F2 MOCK

F2 MOCK EXAM1. A company uses a standard absorption costing system. The budgeted grossprofit for a period was＄168,000.Variances for the period were:$Direct costs 8,600 FavFixed production overhead volume 1,260 FavFixed production overhead expenditure 2,980 AdvSales volume profit 4,250 AdvWhat was the actual gross profit for the period?A $173,620B $165,370C $170,630D $174,8802.Current assets comprise inventories of $30,000. Receivables of $280,000and cash of $23,000.Current liabilities comprise payables of $180,000.What is the quick (acid test) ratio (to two decimal places)?A 0.59 C 0.54B 1.85 D 1.683.The following information relates to the last period.Output Labour hours Budgeted 20,000 units 6,000 hoursActual 22,000 units 6,200 hoursWhat was the labour capacity ratio for last period (to the nearest 1%)?A 97% C 106%B 94% D 103%4.The following statements relate to either the net present value (NPV) orinternal rate of return (IRR) methods of investment appraisal.Which statement relates to which method?NPV IRR It indicates how sensitive investment decisions are to achange in interest rates.It can accommodate changes in interest rates over aproject’s life.5. A retailer sells 50,000 units of particular product and demand is eventhroughout the year. The cost of placing each order is ＄5. The cost of holding one unit of the product for one year is estimated at ＄2. The retailer uses the Economic Order Quantity model to determine the order size for this product.What is the total annual cost of ordering and holding this product?＄____________6.Which of the following comparisons is NOT an example ofbenchmarking?A Results of one division with those of anotherB Results of a company with those of a competitorC Actual results to budgeted resultsD Performance of a function with those of experts in the field7.The standard cost of a product is to be reviewed in the period used for thereview, labour efficiency was 110% when the standard for labour was 5.5 hours per unit. It has been decided that this level of labour efficiency will be incorporated into the revised standard hours of the product.What are the revised standard labour hours per unit for the product?A 6.05B 5.00C 5.50D 4.958.Which of the following is a direct cost of a manufacture of a range ofdifferent shoes?A Heating and lighting costs of the factoryB Lubricants for the factory machineryC Royalties paid per unit on a particular shoe designD Wages of the factory supervisor9.The following information relates to a process for the month of December.Opening inventory 200 units (degree of completion 80%) Completed output in December 2,200 unitsClosing inventory 100 units (degree of completion 60%) What are the equivalent units of production for December?A 2,200B 2,300C 2,220D 2,10010.A division has sales for the period of ＄300,000. and makes a gross profitmargin of 25%. Operating expenses for the period are ＄35,000. And net assets are ＄200,000. The division must bear a charge on capital employed of 12%.What is the residual income of the division?$____________________11. Which of the following is a measure of resource utilisation for a busservice?A Number of passenger complaintsB Average revenue per passengerC Number of passengers per journeyD Percentage of arrivals on time12. Which of the following would be a suitable measure of resourceutilization in a bicycle manufacturing company?A Amount spent on component parts in comparison to budgetB Machine hours worked as a percentage of machine hour capacityC Percentage of fulfilled orders for bicycles as compared to orders placedD Number of bicycles returned with faults13.It has been calculated that 5% of material input is lost during production.To which perspective of the balanced scorecard does this measure relate?A Growth C Customer satisfactionB Financial success D Process efficiency14.The management accountant of a company is preparing the master budgefor period (period 5). The company manufactures and sells a single product (P) for which the following budgeted date are provided for the period:Sales demand 9,500 unitsTotal budgeted production cost per unit $46Inventory of product P at the end of period 5 needs to be sufficient 10% of the sales in period 6 when demand is expected to reduce to 9,000 units.What is the value of the total closing finished goods inventory in period 5?$___________________15.A company always maintains a positive cash balance.Which of the following statements relating to the company’s liquidity ratios is/are true?