The Multiple Choice Questions Blog

A company has a stock of 10,000 units of finished goods. It budgets to produce 110,000 units which, after sales, will increase its stock to 20,000 units.

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

Market research shows that the demand for the product will be for 90,000 units. What is the principal limiting factor in this case?

Select ONE answer:

1. direct labour
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 4

1. Not correct
2. Not correct
3. Not correct
4. Correct

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A company’s debtors total £27,000. There is a collection period of 30 days.

The budget for the coming year provides for an increased turnover of 50% with the relevant collection period being increased to 60 days.

What will the year-end debtors be?

Select ONE answer:

1. £13,500
2. £27,000
3. £40,500
4. £81,000

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 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – £27,000 * 2 * 2

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

The table below shows the budget for a business.

Actual production and sales were 15 000 units.

What was the actual profit?

Select ONE answer:

1. £30,000
2. £40,000
3. £52,000
4. £90,000 

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 – (£400,000 / 20,000) *15,000 — (£280,000 / 20,000) * 15,000 – £50,000
3. Not correct
4. Not correct

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

A company has a policy of holding stock equal to next month’s expected sales plus 10%.

The information below shows the budgeted sales for the next three months.

• Aug   —  300 units
• Sept  —  270 units
• Oct   —  360 units

What must be the company’s production in September, in order to achieve its objectives?

Select ONE answer:

1. 267
2. 333
3. 369
4. 396

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 = – (270 *0.1) + 360 + (360 * 0.1)
4. Not correct

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

A company manufactures three products for which the following details (per unit) are available. 

product X £   product Y £   product Z £

sales value                                 12                    12                 22.50

direct material cost                  5                    5                   8      

labour cost                                   4                    6                  4.50

labour hours                                2                    0.8                3

If labour hours are restricted in supply, which order of priority should the company adopt when planning its production?

Select ONE answer:

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 – Z = 22.50 – 12.50 = 10 CM,  Y = 12 – 10 = 2 CM
4. Not correct

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