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NEW QUESTION 150
Which of the following would NOT require taking into account the time value of money?
- A. Selecting an investment project on the basis that it has a positive net present value (NPV).
- B. Calculating the present value of a five-year annuity.
- C. Deciding to make a long-term investment in a project on the basis of its payback period.
- D. Taking a long-term investment decision on the basis of the project's internal rate of return (IRR).
Answer: B
Explanation:
Reference: https://www.acowtancy.com/textbook/acca-fm/d1-investment-appraisal-techniques/npv/notes
NEW QUESTION 151
Refer to the exhibit.
SP, a manufacturing company, uses a standard costing system. The standard variable production overhead cost is based on the following budgeted figures for the year:
During the month of September, 5,300 actual hours were worked and 5,600 standard hours of output were produced. Total variable production overhead costs in September were $8,600.
What was the variable overhead efficiency variance in September?
- A. $650 favorable
- B. $450 adverse
- C. $450 favorable
- D. $650 adverse
Answer: C
NEW QUESTION 152
Which of the following statements about batch costing is true?
- A. The cost of a unit is found by dividing the cost of a batch by the number of units in the batch.
- B. Batch costing must use absorption costing.
- C. Batch costing must use marginal costing.
- D. The cost of a batch is found by multiplying the cost of one unit by the number of units in the batch.
Answer: A
NEW QUESTION 153
Refer to the exhibit.
ZAP publishes a monthly magazine aimed at the teenage market. It has drawn up a budget for next year as follows:
What selling price would be required for ZAP to break even?
- A. $1.65
- B. $0.80
- C. $1.25
- D. $1.20
Answer: A
NEW QUESTION 154
Refer to the exhibit.
A company manufactures a single product, and relevant data is as follows:
Note. Overheads are assumed to be related to direct labor hours.
The actual results for the period were as follows:
What is the variable overhead efficiency variance?
- A. £6,500 favorable
- B. £7,500 favorable
- C. £6,500 adverse
- D. £7,500 adverse
Answer: D
NEW QUESTION 155
Refer to the exhibit.
Budget information for 'Cast Engineering' is as follows:
The budget cost allowance for an output of 1,300 units is:
Answer:
Explanation:
£52490
NEW QUESTION 156
A company that uses standard costing wishes to reconcile the difference between the profit for a period calculated using absorption costing with that calculated using marginal costing.
Which TWO of the following will NOT help with this reconciliation?
- A. The fixed production overhead absorption rate.
- B. The under or over absorbed fixed production overheads.
- C. The opening inventory.
- D. The actual fixed production overheads.
- E. The closing inventory.
Answer: B,E
NEW QUESTION 157
Refer to the exhibit.
The following standard cost information relates to the production department of Brace Engineering Ltd.
The actual data for the month of March was as follows:
What is the direct labour rate variance (to the nearest whole number)?
- A. £2,656 adverse
- B. £2,500 favourable
- C. £2,500 adverse
- D. £2,656 favourable
Answer: C
NEW QUESTION 158
The staffing policy for a supermarket is to have one cashier station open for every forecasted 20 customers per hour. Cashiers are hired by the hour as and when required, and do not perform any other duties.
The cost of the cashiers in relation to the number of customers would be classified as which type of cost?
- A. Semi-variable cost
- B. Fixed cost
- C. Variable cost
- D. Stepped fixed cost
Answer: B
NEW QUESTION 159
A profit margin of 20% of sales is the same as a profit on total cost of:
Give your answer to 2 decimal places.
Answer:
Explanation:
25%
NEW QUESTION 160
Which of these descriptions most accurately describes a cost centre?
- A. A cost centre is a location where all costs across the company are consolidated into one account.
- B. A cost centre is an office where costs for a specific activity are stored.
- C. A cost centre is a location where all costs relating to certain activities and functions are stored.
Answer: C
NEW QUESTION 161
An organisation produces and sells a single product. The organisation's management accountant has reported the following information for the most recent period.
Which TWO of the following statements are valid? (Choose two.)
- A. If the contribution to sales ratio changed to 30%, the breakeven point would become higher.
- B. If the variable cost changed to $16 per unit, the breakeven point would become lower.
- C. If the selling price changed to $22 per unit, the breakeven point would become lower.
- D. If the sales volume changed to 220,000 units, the breakeven point would not change.
- E. If the fixed cost changed to $445,000, the breakeven point would not change.
Answer: A,D
NEW QUESTION 162
The International Federation of Accountants (IFAC) stated that it was important that "accountants in business" should understand what the drivers of stakeholder value are. Which of the following statements is valid?
- A. Only an organisation's shareholders and employees can be considered to be its stakeholders.
- B. Anyone with an interest in an organisation can be considered to be one of its stakeholders.
- C. Only an organisation's shareholders can be considered to be its stakeholders.
- D. Stakeholders must be external to the organisation.
Answer: C
NEW QUESTION 163
Refer to the exhibit.
BF plc manufactures and sells a single product. Budgeted figures for next year are as follows:
BF plc is considering increasing its selling price by 5%. It is anticipated that fixed costs, variable costs per unit and sales volume will remain unchanged.
What would be the effect on BF plc's contribution if selling prices are increased?
- A. An increase of 25%
- B. An increase of 20%
- C. An increase of 5%
- D. An increase of 12.5%
Answer: D
NEW QUESTION 164
Refer to the exhibit.
Which is the correct journal entry required to record an adverse labour rate variance in an integrated accounting system?
The correct journal entry required to record an adverse labour rate variance in an integrated accounting system is:
- A. D
- B. A
- C. B
- D. C
Answer: B
NEW QUESTION 165
Refer to the exhibit.
The standard variable cost per unit of Product W is $26. The budgeted sales of Product W in April was 3,300 units. The company recorded the following variances for the month of April:
During April 3,600 units of Product W were actually sold.
What was the actual sales revenue for Product W in April?
- A. $111,300
- B. $115,200
- C. $111,900
- D. $108,000
Answer: A
NEW QUESTION 166
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