Assignment - 1
MA – Management Accounting
Mr. Ghan
Name - ________________________
Student ID - ____________________
E-mail ID - _____________________
Date Submitted - ________________
Date Returned - _________________
MARK - %
MARKER COMMENTS (including areas for improvement)
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1. Which of the following statements about qualities of good information is false?
A It should be relevant for its purposes
B It should be communicated to the right person
C It should be completely accurate
D It should be timely
2. Good information should have certain qualities. Which of the following are qualities of good
information?
1 Complete
2 Extensive
3 Relevant
4 Accurate
A 1, 2 and 3
B 1, 3 and 4
C 2 and 4
D All of them
3. Which of the following would be data rather than information?
A Sales increase/decrease per product in last quarter
B Total sales value per product
C Sales made per salesman as a percentage of total sales
D Sales staff commission as a percentage of total sales
4. The following data relate to the overhead expenditure of a contract cleaners at two activity
levels.
Square metres cleaned 13,500 15,950
Overheads $84,865 $97,850
What is the estimate of the overheads if 18,300 square metres are to be cleaned?
A $96,990
B $110,305
C $112,267
D $115,039
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The following information relates to questions 5 to 9.
Which one of the above graphs illustrates the costs described in questions 5 to 9?
5. A linear variable cost – when the vertical axis represents cost incurred.
A Graph 1
B Graph 2
C Graph 4
D Graph 5
6. A fixed cost – when the vertical axis represents cost incurred.
A Graph 1
B Graph 2
C Graph 3
D Graph 6
7. A linear variable cost – when the vertical axis represents cost per unit.
A Graph 1
B Graph 2
C Graph 3
D Graph 6
8. A semi-variable cost – when the vertical axis represents cost incurred.
A Graph 1
B Graph 2
C Graph 4
D Graph 5
9. A step fixed cost – when the vertical axis represents cost incurred.
A Graph 3
B Graph 4
C Graph 5
D Graph 6
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10. When total purchases of raw material exceed 30,000 units in any one period then all units
purchased, including the initial 30,000, are invoiced at a lower cost per unit.
Which of the following graphs is consistent with the behaviour of the total materials cost in
a period?
11. A company uses an item of inventory as follows.
Purchase price $25 per unit
Annual demand 1,800 units
Ordering cost $32
Annual holding cost $4.50 per unit
EOQ 160 units
What is the minimum total cost assuming a discount of 2% given on orders of 300 and
over?
A $45,720.00
B $44,953.50
C $45,000.00
D $44,967.00
12. A manufacturing company uses 25,000 components at an even rate during a year. Each
order placed with the supplier of the components is for 2,000 components, which is the
economic order quantity.
The company holds a buffer inventory of 500 components. The annual cost of holding one
component in inventory is $2.
What is the total annual cost of holding inventory of the component?
A $2,000
B $2,500
C $3,000
D $4,000
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The following information relates to questions 13 and 14.
G Co makes the following purchases and sales.
1 January Purchases 4,000 units for $10,000
31 January Purchases 1,000 units for $2,000
15 February Sales 3,000 units for $13,000
28 February Purchases 1,500 units for $3,750
14 March Sales 500 units for $1,200
13. At 31 March which of the following closing inventory valuations using FIFO is correct?
A $8,000
B $7,500
C $7,000
D $6,500
14. A wholesaler had opening inventory of 300 units of product Emm valued at $25 per unit at
the beginning of January. The following receipts and sales were recorded during January.
Date 2 Jan 12 Jan 21 Jan 29 Jan
400
Issues 250 200 75
The purchase cost of receipts was $25.75 per unit. Using a weighted average method of
valuation, calculate the value of closing inventory at the end of January.
A $11,550
B $4,492
C $4,192
D $9,550
The following information relates to questions 15 and 16
Budgeted and actual production data for the year that has just ended are as follows.
Product Budgeted production Actual production
Units Standard machine hours Units
W 15,000 3,000 12,000
X 20,000 8,000 25,000
Y 14,000 7,000 16,000
Z 6,000 9,000 5,000
Total machine hours worked in the period amounted to 29,000 hours.
15. What was the capacity ratio in the year, as a percentage to one decimal place?
A 93.1%
B 103.3%
C 105.5%
D 107.4%
16. What was the efficiency ratio in the year, as a percentage to one decimal place?
A 96.2%
B 103.3%
C 103.9%
D 107.4%
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17. In a typical cost ledger, what is the double entry for indirect labour cost incurred?
A DR Wages control CR Overhead control
B DR Admin overhead control CR Wages control
C DR Overhead control CR Wages control
D DR Wages control CR Admin overhead control
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