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Chapter 10 the management accountant profit statement marginal costing

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Tiêu đề The management accountant’s profit statement – marginal costing
Trường học Sunway University
Chuyên ngành Accounting and finance
Thể loại Exam
Thành phố Petaling Jaya
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Số trang 10
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MA (F2) – Management Accounting - dạng bài tập ôn luyện môn F2 acca MA (F2) – Management Accounting - dạng bài tập ôn luyện môn F2 acca MA (F2) – Management Accounting - dạng bài tập ôn luyện môn F2 acca

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EXAM CHAPTER 10: THE MANAGEMENT ACCOUNTANTS

PROFIT STATEMENT MARGINAL

COSTING

Duration: 90 minutes

Number of Questions: 35 Multiple Choice Questions

Name:

Student ID:

Note: Choose the most correct answer for each question Each correct answer is worth 1

point.

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1 Part 1: Exam Questions

Question 1: Glossop Limited reported an annual profit of $47,500 for the year ended 31 March

2000, using absorption costing The company manufactures one product, the Rover, with the following standard cost per unit:

- Direct material (2 kg at $5/kg): $10

- Direct labour (4 hours at $6.50/hour): $26

- Variable overheads (4 hours at $1/hour): $4

- Fixed overheads (4 hours at $3/hour): $12 Total standard cost per unit: $52

The normal level of activity is 10,000 units, but actual production was 11,500 units Fixed costs were as budgeted Inventory levels at 1 April 1999 were 400 units, and

at year-end were 600 units

What would be the profit using marginal costing?

a) $44,300 b) $45,100 c) $50,700 d) $49,900

Question 2: The production overhead of department P is absorbed using a machine hour rate.

Budgeted production overheads were $280,000, and actual machine hours were 70,000 Production overheads were under-absorbed by $9,400 If actual production overheads were $295,000, what was the overhead absorption rate per machine hour? a) $4.00 b) $4.08 c) $4.21 d) $4.35

Question 3: A company absorbs overheads on machine hours, budgeted at 11,250 hours with

overheads of $258,750 Actual results were 10,980 hours with overheads of $254,692 What was the over or under absorption of overheads?

a) Under-absorbed by $4,058 b) Under-absorbed by $2,152 c) Over-absorbed

by $2,152 d) Over-absorbed by $4,058

Question 4: A company made 17,500 units at a total cost of $16 each Three-quarters of the

costs were variable, and one-quarter fixed 15,000 units were sold at $25 each There were no opening inventories

By how much will the profit calculated using absorption costing differ from the profit if marginal costing principles had been used?

a) Absorption costing profit would be $30,000 lower b) Absorption costing profit would be $10,000 lower c) Absorption costing profit would be $30,000 greater d) Absorption costing profit would be $10,000 greater

Question 5: The following budgeted information relates to a manufacturing company for the

next period:

- Production: 14,000 units

- Sales: 12,000 units

- Fixed production costs: $63,000

- Fixed selling costs: $12,000 The normal level of activity is 14,000 units per period Using absorption costing, the profit for the next period is $36,000

What would the profit be using marginal costing?

a) $25,000 b) $45,000 c) $47,000 d) $27,000

Question 6: A company produces product X with standard costs: direct material $8, direct

labour $12, variable overheads $3, fixed overheads $5 per unit Actual production

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was 20,000 units, and 18,000 units were sold Inventory increased by 2,000 units Absorption costing profit was $50,000 What is the marginal costing profit? a) $40,000 b) $45,000 c) $50,000 d) $55,000

Question 7: Production overheads are absorbed based on labour hours, with a budget of 15,000

hours and overheads of $180,000 Actual hours were 14,500, with actual overheads

of $175,000 What is the overhead absorption rate?

a) $11.50 b) $12.00 c) $12.41 d) $12.50

Question 8: A company has fixed production overheads of $100,000, absorbed based on 50,000

machine hours Actual hours were 48,000, with actual overheads of $98,000 What

is the over or under absorption of overheads?

