Tag: Cambridge Assessment

The following budgeted information is available for Alex Ltd.

• selling price per unit £200
• total costs per unit £150
• budgeted sales for the period 2,500 units

Variable costs are 60% of total costs.

What are the budgeted fixed overheads for the period?

Select ONE answer:

1. £125,000
2. £150,000
3. £225,000
4. £375,000

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 – £150 * .4 = £60 * 2,500 units = £150,000
3. Not correct
4. Not correct

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

The master budget of Alex plc is being prepared.

The following information is available.

• budgeted sales – £800,000
• budgeted purchases – £620,000
• opening Inventory – £30,000
• budgeted mark-up one third

What is the cost of the budgeted closing inventory?

Select ONE answer:

1. £20,000
2. £30,000
3. £50,000
4. £80,000

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 – If mark-up 33.3% then COS = £800k / 1.33333333333 = £600k therefore £30k + £620k – £50k
4. Not correct

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

Alex Banking plc policy is to close any branch that does not benefit the company financially.

When should a branch be closed?

Select ONE answer:

1. when its gross profit is declining each year
2. when both its sales and its net profit are declining
3. when its variable costs are greater than its sales revenues
4. when its fixed costs are greater than its net profit

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 costs of manufacturing a component are:

• direct labour – £100
• direct materials – £400
• prime cost – £500

The company overheads apportioned to the component are £150.

The component can be purchased from another company at £600.

What is the minimum cost of one extra component?

Select ONE answer:

1. £400
2. £500
3. £600
4. £650

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
3. Not correct
4. Not correct

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

The details of a planned college course are shown below.

• course fee per student – £100
• variable course cost per student – £20
• total fixed costs of the course – £480

The budgeted number of students is 10.

However, if a lower fee is charged 20 students would take the course.

What is the maximum reduction on the current course fee of £100, to earn the same total profit from either 10 or 20 students?

Select ONE answer:

1. £16
2. £24
3. £40
4. £50

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 – 10 students * £100 = £1,000 – (£20 * 10) – £480 = £320 profit vs 20 students * £60 = £1,200 – (£20 * 200) – £480 = £320 profit
4. Not correct

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