Tag: Marginal costing

Accounting Multiple Choice Question – 21 October 2023

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

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Alex Manufacturing Ltd manufactures one product.

Variable costs are £600k. Fixed costs are £300k.

If Alex Manufacturing Ltd bought the product from another supplier, it could use existing machinery to make a total contribution of £400k. Fixed costs would not change.

What is the maximum price it should pay to obtain the product from another supplier?

Select ONE answer:

  1. £600k
  2. £700k
  3. £900k
  4. £1,000k

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 – £600k + £400k

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Accounting Multiple Choice Question – 17 September 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 information for the last three months’ production for Alex Ltd

  • total of manufacturing hours: Budgeted 240,000 hours AND Actual 270,000 hours
  • hours to make one unit: Budgeted 3.0 hours AND Actual 2.7 hours

The budgeted manufacturing costs for the three month period are £720,000.

What is the budgeted cost per unit?

Select ONE answer:

  1. £1.5
  2. £2.25
  3. £3
  4. £4

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 – 16 September 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 ltd is using flexible budgeting that shows the following information:

  • output in units: 120,000 AND 80,000
  • total fixed and variable costs: £660,000 AND £500,000

What are the variable costs per unit?

Select ONE answer:

  1. £1.5
  2. £2.25
  3. £3
  4. £4

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 – 14 September 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 budgets for the next production period for Alex Ltd:

  • direct materials: output 2,000 units = £30,000 AND output 4,000 units = £60,000
  • direct labour: output 2,000 units = £48,000 AND output 4,000 units = £96,000
  • production overhead: output 2,000 units = £76,000 AND output 4,000 units = £92,000

What would be the budgeted production cost of 3,000 units?

Select ONE answer:

  1. £141,000
  2. £147,000
  3. £171,000
  4. £201,000

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 4

  1. Not correct
  2. Not correct
  3. Not correct
  4. Correct = DM £45,000 + DL £72,000 + PO (76+92 / 2)

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

Accounting Multiple Choice Question – 22 August 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 information relates to the production of 50,000 units of product A:

  • selling price £25 per unit of A
  • variable costs £15 per unit of A
  • contribution £10 per unit of A

The fixed costs are £300,000.

The margin of safety is 20,000 units.

The unit selling price of A is increased by 10 %.

What is the percentage increase in the margin of safety?

Select ONE answer:

  1. 13.6%
  2. 20%
  3. 24.2%
  4. 30%

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 – SP £25 *1.1 = £27.5 so CM now £12.5 per unit. BEP now £300k / £12.5 = 24,000 units, therefore margin of safety now 26, 000 units an increase of 30%

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