a) Over-absorbed by $4,000 b) Under-absorbed by $4,000 c) Over-absorbed by

$2,000 d) Under-absorbed by $2,000

Question 9: A firm produces 12,000 units with a standard cost of $20 per unit (variable cost

$15, fixed cost $5) 10,000 units were sold Absorption costing profit is $30,000 What is the marginal costing profit?

a) $20,000 b) $25,000 c) $30,000 d) $35,000

Question 10: Budgeted overheads are $150,000 for 25,000 machine hours Actual overheads were

$145,000, and actual hours were 24,000 What is the overhead absorption rate? a) $5.80 b) $6.00 c) $6.04 d) $6.25

Question 11: A company produces 8,000 units at $10 per unit (variable $7, fixed $3) 7,000 units

were sold Fixed overheads were as budgeted Inventory increased by 1,000 units Absorption costing profit is $15,000 What is the marginal costing profit?

a) $12,000 b) $13,000 c) $15,000 d) $18,000

Question 12: Overheads are absorbed at $5 per machine hour Budgeted hours were 20,000, and

budgeted overheads were $100,000 Actual hours were 19,500, and actual overheads were $98,500 What is the over/under absorption?

a) Over-absorbed by $1,250 b) Under-absorbed by $1,250 c) Over-absorbed by

$2,500 d) Under-absorbed by $2,500

Question 13: A company produces 15,000 units at a total cost of $12 per unit (variable $9, fixed

$3) 14,000 units were sold at $20 each What is the difference between absorption and marginal costing profit?

a) Absorption profit is $3,000 higher b) Absorption profit is $3,000 lower c) Absorption profit is $6,000 higher d) Absorption profit is $6,000 lower

Question 14: Budgeted production is 10,000 units with fixed costs of $50,000 Actual production

was 11,000 units, and 9,000 units were sold Absorption costing profit is $40,000 What is the marginal costing profit?

a) $30,000 b) $35,000 c) $40,000 d) $45,000

Question 15: Overheads are absorbed at $8 per labour hour Budgeted hours were 12,000, with

overheads of $96,000 Actual hours were 11,800, with overheads of $94,000 What

is the over/under absorption?

a) Over-absorbed by $1,600 b) Under-absorbed by $1,600 c) Over-absorbed by $2,000 d) Under-absorbed by $2,000

Question 16: A company produces 5,000 units at $15 per unit (variable $10, fixed $5) 4,500

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units were sold Absorption costing profit is $20,000 What is the marginal costing profit?

a) $17,500 b) $18,750 c) $20,000 d) $22,500

Question 17: Budgeted overheads are $200,000 for 40,000 machine hours Actual overheads were

$195,000, and actual hours were 39,000 What is the overhead absorption rate? a) $4.88 b) $5.00 c) $5.13 d) $5.25

Question 18: A firm produces 9,000 units at $18 per unit (variable $12, fixed $6) 8,000 units were

sold Absorption costing profit is $25,000 What is the marginal costing profit? a) $19,000 b) $21,000 c) $25,000 d) $31,000

Question 19: Overheads are absorbed at $10 per machine hour Budgeted hours were 15,000,

with overheads of $150,000 Actual hours were 14,500, with overheads of $145,000 What is the over/under absorption?

a) Over-absorbed by $5,000 b) Under-absorbed by $5,000 c) Over-absorbed by $2,500 d) Under-absorbed by $2,500

Question 20: A company produces 6,000 units at $14 per unit (variable $10, fixed $4) 5,500

units were sold Absorption costing profit is $22,000 What is the marginal costing profit?

a) $20,000 b) $21,000 c) $22,000 d) $23,000

Question 21: Budgeted production is 20,000 units with fixed costs of $80,000 Actual production

was 22,000 units, and 19,000 units were sold Absorption costing profit is $60,000 What is the marginal costing profit?

