Tag: Marginal costing

Accounting Multiple Choice Question – 23 December 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 Trading hopes to make £25,000 of profit next year.

One product is made: the Stafford garden shed.

Each Stafford shed is sold for £590 and has a variable cost of £240.

Monthly fixed costs are £4,275.

How many Stafford sheds does Alex Trading need to make next year and sell to achieve the target profit of £25,000?

Select ONE answer:

  1. 147 sheds
  2. 72 sheds
  3. 84 sheds
  4. 218 sheds

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 – The formula used to calculate the number of units required to achieve a target profit is — > Number of units = (annual fixed costs + target profit) / contribution per unit == > Contribution per unit = 590 – 240 = £350 per unit == > Annual fixed costs = 12 x £4,275 = £51,300 == > Number of units = (51,300 + 25,000) / 350 = 218 sheds

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

Accounting Multiple Choice Question – 21 December 2023

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

Photo by Pixabay on Pexels.com

Alex Manufacturing Ltd has made 1,800 calculators in one month.

Each calculator had a variable cost of £5.40 and a selling price of £11.

The fixed costs for the month were £8,000.

How much contribution did Alex Manufacturing Ltd make in the month?

Select ONE answer:

  1. £10,080
  2. £19,800
  3. £2,080
  4. £1,720

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 – Contribution per unit = selling price per unit – variable cost per unit = 11.00 – 5.40 = £5.60 per unit. Total contribution = number of units x contribution per unit = 1,800 x £5.60 = £10,080
  2. Not correct
  3. Not correct
  4. Not correct

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

Accounting Multiple Choice Question – 12 December 2023

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

Photo by Olya Kobruseva on Pexels.com

Alex Trading Ltd has fixed costs of £100,000.

Alex Trading Ltd sells a single product for £25 per unit, and its contribution to sales ratio is 40 %.

What is the break-even point in units for Alex Trading Ltd?

Select ONE answer:

  1. 6,667
  2. 10,000
  3. 40,000
  4. 250,000

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 – 40% of £25 = £10 == > £100,000 FC / £10 = 10,000 units
  3. Not correct
  4. Not correct

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

Accounting Multiple Choice Question – 3 November 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 Manufacturing ltd makes three products for which the following details are given below.

The same material is used by all three products and it costs £2.00 per kilo.

There is a shortage of material.

In which priority should the product be made in order to achieve maximum profit from the available material?

Select ONE answer:

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

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

Accounting Multiple Choice Question – 2 November 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 table shows the annual results of Alex Trading plc’s three departments:

Department   X   Y   Z

Sales   £200,000   £240,000   £320,000

less: variable costs   £130,000   £150,000   £100,000

headquarters fixed costs – apportioned   £80,000   £90,000   £130,000

Profit for the year(loss)   (£10,000)   NIL   £90,000

Headquarters fixed costs will not be reduced if any department is closed.

What should the company do, on the basis of these results?

Select ONE answer:

  1. close department X
  2. close department Y
  3. close departments X and Y
  4. keep all departments open

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

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