QUESTION: 117

A company uses a standard costing system.

The company's sales budget for the latest period includes 1,500 units of a product with a selling price of $400 per unit.

The product has a budgeted contribution to sales ratio of 30%.

Actual sales for the period were 1,630 units at a selling price of $390 per unit.

The actual contribution to sales ratio was 28%.

The sales volume contribution variance for the product for the latest period is:

$15, 600 F
$17, 800 F
$55, 600 F
$32, 900 F

Answer(s): A

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QUESTION: 118

A company's product range includes Product N. The costs relating to Product N are shown below:

The direct labour costs relate to specialists employed to work wholly and exclusively with

Product N.

If the company stopped making Product N, the insurance overhead cost would cease, but overhead cost J would be unaffected. Both overheads are absorbed in direct proportion to material costs.

Which of the following costs should be used in the decision whether to stop making Product N?

$910,100
$850,000
$944,100
$884,000

Answer(s): A

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QUESTION: 119

A manufacturing company uses activity-based costing to charge overheads to its three products. One of the main activities is quality inspection. The cost driver is the number of inspections and the budgeted cost is $211,200.

Additional budgeted data.

What is the budgeted quality inspection cost for a unit of product F?

$6.60
$3.30
$9.60
$4.80

Answer(s): A

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QUESTION: 120

CORRECT TEXT
The manager of a recently opened cafe is deciding how many sandwiches to make each day.

The sandwiches are made in the morning before the cafe opens.

If demand exceeds the number of sandwiches made in the morning no extra sandwiches can be made during the day. Any unsold sandwiches are thrown away at the end of each day.

Daily demand is uncertain but is predicted to be 10, 20, 30 or 40 sandwiches.

The following regret matrix has been prepared:

If the minimax regret criterion is used to make the decision, the manager will choose to make:

20 Sandwiches
22 Sandwiches

Answer(s): A

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QUESTION: 117

QUESTION: 118

QUESTION: 119

QUESTION: 120