(1) If the accounts payable payment period reduces the acid test (quick)ratio will increase(2) The acid test (quick) ratio will never be higher than the current ratio(3) If the inventory turnover period increases the current ratio will reduceA 1 only C 3 onlyB 1 and 2 D 2 and 316.Crowe Company sells a cleaning service to a government department. Thegovernment department always purchases 160 cleaning hours every week from Crowe Company. Crowe Company works 52 weeks each year.Which TWO of the following statements are correct in this situation?A A flexible budge would ensure better staff motivationB A fixed budge should be used to plan the future resource requirementsC A flexible budge must be prepared each week for control purposesD The fixed budget is suitable for budgetary control17. Which of the following would be considered controllable by aninvestment centre manger in a car manufacturing company?A A decrease in sales volume due to a decrease in product qualityB A decrease in sales volume due to an increase in sales taxesC A decrease in sales volume due to an economic recessionD A decrease in sales volume due to the entry of a new competitor18.Otto Co uses a standard marginal costing system. The accountant has beenasked prepare a report to reconcile budgeted and actual profit.Which TWO of the following will appear in the report?A Fixed overhead expenditure varianceB Sales price varianceC Fixed overhead volume varianceD Sales volume variance valued standard profit margin20.Consider the following statements about bottom-up budgeting.(1) It facilitates information sharing enabling targets to be sent that recognizeoperational constraints(2) Managers are more likely to be committed targets when they have beeninvolved in the target setting processWhich of the above statements is/are correct?A Neither statement is correctB 2 OnlyC 1 OnlyD Both statements are correct21.The material inventory account appears as follows:Material Inventory Account$ Balance b/d 12,300 Bank 34,200$ Work-in-progress 28,400Which of the following statement is correct?A Materials in inventory at the end of the period are valued at ＄12,300B Materials purchased in the period cost ＄28,400C Materials in inventory at the end of period are valued at ＄5,800D Materials issued from stores to production are valued at ＄28,40022.The following numeric values are stored in a computer spreadsheet.A1=2 B1=3 C1=4 D1=2 E1=1Cell F1 contains the formula: = A1+B1*C1/D1-E1What value will be displayed in cell F1?_______________________________23.The production budget for products X and Y for the next period is:Product X 2,100 unitsProduct Y 5,400 unitsThe opening inventories of the two products are expected to be:Product X 320 unitsProduct Y 590 unitsFinished goods inventories of two products at the end of the period are budgeted to be:Product X 10% lower than the opening inventoryProduct Y 630 unitsWhat are the budgeted sales for each product (in units)?A Product X-2,132 Product Y-5,440B Product X-2,068 Product Y-5,440C Product X-2,132 Product Y-5,36024. What is the purpose of value analysis?A To reduce costs to a level agreed by managementB To reduce costs without affecting product performanceC To decide on a strategy for controlling costs using variancesD To control costs so that they remain within budget25.A retailer has sales of ＄620,000. Purchases of ＄440,000. and closinginventory of ＄37,000. There was no opening inventory. Administrative expenses are ＄30,000.What is the gross profit margin (to the nearest whole percent)?A 30%B 29%C 35%D 24%26.A company has the following total cost for different activities levels:Total cost Activity level$ Units120,000 10,000128,000 12,000The variable cost per unit decreases by $1 for unit produced in excess of 15,000 units.What is the total variable cost when the activity level is 18,000 units?A $54,000 C $72,000B $80,000 D $69,00027. Which of the following would be problems when measuring theperformance of a non-frofit seeking publicly funded hospital that does not charge for its services at the point of consumption?(1) Multiple conflicting objective(2) Measuring the value of outputsA 1 only C Neither 1 nor 2B Both 1 and 2 D 2 only28. Are the following statements concerning the reports on variances fromstandard true or false?True False They are used as a control device ○○They are strategic management information ○○29.A divisional manger controls assets valued at ＄600,000. Other assetsvalued at ＄100,000 are traceable to the division but are not controllable by the divisional manager. The controllable profit for the division for a period is ＄80,000. The head office uses an imputed interest rate of 8% in calculating residual income (RI).What is the controllable RI for this division?＄___________________30. Which of the following is a reason for a company to use flexiblebudgeting?A There will be differing sales volumes due to uncertainty in the environmentB Budgeted and actual output levels are invariably the sameC Most of the company’s costs are fixedD It is not possible to distinguish between fixed and variable costs31.Gross wages of direct operatives in a period totaled ＄56,200 includingovertime premium of ＄1,600. Overtime is worked to meet the general needs of the business.What would be the usual bookkeeping entries to clear the wages control account for the period?A Dr Work-in-progress ＄54,600Dr Production overhead ＄1,600Cr Wages control ＄56,200B Dr Work-in-progress ＄56,200Cr Wages control ＄56,200C Dr Wages control ＄56,200Cr Work-in-progress ＄54,600Cr Production overhead ＄1,600D Dr Wages control ＄56,200Cr Work-in-progress ＄56,20032.A firm of accountants charges its clients at an hourly rate. Senior staff arecharged at twice the rate of junior staff. In a period the total amount to be charged to the clients was ＄102,340 and the chargeable staff hours were: Senior staff 440 hoursJunior staff 1,260 hoursWhat is the hourly rate to be charged to clients for senior staff time (to the nearest ＄)A $96 C $48B $120 D $ 6033. Which of the following