Tag: Management Accounting

Accounting Multiple Choice Question – 20 July 2023

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

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The following information relates to the budgeted and actual sale of a product.

  • BUDGET – sales volume in units 40,000 + contribution per unit £2 + fixed costs (total) £30,000
  • ACTUAL – sales volume in units 36,000 + contribution per unit £2.5 + fixed costs (total) £30,000

What change in the break-even point has been caused by actual sales being different from budget?

Select ONE answer:

  1. 20% better
  2. 20 % worse
  3. 80% better
  4. 80 % worse

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 – BEP = FC / CM per unit = = > £30,000 / £2 = £15,000 to £30,000 / £2.5 = £12,000 Therefore 20% better
  2. Not correct
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 19 July 2023

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

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The table contains information provided by Alex ltd:

  • actual direct labour hours worked – 18,000 hours
  • actual overhead expenditure – £504,000
  • budgeted direct labour hours – 17,000 hours
  • budgeted overhead expenditure – £510,000

What is the amount of the overhead over / under recovery?

How is it calculated?

Select ONE answer:

  1. £6,000 over-recovered
  2. £6,000 under-recovered
  3. £30,000 over-recovered
  4. £36,000 over-recovered

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 – £510,000 / 17,000 = £30 per hour * 1,000 hours + (£510k – £504k) – because direct labour hours worked are higher than budget, there is bound to be an over- recovery of 1000 hours at $30 per hour, and because actual total overhead was less than budgeted, a further recovery of $6000 takes place.

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Accounting Multiple Choice Question – 18 July 2023

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Photo by Nataliya Vaitkevich on Pexels.com

Contribution by product is an important aspect of costing.

How is it calculated?

Select ONE answer:

  1. income from sales plus fixed costs
  2. income from sales plus variable costs
  3. income from sales minus fixed costs
  4. income from sales minus variable costs

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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Accounting Multiple Choice Question – 17 July 2023

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Photo by Nataliya Vaitkevich on Pexels.com

Alex plc budgets to produce 110,000 units.

Market research shows that the demand for the product will be for 90,000 units.

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

  • resources required per unit – material 3 kilos + direct labour hours 2.5 + machine hours 0.5
  • resources available – 335,000 kilos + 300,000 labour hours + 110,000 machine hours

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

Accounting Multiple Choice Question – 5 July 2023

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Photo by Nataliya Vaitkevich on Pexels.com

The balance sheet of Lucy Ltd shows net assets of £0.5M.

Alex plc buys this business for £0.8M by issuing new share capital.

The fair value of the net assets acquired is £0.7M.

By how much do the net assets of Alex plc increase?

Select ONE answer:

  1. £0.3M
  2. £0.5M
  3. £0.7M
  4. £0.8M

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 – Dr Cash £0.8M Cr SC £0.8M then Dr Assets £0.7M Cr Cash £0.7M – left with Dr Assets £0.7M & Cash £0.1M Cr SC £0.8M

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