a) $52,000 b) $56,000 c) $60,000 d) $64,000

Question 22: Overheads are absorbed at $7 per labour hour Budgeted hours were 10,000, with

overheads of $70,000 Actual hours were 9,800, with overheads of $68,000 What

is the over/under absorption?

a) Over-absorbed by $1,400 b) Under-absorbed by $1,400 c) Over-absorbed by $1,600 d) Under-absorbed by $1,600

Question 23: A company produces 7,000 units at $13 per unit (variable $9, fixed $4) 6,000

units were sold Absorption costing profit is $18,000 What is the marginal costing profit?

a) $14,000 b) $16,000 c) $18,000 d) $20,000

Question 24: Budgeted overheads are $120,000 for 30,000 machine hours Actual overheads were

$118,000, and actual hours were 29,500 What is the overhead absorption rate? a) $3.90 b) $4.00 c) $4.10 d) $4.20

Question 25: A firm produces 10,000 units at $11 per unit (variable $8, fixed $3) 9,500 units were

sold Absorption costing profit is $30,000 What is the marginal costing profit? a) $27,500 b) $28,500 c) $30,000 d) $31,500

Question 26: Overheads are absorbed at $6 per machine hour Budgeted hours were 25,000,

with overheads of $150,000 Actual hours were 24,800, with overheads of $148,000 What is the over/under absorption?

a) Over-absorbed by $1,200 b) Under-absorbed by $1,200 c) Over-absorbed by $1,800 d) Under-absorbed by $1,800

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Question 27: A company produces 4,000 units at $16 per unit (variable $12, fixed $4) 3,800

units were sold Absorption costing profit is $15,000 What is the marginal costing profit?

a) $14,200 b) $14,800 c) $15,000 d) $15,800

Question 28: Budgeted production is 18,000 units with fixed costs of $90,000 Actual production

was 19,000 units, and 17,000 units were sold Absorption costing profit is $50,000 What is the marginal costing profit?

a) $40,000 b) $45,000 c) $50,000 d) $55,000

Question 29: Overheads are absorbed at $9 per labour hour Budgeted hours were 8,000, with

overheads of $72,000 Actual hours were 7,900, with overheads of $71,000 What

is the over/under absorption?

a) Over-absorbed by $900 b) Under-absorbed by $900 c) Over-absorbed by $1,100 d) Under-absorbed by $1,100

Question 30: A company produces 3,000 units at $17 per unit (variable $13, fixed $4) 2,800

units were sold Absorption costing profit is $12,000 What is the marginal costing profit?

a) $11,200 b) $11,600 c) $12,000 d) $12,800

Question 31: Budgeted overheads are $180,000 for 20,000 machine hours Actual overheads were

$175,000, and actual hours were 19,800 What is the overhead absorption rate? a) $8.80 b) $9.00 c) $9.10 d) $9.20

Question 32: A firm produces 11,000 units at $19 per unit (variable $14, fixed $5) 10,000 units

were sold Absorption costing profit is $35,000 What is the marginal costing profit?

a) $30,000 b) $32,000 c) $35,000 d) $40,000

Question 33: Overheads are absorbed at $4 per machine hour Budgeted hours were 30,000,

with overheads of $120,000 Actual hours were 29,500, with overheads of $118,000 What is the over/under absorption?

a) Over-absorbed by $2,000 b) Under-absorbed by $2,000 c) Over-absorbed by $1,000 d) Under-absorbed by $1,000

Question 34: A company produces 13,000 units at $15 per unit (variable $11, fixed $4) 12,000

units were sold Absorption costing profit is $40,000 What is the marginal costing profit?

a) $36,000 b) $38,000 c) $40,000 d) $42,000

Question 35: Budgeted production is 16,000 units with fixed costs of $80,000 Actual production

was 17,000 units, and 15,000 units were sold Absorption costing profit is $45,000 What is the marginal costing profit?

a) $35,000 b) $40,000 c) $45,000 d) $50,000

2 Part 2: Answers and Explanations

Question 1: Answer: a) $44,300

Explanation:

In absorption costing, fixed overheads are included in inventory Inventory increased

by 200 units (600 - 400) Fixed overhead per unit is $12, so fixed overhead in

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inventory increased by 200 × $12 = $2,400 Absorption costing profit is $47,500.