statements about the master budget is correct?A Preparation of the master budge is usually the last stage after theoperating budgets are agreedB The master budget cannot be amended once preparedC It is the responsibility of the operational manager to agree the masterbudgeD The master budge is always prepared first before the operating budges34.Fixed overhead were absorbed last month using a rate of ＄5.00 per labourhour. Budgeted labour hours were 22,000 and actual labour hours were 24,000. The fixed overhead expenditure variance was ＄6,000 adverse.What was the actual cost of fixed overheads for the month?A ＄114,000B ＄116,000C ＄104,000D ＄126,00035.X Co provides a repair service for domestic appliances. Service engineerstake six months to train. One of X Co’s key performance measures is assessing if their managers have trained sufficient service engineers to help meet customer demand in the next year.Which of the following objectives is this performance measure assessing?A Tactical C CorporateB Strategic D Operational36. Which of the following statements is true about the budget settingprocess?A The budget committee sets the sales budget at the start of the processB Functional budgets should be determined by the accounting staff andthen communicated to functional managesC An accountant’s role should involve the co-ordination of the individualbudgets into the master budgetD The budget manual should be compiled after all the budgets have beenset37.A firm worked on three jobs during a period. Cost details of the jobs are asfollows:Job 1 Job 2 Job 3$ $ $ Opening work-in-progress (WIP) 10,200 24,600 NilDirect material in period 6,700 Nil 11,520 Direct labour in period 5,340 4,760 7,200 Production overheads, which are apportioned to jobs each on the basis of actual direct labour costs, totaled ＄23,355 in the period. Jobs 1 and 2 were completed during the period.What was the value of the closing WIP?＄________________38. Which of the following should be considered when preparing a capitalexpenditure budget?（1）Availability of finance（2）Organisation strategy（3）Timing of investment（4）Viability of investment projectsA 1,2,3 and 4 C 1,2,and 3 onlyB 1 and 4 only D 2,3 and 4 only39.The management of a company face the following decisions:(1) Whether to work overtime this week to complete an order on time(2) Whether to relocate its activities to another country within the next fiveyears(3) How much to allow for advertising expenditure in next year’s budgetWhat is the correct categorization of these decisions?A Strategic:2 Tactical:3 Operational:1B Strategic:1 Tactical:2 Operational:3C Strategic:3 Tactical:2 Operational:1D Strategic:1 Tactical:3 Operational:240. Which of the following factors are likely to result in budgetary slack?(1) A top-down approach to budget setting(2) Full participation in budget settingA Both 1 and 2 C 1 onlyB Neither 1 nor 2 D 2 only41. Which of the following is an ADVANTAGE of the use of return oninvestment for monitoring performance?A It facilitates the comparison of divisions of difference sizesB It gives an absolute measureC I cannot be distorted by inflation because it is a relative measureD It avoids dysfunctional decision-making by divisional managers42. Which TWO of the following are included in an administrationoverheads budget?A Production supervisor’s salaryB Payroll department salariesC Postage and stationeryD Factory rates44. Which TWO of following are the budget committees responsible for?A Planning the strategy of the organizationB Checking budgets are properly coordinatedC Monitoring the budget processD Preparing departmental budgets45. Which of the following is a suitable strategic objective against which aproperty building business’s performance can be measured?A Reduce the cost of the materials used per houseB Attain a 25% market share within City X, within three yearsC Reduce the number of defect doors fitted to 1 unit per 100D Increase design staff training hours by 10% over the next 12 months46.The correlation coefficient between two variables A and B is 0.25.What does this mean about the relationship between variables A and B?A B is 25% of AB A is 25% of BC There is a weak relationship between A and BD There is a strong relationship between A and B47. Which TWO of the following are non-financial indicators that can beused to measure performance?A Profit per product per monthB Non-productive hours per monthC Return per machine per monthD Defects per product per month48.A firm measures labour activity. Information for the last period is as follows:Production budget (in standard units) 5,000Actual production (in standard units) 6,000Actual hours worked 48,000Standard labour hours per unit 10What was the labour efficiency ratio in the last period?A 125% C 120%B 96% D 80%49.The flowing information relates to a restaurant.Customers Total Cost＄200 19,000300 24,000180 18,000What is the variable cost per customer?＄______________50.The following budget for the next period has been based on an output of10,000 units:＄Sales 500,000Variable costs (200,000)Fixed costs (120,000)Profit (180,000)What is the contribution per unit?＄______________Answer:1 262 273 284 295 306 317 328 339 3410 3511 3612 3713 3814 3915 4016 4117 4218 4319 4420 4521 4622 4723 4824 4925 50。