Month: October 2022

In cash flow analysis, which item below is a cash inflow?

Select ONE answer:

1. a decrease in stock
2. a bonus issue of shares
3. a decrease in trade creditors
4. an increase in debtors

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 1

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

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

A company manufactures a single product with a selling price of £75 per unit.

The information in £000s shows the costs, based on sales and production volume of 8,000 units.

• prime costs – £158k
• variable manufacturing overheads – £74k
• fixed manufacturing overheads – £80k
• variable selling overheads – £20k
• fixed administration overheads – £100k

If absorption costing is applied, what is the gross profit on each unit sold?

Select ONE answer:

1. £21.00
2. £36.00
3. £43.50
4. £46.00

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 = £158k + £74k + £80k = £312k / 8,000 = £39 = = > £75 – £39 = £36
3. Not correct
4. Not correct

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

The following figures are given for a factory’s overheads and machine hours worked.

• budgeted = machine hours – 122,000 hours & total overhead costs – £268,400 & overhead absorption rate – £2.20
• actual = machine hours – 116,000 hours & total overhead costs – £261,000 & overhead absorption rate – £2.25

What was the under- or over-absorption of overhead for the quarter?

Select ONE answer:

1. £5,800 under-absorbed
2. £5,800 over-absorbed
3. £7,400 under-absorbed
4. £7,400 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 1

1. Correct – (122,000 hours – 116,000 hours) = 6,000 hours * £2.20 = £13,2000 – (£268,4000 – £261,000)
2. Not correct
3. Not correct
4. Not correct

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