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Fundamentals of Management Accounting Questions 186–190 (page: 39)

Which of the following is not a relevant cost?

A manufacturing company uses an absorption based costing system. At the start of the period they planned to make 30,000 units at a selling price of £900 per unit

Fixed overheads were expected to be £900,000. The variable cost per unit is £300.

At the end of the period actual overheads were £858,000, and 33,000 units were produced, of which 32,000 were sold.

Which of the following statements are TRUE? Select ALL that apply.

Refer to the exhibit.



A company budgeted to provide 700 units of service last period for a budgeted variable overhead cost of $29,400. During the period a total of 790 units of service were provided and the variable overhead cost incurred was $29,660.

For effective control of variable overhead cost which two figures should be compared in the budgetary control statement?

CORRECT TEXT

Refer to the exhibit.


The following data relate to two activity levels of an enquiry-handling centre:

The amount of fixed overheads is:

CORRECT TEXT

Refer to the exhibit.



The following budgetary information is available for a manufacturing company:

A particular cost unit takes 4 machine hours in the machining department and 3 labour hours in each of the assembly and finishing departments.

The overhead cost absorbed per unit is:

Give your answer to 2 decimal places.