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Free P1 Management Accounting Exam Braindumps (page: 24)

Page 23 of 66
PDF with 260 Questions

The standard output from a joint process is 4,000 litres of Product K, 6,000 litres of Product L and 3,000 litres of Product M.

The total cost of the joint process is $147,000.

The company is now deciding if it should further process Product L.

In the further processing decision the best way to apportion the joint costs to the products
is:

  1. in the ratio of 4:6:3.
  2. in the ratio of the sales value at the split-off point.
  3. in the ratio of the sales value after further processing.
  4. it is not necessary to allocate joint costs in a further processing decision.

Answer(s): D



A manufacturing company has fixed production overhead costs, direct material costs and direct labour costs. The number of units of closing finished goods inventory is lower than the opening inventory.

Which of the following statements is true?

  1. The profit using marginal costing will be higher than if absorption costing is used.
  2. The profit using marginal costing will be higher than if throughput costing is used.
  3. The profit using absorption costing will be higher than if marginal costing is used.
  4. The profit using absorption costing will be higher than if throughput costing is used.

Answer(s): A



A company is bidding to win a special contract.

Which of the following is NOT a relevant cost to the company of undertaking the contract?

  1. The purchase cost of direct materials not currently in inventory.
  2. The cost of hiring a machine which will be hired if the contract is won.
  3. The cost of a training course for staff which will be undertaken if the contract is won.
  4. The depreciation charge on the tools which will be used during the contract.

Answer(s): D



TP makes wedding cakes that are sold to specialist retail outlets which decorate the cakes according to the customers' specific requirements. The standard cost per unit of its most popular cake is as follows:



The general market prices at the time of purchase for Ingredient A and Ingredient B were $23 per kg and $20 per kg respectively.

TP operates a JIT purchasing system for ingredients and a JIT production system; therefore, there was no inventory during the period.

Prepare a statement which reconciles the flexed budget material cost and the actual material cost. Your statement should include the material price planning variances, and the operational variances including material price, material mix and material yield.

What was the material price planning variance for ingredient A?

  1. The Material price planning variance ­ Ingredient A was $73 000 F
  2. The Material price planning variance ­ Ingredient A was $72 000 F
  3. The Material price planning variance ­ Ingredient A was $71 000 F
  4. The Material price planning variance ­ Ingredient A was $75 000 F

Answer(s): B






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