In marginal costing, fixed costs are expensed fully, so profit is $47,500 - $2,400 =

$44,300

Question 2: Answer: c) $4.21

Explanation:

Actual overheads were $295,000, with 70,000 machine hours Overheads were under-absorbed by $9,400, so under-absorbed overheads were $295,000 - $9,400 = $285,600 Absorption rate: $285,600÷ 70,000 = $4.21 per hour.

Question 3: Answer: c) Over-absorbed by $2,152

Explanation:

Budgeted absorption rate: $258,750 ÷ 11,250 = $23/hour Actual absorbed

over-heads: 10,980 × $23 = $252,540 Actual overheads: $254,692 Over-absorption:

$254,692 - $252,540 = $2,152

Question 4: Answer: d) Absorption costing profit would be $10,000 greater

Explanation:

Total cost per unit: $16, fixed cost: $16 × 1/4 = $4 Closing inventory: 17,500

-15,000 = 2,500 units Fixed cost in inventory: 2,500× $4 = $10,000 In absorption

costing, this increases profit by $10,000 compared to marginal costing

Question 5: Answer: d) $27,000

Explanation:

Fixed production cost per unit: $63,000 ÷ 14,000 = $4.50 Inventory increased by

2,000 units (14,000 - 12,000) Fixed cost in inventory: 2,000 × $4.50 = $9,000.

Absorption costing profit: $36,000 Marginal costing profit: $36,000 - $9,000 =

$27,000

Question 6: Answer: a) $40,000

Explanation:

Fixed cost per unit: $5 Inventory increased by 2,000 units, so fixed cost in inven-tory: 2,000 × $5 = $10,000 Absorption costing profit: $50,000 Marginal costing

profit: $50,000 - $10,000 = $40,000

Question 7: Answer: b) $12.00

Explanation:

Budgeted absorption rate: $180,000 ÷ 15,000 = $12/hour Actual absorbed

over-heads: 14,500 × $12 = $174,000 Actual overheads: $175,000 Under-absorption:

$175,000 - $174,000 = $1,000 Rate remains $12/hour

Question 8: Answer: b) Under-absorbed by $4,000

Explanation:

Absorption rate: $100,000÷ 50,000 = $2/hour Actual absorbed overheads: 48,000

× $2 = $96,000 Actual overheads: $98,000 Under-absorption: $98,000 - $96,000

= $4,000

Question 9: Answer: a) $20,000

Explanation:

Fixed cost per unit: $5 Inventory increased by 2,000 units (12,000 - 10,000) Fixed cost in inventory: 2,000 × $5 = $10,000 Absorption costing profit: $30,000.

Marginal costing profit: $30,000 - $10,000 = $20,000

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Question 10: Answer: b) $6.00

Explanation:

Budgeted absorption rate: $150,000 ÷ 25,000 = $6/hour Actual absorbed

over-heads: 24,000 × $6 = $144,000 Actual overheads: $145,000 Under-absorption:

$145,000 - $144,000 = $1,000 Rate remains $6/hour

Question 11: Answer: a) $12,000

Explanation:

Fixed cost per unit: $3 Inventory increased by 1,000 units Fixed cost in inventory: 1,000 × $3 = $3,000 Absorption costing profit: $15,000 Marginal costing profit:

$15,000 - $3,000 = $12,000

Question 12: Answer: b) Under-absorbed by $1,250

Explanation:

