Category: Accounting

Accounting Multiple Choice Question – 22 August 2023

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Photo by Nataliya Vaitkevich on Pexels.com

The information relates to the production of 50,000 units of product A:

  • selling price £25 per unit of A
  • variable costs £15 per unit of A
  • contribution £10 per unit of A

The fixed costs are £300,000.

The margin of safety is 20,000 units.

The unit selling price of A is increased by 10 %.

What is the percentage increase in the margin of safety?

Select ONE answer:

  1. 13.6%
  2. 20%
  3. 24.2%
  4. 30%

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 – SP £25 *1.1 = £27.5 so CM now £12.5 per unit. BEP now £300k / £12.5 = 24,000 units, therefore margin of safety now 26, 000 units an increase of 30%

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

Accounting Multiple Choice Question – 21 August 2023

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Photo by Pixabay on Pexels.com

Alex plc uses a predetermined direct labour rate of £5.40 per hour to absorb production overhead.

Each unit of product manufactured requires four direct labour hours

The following information is available for a period.

  • actual production overhead – £518,400
  • under-absorbed production overhead – £32,400

What was the actual output of the product in the period?

Select ONE answer:

  1. 22,500 units
  2. 24,000 units
  3. 25,500 units
  4. 30,000 units

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 – £518,400 – £32,400 = £486,000 / £5.4 = 90,000 hours / 4 = 22,500 units
  2. Not correct
  3. Not correct
  4. Not correct

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

Accounting Multiple Choice Question – 20 August 2023

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Photo by Nataliya Vaitkevich on Pexels.com

Assuming all other factors remain unchanged, the break-even point of a business can be lowered by increasing its?

Select ONE answer:

  1. budgeted sales
  2. fixed costs
  3. marginal costs
  4. selling prices

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

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

Accounting Multiple Choice Question – 19 August 2023

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

apple devices books business coffee
Photo by Serpstat on Pexels.com

The diagram shows a break-even chart.

Which line represents the margin of safety?

Select ONE answer:

  1. WX
  2. WY
  3. XY
  4. XZ

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

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

Accounting Multiple Choice Question – 18 August 2023

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

apple devices books business coffee
Photo by Serpstat on Pexels.com

The following information has been taken from a recent statement of financial position of Alex ltd:

  • non-current assets – £150,000
  • Capital – £170,000
  • current liabilities – £5,000

What is the current ratio?

Select ONE answer:

  1. 3 : 1
  2. 4 : 1
  3. 5 : 1
  4. 6 : 1

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 – NCA + CA – CL = C == > £170k – (£150k – £5k) = £25k == > £25k / £5k = 5 : 1
  4. Not correct

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