Month: February 2022

Last month a company made and sold 10 000 units and earned a contribution of £20 per unit.

Its final profit, after deducting total fixed costs, was £120 000.

This month its sales volume has increased by 20%, its contribution per unit has increased by 5% and its total fixed costs have increased by 15%.

What is its profit this month?

Select ONE answer:

1. £118 000
2. £148 000
3. £160 000
4. £172 000

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 3

1. Not correct
2. Not correct
3. Correct ==> (10,0000 * 1.2) * (£20 * 1.05) ==> £252,000 – FC (80,000 * 1.15)
4. Not correct

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

The same material is used to make all three products and it costs £2.00 per kilo.

There is a shortage of material.

In which order should the products be made to achieve maximum profit?

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 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.

A business has the following information relating to its single product.

• selling price per unit – £30
• variable cost per unit – £14
• total cost per unit – £24

What is its contribution to sales ratio?

Select ONE answer:

1. 20%
2. 46.67%
3. 53.33%
4. 80%

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 3

1. Not correct
2. Not correct
3. Correct ==> £30 – £14 = £16 / £30 ==> %53.33
4. Not correct

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

A manufacturing business has provided the following information.

• budgeted labour hours 12 000
• budgeted overhead absorption rate £7.50 per labour hour
• actual overhead cost £101 250
• actual labour hours 15 000

What is the over or under absorption of overheads?

Select ONE answer:

1. £11 250 under absorbed
2. £11 250 over absorbed
3. £20 250 under absorbed
4. £20 250 over absorbed

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. Correct
3. Not correct
4. Not correct

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

A company calculates its profit using marginal costing as £90 000 for a month.

Opening inventory was 4000 units and closing inventory 6000 units.

The fixed production overhead absorption rate is £20 per unit.

What is the profit under absorption costing?

Select ONE answer:

1. £10 000
2. £50 000
3. £130 000
4. £170 000

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 3

1. Not correct
2. Not correct
3. Correct ==> (6,000 – 4,000) * £20 ==> £40,000 + £90,000 ==> £130,000
4. Not correct

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