Tag: Accounting

Budgeted and actual sales of a product are given

What is the sales price variance?

Select ONE answer:

1. £310 adverse
2. £310 favourable
3. £330 adverse
4. £330 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 1

1. Correct ==> £19,530 / 1,240 = £15.75 ==> £0.25 * 1,240 = £310 ADV
2. Not correct
3. Not correct
4. Not correct

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

The following information relates to labour costs. 

• standard pay rate per hour  —  £7.50
• actual pay rate per hour  —  £9.00
• actual hours worked  —  60,000 hours
• labour efficiency variance  —  £12,000 adverse

What is the standard number of labour hours for actual output?

Select ONE answer:

1. 48,667
2. 51,333
3. 58,400
4. 61,600

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 3

1. Not correct
2. Not correct
3. Correct ==> (60,000 – X) * £7.50 = £12,000 Adverse where X = 58,400
4. Not correct

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

The cost of sales for a business comprises direct materials and direct labour.

At the end of a trading period the following variances are calculated.

If the actual cost of sales was £12,220, what is the standard cost of sales?

Select ONE answer:

1. £12,020
2. £12,120
3. £12,320
4. £12,420

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 ==> £12,220 – (£800 + £750) + (£700 + £650)
2. Not correct
3. Not correct
4. Not correct

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

A company’s debtors total £42,000 when the debtors’ days are 40.

 The company budgets in the coming year for a 30% increase in turnover and debtors’ days reduced to 30.

What will the budgeted debtors be at the year end?

Select ONE answer:

1. £24,231
2. £31,500
3. £40,950
4. £43,077

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 ==> £42,000 / 40 = £1,050 * 1.3 * 30 ==> £40,950
4. Not correct

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

The table shows the fixed budget for a business as follows.

sales and production units  —  20,000

sales value  —  £400,000
variable costs  —  £280,000
fixed costs  —  £50,000

Actual production and sales were 14,000 units.

Using a fixed budget, what would profit be?

Select ONE answer:

1. £28,000
2. £34,000
3. £49,000
4. £84,000

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 – £280,000 / 20,000 = CM £6 * 14,000 units – £50,000 ==> £34,000
3. Not correct
4. Not correct

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