Tag: AQA

Alex Ltd compared its budgeted sales figures with its actual sales figures and discovered an adverse variance. 

Alex Ltd should?

Select ONE answer:

1. reduce its advertising budget
2. reduce its inventory levels
3. increase its prices
4. increase its production

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 – this may result in a reduction in sales due to lack of awareness in the market which would increase the adverse variance
2. Correct – Definition of adverse variance e.g. actual figures are worse than the budgeted figures.  Alex Ltd has unsold inventory.  Therefore Alex Ltd does not need to make additional products, so needs less inventory.
3. Not correct – this may result in demand falling as the prices are higher resulting in a loss of sales for Alex Ltd adding to the adverse inventory.
4. Not correct – this will just result in Alex Ltd having excess inventory rather than reducing the adverse variance

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In July 2021, The Big Car Company recalled a million vehicles due to a fault that could cause doors to open unexpectedly. 

Which element of the design mix does this relate to?

Select ONE answer:

1. Kaizen
2. Aesthetics
3. Function
4. Efficiency

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 – continuous improvement should have avoided the fault being caused in the first place or is not part of the design mix.
2. Not correct – aesthetics is how a product looks rather than how it works.
3. Correct – Definition of design mix e.g. the way in which function, aesthetics and economic manufacture are combined in the overall design.  A car with faulty doors is not working properly/safe.  Therefore it does not fulfil its design function and is not fit for purpose.
4. Not correct – efficiency is not part of the design mix.

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Big Oil is a global oil and gas company with 100,000 employees. Its organisational structure has a narrow span of control. 

What would be one benefit for Big Oil of having a narrow span of control?

Select ONE answer:

1. Allows for closer supervision of employees
2. Managers will have less time to supervise each employee
3. Gives employees the chance for more independence
4. Fewer layers in the hierarchy may be required 

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 – Definition of span of control e.g. the number of employees under a manager’s direct control.  Big Oil’s managers will only have a relatively small number of employees beneath them.  Managers therefore have more time to build an effective and productive relationship with employees.
2. Not correct – managers will have MORE time to supervise each employee as there are fewer employees for them to manage.
3. Not correct – freedom and responsibility is restricted due to closer supervision.
4. Not correct – narrow spans of control tend to occur in tall hierarchies with many layers.

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Alex’s engine factory can produce 200 engines per day. In July 2021, it produced 120 engines per day. 

Calculate the capacity utilisation for Alex Engines in July. 

Select ONE answer:

1. 40%
2. 60%
3. 67%
4. 167% 

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 – 120 / 200 * 100 = 60%
3. Not correct
4. Not correct

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

A few years ago, the airline Cathay Pacific reported an 80% decrease in its half-year profits. 

Which ONE of the following is the MOST LIKELY reason for this decrease in profits?

Select ONE answer:

1. An effective advertising campaign
2. A strong economic climate
3. Cheaper aviation fuel
4. An increase in competition from other airlines

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 – this would have increased sales of tickets due to more brand awareness and therefore possibly increased profits
2. Not correct – this would lead to more sales and therefore profits because of an increase in demand caused by a growing economy, and thus increase in incomes
3. Not correct – cheaper aviation fuel would have led to a decrease in costs and therefore an increase in profits.
4. Correct – Definition of profits e.g. total revenue – total costs.  More competition from other airlines would result in a greater choice for customers & a downward pressure on prices.  This could have decreased sales/revenue and therefore profits.

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