Tag: Accounting

Which decreases the net cash inflow from operating activities?

Select ONE answer:

1. decrease in stock
2. increase in creditors
3. increase in debtors
4. repayment of borrowings

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

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

The sales budget for Alex plc shows monthly sales of 300 units for July and 600 units for August.

Stock at the start of a month is budgeted to be 50 % of the month’s planned sales.

10 % of production in a month is faulty.

What is the actual production quantity for July to achieve the budgeted sales?

Select ONE answer:

1. 300 units
2. 450 units
3. 495 units
4. 500 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 4

1. Not correct
2. Not correct
3. Not correct
4. Correct == >
   • To determine the actual production quantity for July, we need to follow these steps:
     • Step 1: Calculate the planned sales for July
     • Planned sales for July = 300 units
     • Step 2: Calculate the opening stock for July
       • Opening stock for July = 50% of planned sales for July
       • Opening stock for July = 50% x 300 = 150 units
     • Step 3: Determine the total units required for July
       • Total units required for July = Planned sales for July + Opening stock for July
       • Total units required for July = 300 + 150 = 450 units
     • Step 4: Determine the production quantity required for July
       • To determine the production quantity required for July, we need to consider the faulty production. Since 10% of production is faulty, the actual production required to meet the budgeted sales for July is:
       • Actual production for July = Total units required for July / (1 – % of faulty production)
       • Actual production for July = 450 / (1 – 10%) = 500 units
       • Therefore, the actual production quantity for July to achieve the budgeted sales is 500 units.

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A LP vinyl record has a selling price of £10.

• cost per LP vinyl record:
• direct materials – £1.20
• direct labour – £0.80
• factory overhead (fixed) – £1.40
• royalty payment – £1.00
• administration overhead (fixed) – £0.60

What is the contribution per LP vinyl record?

Select ONE answer:

1. £5.00
2. £6.00
3. £7.00
4. £8.00

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 3

1. Not correct
2. Not correct
3. Correct = £1.4 + £1 + £0.60 == > £3 therefore £10 – £3 = £7 contribution
4. Not correct

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

A hospital budgets for overheads totalling £11,500,000 for a financial year.

It expects to treat 25,000 patients in the year.

Each patient stays an average of 10 days and the hospital absorbs overheads on a patient/day basis.

Its direct costs for the year are budgeted at £25,000,000.

What is its overhead absorption rate?

Select ONE answer:

1. £46 per patient day
2. £100 per patient day
3. £146 per patient day
4. £460 per patient day

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 – £11,500,000 / (25,000 * 10 days)
2. Not correct
3. Not correct
4. Not correct

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

A company makes two products X & Y.

• selling price – X is £10 & Y is £12
• variable costs per unit – X is £4 and Y is £8
• maximum sales (units) – X is 4,000 & Y is 14,000

Fixed costs are £48,000.

4,000 units of X are sold.

How many units of Y must be sold to break even?

Select ONE answer:

1. 2,000
2. 3,000
3. 6,000
4. 12,000

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 3

1. Not correct
2. Not correct
3. Correct = X contribution is £10 – £4 = £6 * 4,000 = £24,000 — > therefore Y sales must be £48,000 – £24,000 = £24,000 / (£12 – £8) = 6,000 units
4. Not correct

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