Q#1 Which of the following is not part of the planning stage in the decision-making process?

A Deciding on the optimal way in which an objective might be achieved B Identifying ways which might contribute to the achievement of specified objectives C Obtaining data about actual results D Identifying goals or objectives (2 marks) Q#2 A cost which contains both fixed and variable elements, and so is partly affected by changes in the level of activity, is called A A direct cost C An unavoidable cost B A semi-variable cost (1 mark) Q#3 A cost unit is A A measure of output of work in a standard hour VARIABLE COST FIXED COST STEPPED FIXED COST SEMIVARIABLE COST (1 mark) B A unit of product or service in relation to which costs are ascertained C The cost per

hour of operating a machine Q#4 Identify which type of cost is being described in (a)-(d) below.

(a) This type of cost stays the same, no matter how many products you produce (b) This type of cost increases as you produce more products. The sum of these costs are also known as the marginal cost of a product (c) This type of cost is fixed but only within certain levels of activity (d) This type of cost contains both fixed and variable elements Q#5 At the beginning of the year, Bob Co enters into a rental agreement with a landlord who is entitled, under the terms of the agreement, to change the rent (either upwards or downwards) according to economic conditions. Bob Co cannot cancel the agreement during the first six months. For the first six months of the agreement, Bob Co could classify the rent as a A Fixed cost C Semi-variable cost B Avoidable cost D Uncontrollable cost (2 marks) Q#6 Brady Co is a painting and decorating company. The following information is available for two periods: Period 1 Period 2 Square meters decorated 10,000 14,000 Total cost $44,000 $56,000

When more than 12,000 square meters are decorated, the fixed costs increase by $6,000. The total cost for period 3 if 15,500 square meters are decorated is $ (2 marks) Q#7 A company's weekly costs ($C) were plotted against production level (P) for the last 50 weeks and a regression line calculated to be C = 1,000 + 250P. Which statement about the breakdown of weekly costs is true? A Fixed costs are $1,000. Variable costs per unit are $5. B Fixed costs are $250. Variable costs per unit are $4. C Fixed costs are $250. Variable costs per unit are $1,000. D Fixed costs are $1,000. Variable costs per unit are $250. (2 marks) Q#8 The following information is available for a particular period: Probability Sales in units Probability Variable costs per unit 0.4 4,000 0.2 $5.50 0.5 4,500 0.5 $6.00 0.1 6,000 0.3 $7.00 If selling price is fixed at $9, what is the expected contribution for the period? The expected contribution for the period is $ Q#9 The following data relates to an item of raw material Unit cost of raw material $20 Usage per week 250 units Cost of ordering material, $400 per order Annual cost of holding inventory, as a % of cost 10% Number of weeks in a year 48 What is the economic order quantity, to the nearest unit? A 316 units C 1,549 units B 693 units D 2,191 units Q#10 The Economic Order Quantity (EOQ) model is used to minimize A Inventory holding costs B Costs associated with running out of inventory C The sum of inventory ordering and inventory holding costs

(2 marks)

(2 marks)

(1 mark)

The following information relates to questions 11 and 12 Slocombe Co budgeted to produce 10,000 units of its product (the Brahms) in the budgeted time of 50,000 hours. During the period the company produced 12,500 units in a total time of 68,750 hours. Q#11 The capacity ratio for the period was % (work to one decimal place). (2 marks) Q#12 The production volume ratio for the period was % (work to one decimal place). (2 marks) Q#13 A company had 500 workers at the beginning of a period. During the period, 70 workers left the company for various reasons and 46 new workers were employed. What is the labour turnover rate for the period (to the nearest %)? The labour turnover rate for the period is % (2 marks) Q#14 A company absorbs overheads based on labour hours. Data for the latest period are as follows. Budgeted labour hours 8,500 Budgeted overheads $148,750 Actual labour hours 7,928

Actual overheads $146,200 (a) Based on the data given above, what is the labour hour overhead absorption rate? A $17.20 per hour C $18.44 per hour B $17.50 per hour D $18.76 per hour (2 marks) Q#15 Based on the data given above, what is the amount of under-/over-absorbed overhead? A $2,550 under-absorbed overhead C $7,460 over-absorbed overhead B $2,550 over-absorbed overhead D $7,460 under-absorbed overhead (2 marks) Q#16 B Co makes a product which has a variable production cost of $21 per unit and a sales price of $39 per unit. At the beginning of 20X5, there was no opening inventory and sales during the year were 50,000 units. Fixed costs (production, administration, sales and distribution) totalled $328,000. Production was 70,000 units. The contribution per unit is $ . (2 marks) Q#17 In a marginal costing system, the formula Sales Variable Costs is used to calculate A Net profit C Gross profit B Contribution (1 mark) Q#18

Q#19 Regression analysis is being used to find the line of best fit (y = a + bx) from eleven pairs of data. The calculations have produced the following information: x = 440, y = 330, x2 = 17,986, y2 = 10,366, xy = 13,467 and b = 0.69171 What is the value of a in the equation for the line of best fit (to 2 decimal places)? A 0.63 B 0.69 C 2.33 D 5.33 (2 marks) Q#20 An organization manufactures a single product which is sold for $80 per unit. The organisations total monthly fixed costs are $99,000 and it has a contribution to sales ratio of 45%. This month it plans to manufacture and sell 4,000 units. What is the organizations margin of safety this month (in units)? A 1,250 B 1,750 C 2,250 D 2,750 (2 marks) Q#21 Which of the following is correct with regard to expected values? A Expected values provide a weighted average of anticipated outcomes. B The expected value will always equal one of the possible outcomes. C Expected values will show the decision makers attitude to risk. D The expected value will never equal one of the possible outcomes. (2 marks)

Q#22 A company always determines its order quantity for a raw material by using the Economic Order Quantity (EOQ) model. What would be the effects on the EOQ and the total annual holding cost of a decrease in the cost of ordering a batch of raw material? EOQ Annual holding cost A Higher Lower B Higher Higher C Lower Higher D Lower Lower (2 marks) Q#23