The Multiple Choice Questions Blog

K Limited is planning an advertising campaign to promote its product.

The campaign will cost £14 000.

This is budgeted to increase sales volume in the second half of the year by 12 %.

Sales for the first half of the accounting year are budgeted at 30 000 units at a contribution of £4.20.

How much additional net profit should be budgeted as a result of the advertising campaign?

Select ONE answer:

1. Nil
2. £400
3. £560
4. £1,120

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 – (30,000 * 0.12 * £4.2) – £14,000

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

A company has forecast the following sales for the first three months of next year.

• month 1 units 2,000
• month 2 units 2,100
• month 3 units 2,400

At the start of month 1 there were 300 units in stock.

The company requires that the closing stock at the end of each month should be equal to 1/3 of the sales for the following month.

How many units must be produced in month 2?

Select ONE answer:

1. 2,000 units
2. 2,200 units
3. 2,400 units
4. 2,900 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 2

1. Not correct
2. Correct – 2,400 / 3 = 800 + 2,100 – (2,100 / 3) = 2,200
3. Not correct
4. Not correct

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

A company makes 500 units and sells these units at £50 each.

The direct materials cost is £7,500, direct labour costs £2,500 and fixed overheads are £8,400.

How much profit will be made if the company increases the number of units to 600?

Select ONE answer:

1. £7,920
2. £9,600
3. £10,100
4. £11,600

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 – 500 * £60 = £30,000 – (600 * £20 TVC) – £8,400 ==> £9,600
3. Not correct
4. Not correct

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

When should a manufacturing company purchase its products from an outside supplier?

When the price is….?

Select ONE answer:

1. less than the selling price but more than the total cost.
2. less than the marginal cost of production.
3. less than the marginal cost of sales but more than the marginal cost of production.
4. less than the total cost but more than the marginal cost of 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 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.