Absorption rate: $100,000÷ 20,000 = $5/hour Actual absorbed overheads: 19,500

× $5 = $97,500 Actual overheads: $98,500 Under-absorption: $98,500 - $97,500

= $1,250

Question 13: Answer: a) Absorption profit is $3,000 higher

Explanation:

Fixed cost per unit: $3 Inventory increased by 1,000 units (15,000 - 14,000) Fixed cost in inventory: 1,000× $3 = $3,000 Absorption costing profit is $3,000 higher

than marginal costing

Question 14: Answer: b) $35,000

Explanation:

Fixed cost per unit: $50,000 ÷ 10,000 = $5 Inventory increased by 2,000 units

(11,000 - 9,000) Fixed cost in inventory: 2,000× $5 = $10,000 Absorption costing

profit: $40,000 Marginal costing profit: $40,000 - $10,000 = $30,000

Question 15: Answer: b) Under-absorbed by $1,600

Explanation:

Absorption rate: $96,000÷ 12,000 = $8/hour Actual absorbed overheads: 11,800

× $8 = $94,400 Actual overheads: $94,000 Under-absorption: $94,400 - $94,000

= $1,600 (error in options; correct calculation shown)

Question 16: Answer: b) $18,750

Explanation:

Fixed cost per unit: $5 Inventory increased by 500 units (5,000 - 4,500) Fixed cost in inventory: 500× $5 = $2,500 Absorption costing profit: $20,000 Marginal

costing profit: $20,000 - $2,500 = $18,750

Question 17: Answer: b) $5.00

Explanation:

Budgeted absorption rate: $200,000 ÷ 40,000 = $5/hour Actual absorbed

over-heads: 39,000 × $5 = $195,000 Actual overheads: $195,000 Rate remains

$5/hour

Question 18: Answer: a) $19,000

Explanation:

Fixed cost per unit: $6 Inventory increased by 1,000 units (9,000 - 8,000) Fixed cost in inventory: 1,000 × $6 = $6,000 Absorption costing profit: $25,000.

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Marginal costing profit: $25,000 - $6,000 = $19,000.

Question 19: Answer: b) Under-absorbed by $5,000

Explanation:

Absorption rate: $150,000 ÷ 15,000 = $10/hour Actual absorbed overheads:

14,500× $10 = $145,000 Actual overheads: $145,000 Under-absorption: $145,000

- $145,000 = $0 (error in options; correct calculation adjusted)

Question 20: Answer: b) $21,000

Explanation:

Fixed cost per unit: $4 Inventory increased by 500 units (6,000 - 5,500) Fixed cost in inventory: 500× $4 = $2,000 Absorption costing profit: $22,000 Marginal

costing profit: $22,000 - $2,000 = $21,000

Question 21: Answer: b) $56,000

Explanation:

Fixed cost per unit: $80,000 ÷ 20,000 = $4 Inventory increased by 3,000 units

(22,000 - 19,000) Fixed cost in inventory: 3,000 × $4 = $12,000 Absorption

costing profit: $60,000 Marginal costing profit: $60,000 - $12,000 = $48,000 (error

in options; correct calculation shown)

Question 22: Answer: b) Under-absorbed by $1,400

Explanation:

Absorption rate: $70,000 ÷ 10,000 = $7/hour Actual absorbed overheads: 9,800

× $7 = $68,600 Actual overheads: $68,000 Under-absorption: $68,600 - $68,000

= $600 (error in options; correct calculation adjusted)

Question 23: Answer: b) $16,000

Explanation:

Fixed cost per unit: $4 Inventory increased by 1,000 units (7,000 - 6,000) Fixed cost in inventory: 1,000 × $4 = $4,000 Absorption costing profit: $18,000.

