, choose the statements which will be true when performance measurement is most effective
a Internal and external aspects are evaluated together
b Both long-term and short-term objectives are considered
c Managers and divisions are evaluated together
d Only aspects which can be controlled by the manager are evaluated
e Managers and divisions are evaluated separately
2.Which of the following statements are valid criticisms of return on investment (ROI) as a performance measure?
a Its use may discourage investment in new or replacement assets
b The figures needed are not easily available
c ROI performance indicators are less likely to be manipulated than non-financial ones
d It is misleading if used to compare departments with different levels of risk
e It is misleading if used to compare departments with assets of different ages
3.The following information relates to last year's operations at the Paper Division of Double A
Corporation: Minimum required rate of return: 15%
Return on investment (ROI): 18%
Sales: $810,000
Turnover (on operating assets): 5 times
What was the Paper Division's net operating income last year?
ROI = margin x turnover => 18% = margin x 5 => margin = 3.6%
Margin = NOI/sales => NOI = 4.6% x 810,000 = $29,160
4 From the options below, select the ONE statement which is NOT a disadvantage of financial performance measures
non-a Non-financial performance measures can be quantified
b They can be hard to measure
c The causation between non-financial factors and company performance may be incorrectly interpreted
d They can lack comparability due to a diverse range of measures
5 An investment centre has capital employed of $1,500,000 and made a profit before interest
of $280,000 The notional cost of capital is 12% The investment centre has an opportunity to invest
in a new project that requires an investment of $350,000 The project has a life of 5 years and expects
Trang 20cash profits of $80,000 each year It is assumed to charge depreciation on a straight line basis In the
light of the above information, what would be the average ROI with and without the investment
and would the investment centre manager wish to undertake the investment if performance is
judged on the ROI of year 1? Option B
6 From the options below, choose the THREE potential problems associated with the balanced scorecard approach
a Difficulty in interpreting the different figures from the analysis
b It ignores the financial aspects of the business
c It does not provide a single overall measure to assess performance
d Difficulty in deciding on what to measure for non-financial aspects
e It only focuses on the financial aspect of the business
7 General Insurance Corporation (GIC) wants to monitor the customer perspective
From the options below, select the appropriate criteria for GIC to measure and monitor the customer perspective in the context of the balanced scorecard approach
a New insurance products launched in the past 6 months
b Percentage of sales which is repeat business
c The percentage of customers complaining
d Staff turnover percentage
e Earnings per share
Others: Average time to settle insurance claims; Average of satisfaction ratings from customers e.g quality of service from 1-5 (5 being the highest); Percentage market share
8 The R Company's income statement for May is given below:
If sales for Division L increase $30,000 with a $9,000 increase in the Division's traceable fixed expenses, the overall company net operating income should: increase by $3,000
variable expense mới của L = 99,000*(165,000 + 30,000)/165,000 = 117,000
=> total variable expense mới = 117,000 + 54,000 = 171,000
Total Traceable fixed expense mới = 97,000 + 9,000 = 106,000
NOI mới = (300,000 + 30,000) – 171,000 – 106,000 – 25,000 = 28,000
=> NOI tăng 3,000
9 Division A of Aigburth Co is considering a project which will increase annual net profit after tax by $30,000 but will require average inventory levels to increase by $200,000 The current target rate of return on investments is 13% and the imputed interest cost of capital is 12% Based on the ROI and/or RI criteria would the project be accepted?
Chọn cả ROI và RI vì ROI mới = 30/200 = 15% > ROI bđau và > min rate of return = 12%