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1 .Which of the following would NOT be classified as a service cost centre in amanufacturing company?
A Product inspection department B Materials handling department C Maintenance department D Stores
2 .
A $58,000 B $58,540 C $59,000 D $59,540
3 .A company manufactures and sells a single product. For this month the budgeted fixedproduction overheads are $48,000, budgeted production is 12,000 units and budgeted sales are11,720 units.The company currently uses absorption costing.If the company used marginal costing principles instead of absorption costing for thismonth, what would be the effect on the budgeted profit?
A $1,120 higher B $1,120 lower C $3,920 higher D $3,920 lower
4 .Last month, when a company had an opening inventory of 16,500 units and a closinginventory of 18,000 units, the profit using absorption costing was $40,000. The fixedproduction overhead rate was $10 per unit.What would the profit for last month have been using marginal costing?
A $15,000 B $25,000 C $55,000 D $65,000
5 .An organisation absorbs overheads on a machine hour basis. The planned level of activity forlast month was 30,000 machine hours with a total overhead cost of $247,500. Actual resultsshowed that 28,000 machine hours were recorded with a total overhead cost of $238,000.What was the total under absorption of overheads last month?
A $7,000 B $7,500 C $9,500 D $16,500
7 .A company uses absorption costing with a predetermined hourly overhead absorption rate.The following situations arose last month:(i) Actual hours worked exceeded planned hours.(ii) Actual overhead expenditure exceeded planned expenditure.Which of the following statements is correct?
A Situation (i) would cause overheads to be over absorbed and situation (ii) wouldcause overheads to be under absorbed. B Situation (i) would cause overheads to be under absorbed and situation (ii) wouldcause overheads to be over absorbed. C Both situations would cause overheads to be over absorbed....
8 .A company uses an absorption costing system. It has a variable cost of /$5 per unit and absorbs fixed production overhead at /$3 per unit. In a period when 1,800 units of product were sold and 2,000 units were produced, it recorded an operating profit of /$3,600.What would its operating profit have been if it had used a marginal costing system?
A $2,600 B $3,000 C $4,200 D $4,600
9 .In its first year of operations a company produced 100,000 units of a product and sold 80,000units at $9 per unit. It earned a marginal costing profit of $200,000. It calculates that itsfixed production overhead per unit is $5.What profit would it have earned under an absorption costing system?
A $100,000 B $200,000 C $300,000 D $320,000
10 .The nature of process X is such that there is never any work in progress at the end of themonth.During July 1,000 gallons of liquid A, purchased for $3,910, were processed. The output of920 gallons was passed on to the next process.For every 100 gallons of liquid A input, the expected output is 85 gallons, the balance beingevaporated during the process. The cost of output is based on normal levels of evaporation.Labour and overhead costs for the month were as follows:$Labour 2,500Overheads 1410 3910What is the cost per unit of output for July (to the nearest cent)?
A $4.25 B $4.60 C $8.50 D $9.20