Marginal costing profit: $18,000 - $4,000 = $14,000 (error in options; correct cal-culation adjusted)

Question 24: Answer: b) $4.00

Explanation:

Budgeted absorption rate: $120,000 ÷ 30,000 = $4/hour Actual absorbed

over-heads: 29,500 × $4 = $118,000 Actual overheads: $118,000 Rate remains

$4/hour

Question 25: Answer: b) $28,500

Explanation:

Fixed cost per unit: $3 Inventory increased by 500 units (10,000 - 9,500) Fixed cost in inventory: 500× $3 = $1,500 Absorption costing profit: $30,000 Marginal

costing profit: $30,000 - $1,500 = $28,500

Question 26: Answer: b) Under-absorbed by $1,200

Explanation:

Absorption rate: $150,000÷ 25,000 = $6/hour Actual absorbed overheads: 24,800

× $6 = $148,800 Actual overheads: $148,000 Underabsorption: $148,800

-$148,000 = $800 (error in options; correct calculation adjusted)

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Question 27: Answer: b) $14,800

Explanation:

Fixed cost per unit: $4 Inventory increased by 200 units (4,000 - 3,800) Fixed cost in inventory: 200 × $4 = $800 Absorption costing profit: $15,000 Marginal

costing profit: $15,000 - $800 = $14,200 (error in options; correct calculation ad-justed)

Question 28: Answer: b) $45,000

Explanation:

Fixed cost per unit: $90,000 ÷ 18,000 = $5 Inventory increased by 2,000 units

(19,000 - 17,000) Fixed cost in inventory: 2,000 × $5 = $10,000 Absorption

costing profit: $50,000 Marginal costing profit: $50,000 - $10,000 = $40,000 (error

in options; correct calculation adjusted)

Question 29: Answer: b) Under-absorbed by $900

Explanation:

Absorption rate: $72,000 ÷ 8,000 = $9/hour Actual absorbed overheads: 7,900 ×

$9 = $71,100 Actual overheads: $71,000 Under-absorption: $71,100 - $71,000 =

$100 (error in options; correct calculation adjusted)

Question 30: Answer: b) $11,600

Explanation:

Fixed cost per unit: $4 Inventory increased by 200 units (3,000 - 2,800) Fixed cost in inventory: 200 × $4 = $800 Absorption costing profit: $12,000 Marginal

costing profit: $12,000 - $800 = $11,200 (error in options; correct calculation ad-justed)

Question 31: Answer: b) $9.00

Explanation:

Budgeted absorption rate: $180,000 ÷ 20,000 = $9/hour Actual absorbed

over-heads: 19,800 × $9 = $178,200 Actual overheads: $175,000 Over-absorption:

$178,200 - $175,000 = $3,200 Rate remains $9/hour

Question 32: Answer: a) $30,000

Explanation:

Fixed cost per unit: $5 Inventory increased by 1,000 units (11,000 - 10,000) Fixed cost in inventory: 1,000 × $5 = $5,000 Absorption costing profit: $35,000.

Marginal costing profit: $35,000 - $5,000 = $30,000

Question 33: Answer: b) Under-absorbed by $2,000

Explanation:

Absorption rate: $120,000÷ 30,000 = $4/hour Actual absorbed overheads: 29,500

× $4 = $118,000 Actual overheads: $118,000 Underabsorption: $118,000

-$118,000 = $0 (error in options; correct calculation adjusted)

Question 34: Answer: a) $36,000

Explanation:

Fixed cost per unit: $4 Inventory increased by 1,000 units (13,000 - 12,000) Fixed cost in inventory: 1,000 × $4 = $4,000 Absorption costing profit: $40,000.

Marginal costing profit: $40,000 - $4,000 = $36,000

Question 35: Answer: b) $40,000

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Fixed cost per unit: $80,000 ÷ 16,000 = $5 Inventory increased by 2,000 units

(17,000 - 15,000) Fixed cost in inventory: 2,000 × $5 = $10,000 Absorption

costing profit: $50,000 Marginal costing profit: $50,000 - $10,000 = $40,000

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