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Fundamentals of Management Accounting Questions 121–125 (page: 26)

Updated On: 9-Feb-2026

Refer to the exhibit.



PD manufactures a product in a process operation. Normal loss is 5% of input and occurs at the end of the process. The following data is available for the month of August:

Scrapped units have no value.
There was no opening or closing work in progress for August.

What was full cost of output to finished goods in August?

  1. $52,687
  2. $51,764
  3. $53,580
  4. $55,460

Answer(s): D



The correlation coefficient is calculated using which of the following values;

  1. Standard deviation
  2. Mean
  3. Variance
  4. Spread
  5. Mode
  6. Range

Answer(s): A,B



In the context of short term decision making, what is a notional cost?

  1. A cost which cannot be forecast with any degree of certainty
  2. A cost which cannot be measured in financial terms
  3. A cost which reflects the use of resources when no actual cost is incurred
  4. A cost which is already committed and cannot be avoided

Answer(s): C



CORRECT TEXT

Refer to the exhibit.



A project is forecast to generate the following cash flows.

Using three decimal places in all discount factors, the net present value (NPV) for the
project at a cost of capital of 14.5% is (to the nearest $)

  1. $7616

Answer(s): A



CORRECT TEXT

Refer to the exhibit.



The following data refers to a manufacturing process for the month of July:

The work in progress is completed as follows:

(a) 100% for material

(b) 80% for labour

(c) 60% for overhead

The value of the work in progress is:

  1. £2722

Answer(s): A



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