The Multiple Choice Questions Blog

The net present value (NPV) method of investment appraisal requires?

Select ONE answer:

1. a distinction being made between capital and revenue expenditure and income.
2. the realistic depreciation of the capital expenditure involved.
3. a knowledge of the amounts and timings of the expected net proceeds of proposed investments.
4. the calculation of the payback periods of proposed investments.

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

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The table below shows the standard cost data relating to a product passing through two production departments. 

The standard prime cost is £20. Overheads are absorbed on the basis of direct labour hours and machine hours as appropriate.

What is the standard factory cost of the product?

Select ONE answer:

1. £26
2. £32
3. £34
4. £36

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 – £20 + (£200,000 / 100,000 * 2) + (£400,000 / 100,000 * 3)

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

The table below shows cost data for a product. 

• materials   —   £22
• direct labour (4 standard hours × $4.00)   —   £16

The total standard overheads are £250,000 and standard direct labour hours are 100,000. Overheads are absorbed on the basis of direct labour hours. 

What will the standard selling price be, if the company seeks to earn a standard profit of 25% on factory cost?

Select ONE answer:

1. £47.50
2. £48.00
3. £50.62
4. £60.00

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 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – £22 + £16 + (250,000 / 100,000 *4) ===> £48 * 1.25

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

The standard time for a job is set at 50 hours. The standard direct labour rate is £8.00 per hour.

The job was completed in 65 hours at a direct labour cost of £455.

What is the direct labour rate variance?

Select ONE answer:

1. £55 adverse
2. £55 favourable
3. £65 adverse
4. £65 favourable 

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 – £455 / 65 = £7 ==> £8 – £7 * 65 hours = £65 FAV

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

The table below shows an annual budget for a company.

As the actual production is only 9000 units, the company flexes the budget.

What is the revised total budgeted cost?

Select ONE answer:

1. £36,000
2. £36,400
3. £37,200
4. £38,200

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 – £4,000 + (£36,000 * 0.9)
3. Not correct
4. Not correct

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