Month: January 2021

Which of the following is an advantage of using a budgetary control system?

Select ONE answer:

1. calculation of bad debt provisions
2. calculation of depreciation
3. making ‘make or buy’ decisions
4. monitoring management performance

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which of the following should be considered by a manufacturer before deciding to buy-in its products instead of manufacturing them?

Select ONE answer:

1. administration expenses
2. alternative use of resources formerly used for production
3. contribution to sales ratio
4. marketing expenditure

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

A company makes three products for which the following details are given. 

1. Selling price – £100 per unit
2. Direct materials – £40 per unit
3. Direct labour – £30 per unit

Total fixed costs are £40,000.

Planned production is 1,000 units.

Which action should the company take to break-even from the table below? 

Select ONE answer:

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. CorrectCorrect – £40 * 0.75 = £30 + £30 ==> £60 costs ==> £100 – £60 = £40 CM ==> TFC £40,000 / £40 CM = 1,000 units BEP
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

A company manufactures one product. It has variable costs of £600,000 and fixed costs of £300,000.
If it bought all its production from another supplier, it could use its existing machinery to make a total contribution of £400,000. Fixed costs would not change.
What is the maximum price it should pay to obtain all its production from another supplier?

Select ONE answer:

1. £600,000
2. £700,000
3. £900,000
4. £1,000,000

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – £600K + £400K

This work is licensed under a Creative Commons Attribution 4.0 International License.

For what purpose might management undertake sensitivity analysis?

Select ONE answer:

1. to calculate employees’ bonuses
2. to determine levels of depreciation
3. to determine the effect of dividends on profit
4. to determine the selling price of a product

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct

This work is licensed under a Creative Commons Attribution 4.0 International License.