The Multiple Choice Questions Blog

A business provided the following information per unit about a product.

• selling price – £20.00
• variable cost – £12.50
• fixed cost – £3.50

What is the contribution to sales ratio?

Select ONE answer:

1. 20%
2. 37.5%
3. 62.5%
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 2

1. Not correct
2. Correct – £20 – £12.50 = £7.5 / £20 ==> 37.5%
3. Not correct
4. Not correct

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

A business provided the following information about a product per unit.

• selling price – £15.00
• variable cost – £9.00
• fixed cost – £4.20

Budgeted production and sales were 1200 units.

What was the profit made for actual production and sales of 1500 units?

Select ONE answer:

1. £2,700
2. £3,960
3. £6,660
4. £9,000

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 2

1. Not correct
2. Correct – £15 – £9 – £4.2 = £1.8 * 1,200 units = £2,160 + (£15 – £9 * 300 units) = £3,960
3. Not correct
4. Not correct

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

A company uses a machine hour basis to absorb its overheads.

The following information is provided for its last period.

                                                                        actual              budgeted

• overheads £299,000 £350,000
• machine hours 46,000 50,000

Which statement regarding overheads is correct?

Select ONE answer:

1. They were over absorbed by £23,000.
2. They were under absorbed by £23,000.
3. They were over absorbed by £51,000.
4. They were under absorbed by £51,000.

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 1

1. Correct ==> £350,000 / 50,000 hours = £7 * 46,000 hours = £322,000 – £299,000 = £23,000
2. Not correct
3. Not correct
4. Not correct

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

A business has provided the following costing information for its production departments.

                                                                            machining           assembly 

total production overheads £180,000 £260,000
machine hours 65,000 38,000
labour hours 42,000 76,000

What would be a suitable overhead absorption rate for each department?

Select ONE answer:

1. machining £2.77 & assembly £3.42
2. machining £2.77 & assembly £6.84
3. machining £4.29 & assembly £3.42
4. machining £4.29 & assembly £6.84

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 ==> £180,000 / 65,000 & £260,000 / 76,000
2. Not correct
3. Not correct
4. Not correct

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