QUESTION: 193 Exam Topic: 2, Exam Pool B

CORRECT TEXT

Refer to the exhibit.

The standard labour cost per unit of product 'B' is $24 (6 hours @ $4 per hour).
During period 5 the following details were recorded:

The output during period 5 was

336 units of product 'B'.

Answer(s): A

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QUESTION: 194 Exam Topic: 2, Exam Pool B

When making a decision, for a cost or revenue to be classified as "relevant" it must be:

(a) Incremental

(b) Notional

(c) Cash

(d) Future

(a), (b) and (c) only
(a), (b) and (d) only
(a), (c) and (d) only
(b), (c) and (d) only

Answer(s): C

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QUESTION: 195 Exam Topic: 2, Exam Pool B

Which of the following are not advantages of Absorption costing? (Select ALL that apply.)

The key benefit of absorption costing is that it recognises both fixed and variable overheads are necessary for production to occur.
The key benefit of absorption costing is that it cannot be manipulated by production changes.
The key benefit of absorption is that it helps management in making short term decisions.

Answer(s): B,C

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