Month: April 2023

Alex Banking plc policy is to close any branch that does not benefit the company financially.

When should a branch be closed?

Select ONE answer:

1. when its gross profit is declining each year
2. when both its sales and its net profit are declining
3. when its variable costs are greater than its sales revenues
4. when its fixed costs are greater than its net profit

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
4. Not correct

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

The costs of manufacturing a component are:

• direct labour – £100
• direct materials – £400
• prime cost – £500

The company overheads apportioned to the component are £150.

The component can be purchased from another company at £600.

What is the minimum cost of one extra component?

Select ONE answer:

1. £400
2. £500
3. £600
4. £650

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.

The details of a planned college course are shown below.

• course fee per student – £100
• variable course cost per student – £20
• total fixed costs of the course – £480

The budgeted number of students is 10.

However, if a lower fee is charged 20 students would take the course.

What is the maximum reduction on the current course fee of £100, to earn the same total profit from either 10 or 20 students?

Select ONE answer:

1. £16
2. £24
3. £40
4. £50

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 students * £100 = £1,000 – (£20 * 10) – £480 = £320 profit vs 20 students * £60 = £1,200 – (£20 * 200) – £480 = £320 profit
4. Not correct

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

The table shows the budgeted resources required for production and sales, and the available resources.

Market research shows sales demand for 120,000 units.

  resources required per unit  resources available

• material   4.0  460,000 kgs
• direct labour hours   3.0   400,000 hours
• machine hours   0.5  70,000 hours

What is the principal limiting factor in this case?

Select ONE answer:

1. direct labour hours
2. machine hours
3. material
4. sales

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 – 4 * 120,000 units = 480,000 kgs > 460,000 kgs
4. Not correct

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

What is a reason for a company issuing bonus shares to its existing shareholders?

Select ONE answer:

1. to capitalise reserves
2. to increase profits available for dividend
3. to raise the market value of shares
4. to raise additional cash

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.