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T2 Mock Exam (Dec08 Exam)

All 50 questions are compulsory and MUST be attempted Each question is worth 2 marks.

1. Which of the following action is a criminal offence under Computer Misuse Act 1990 in the UK? i Introduce virus to a computer system ii Unauthorised access to a computer network iii Introduce virus through email A. B. C. D. All i and ii i and iii ii and iii

2. Which of the following is NOT an operating system? A. B. C. D. Unix Windows Vista Microsoft Excel Linux

3. Which of the following action is a criminal offence under Computer Misuse Act 1990 in the UK? i Introduce virus to a computer system ii Unauthorised access to a computer network iii Introduce virus through email A B C D All i and ii i and iii ii and iii

4. Which of the followings is NOT meant for security purpose? A. B. C. D. Firewall Antivirus program Multiplexor Encryption technology

T2 Mock Exam (Dec08 Exam)

5 Which of the following statements is incorrect for a business where the objective of management is to maximise profit? A. B. C. D. Depreciation can never be relevant to a management decision. Sunk costs may be relevant to a management decision. Decisions should be based on an analysis of relevant costs and revenues. An opportunity cost is a benefit forgone by taking a course of action.

6. A B C D

Which of the following would be classified as an overhead? Overtime premium when the overtime was worked at the customers request Overtime premium when the overtime worked was because of a machine breakdown Payments to staff on a piece-work scheme The basic pay relating to overtime hours

7. Payments to suppliers are entered into an integrated computerised accounting system. Which of the following does not happen when these payments are entered into the computerised system? A B C D The supplier's individual account is updated in the purchase ledger/payables ledger. The creditors control account in the nominal ledger (main ledger) is debited. The bank account in the nominal ledger is credited. The debtors control account in the nominal ledger is credited.

8 What is the term associated with charging a specific item of overhead cost to one particular department? A B C D Absorption Allocation Apportionment Re-apportionment

9 You are presented with the following information about sales and costs for a business that makes and sells a range of products. Sales revenue 320,000 Direct costs (100,000) Production overhead costs (150,000) 70,000 Other overhead costs 50,000

T2 Mock Exam (Dec08 Exam)

The business uses absorption costing. There were no opening or closing stocks of the product. Budgeted production overhead costs were 80,000. Actual production overheads were 78,000 and absorbed production overheads were 75,000. What profit would be reported for the period, using absorption costing? A B C D 15,000 17,000 20,000 23,000

10. Management has asked for a report showing the annual sales and profits for its three products for the year just ended. The report could be presented in either an absorption costing or a marginal costing format. Which of the following statements is incorrect? A The total profit would be the same, regardless of whether absorption costing or marginal costing is used. B A report using absorption costing would indicate whether each product appears to be making enough profits. C A report using marginal costing would indicate whether each product was making enough contribution towards covering fixed overheads and making a profit. D A report using marginal costing would show the total contribution, from which fixed overheads would be deducted to arrive at the profit figure.

11. Total contribution is calculated by which formula? A B C D Total revenue less total cost Total revenue less variable cost Total revenue less fixed cost Total revenue less production cost

12. Which of the following must be upgraded after a new application program is installed and the computer becomes slow down drastically. A. B. C. D. Graphic card RAM ROM CPU

T2 Mock Exam (Dec08 Exam)

13. A company has calculated that its capacity ratio is 103.5% and that its efficiency ratio is 90%. Therefore its capacity ratio will be: A. B. C. D. 86.96% 93.15% 115.00% 193.50%

14. A business has a seasonal sales pattern. Management reports are produced each month showing. Which of the following comparisons would be suitable for control purposes? 1 Comparison with sales in the corresponding month last year 2 Budgeted sales for the month 3 Comparison with previous month's sales in the current year A B C D 1 and 2 only 2 only 2 and 3 only 1, 2 and 3

15 A product uses 6 kilograms of raw material and takes two direct labour hours to make. Raw materials cost 2.50 per kilogram and direct labour is paid 4 per hour. Variable production overheads are 25% of labour costs. The budgeted fixed production costs for the year were 120,000 and budgeted direct labour hours were 20,000 hours. Fixed overheads are recovered on a direct labour hour basis. The full production cost per unit of product is: A B C D 25 31 35 37

16 Which of the following statements are incorrect? i ii iii iv


A B C D

Computer can communicate with each other using fibre optic technology Users of one computer system can access data stored by another system There are no risk involved in using network computers. Computer do not require special equipment to communicate with each another over the public communication networks.
i & ii iii & iv i & iv ii & iii 4

T2 Mock Exam (Dec08 Exam)

17 Which of the following pieces of information is unlikely to be recorded in a visitors book kept for security purposes. A B C D Time of arrival of visitor Name of visitor Date of birth of visitor Name of company the visitor from

18 A company currently uses absorption costing. The following information relates to Product X for Month 1: Opening stock Production Sales Nil 900 units 100 units

If the company had used marginal costing, which of the following combinations would be true? Profit would be higher would be higher would be lower would be lower Stock would be higher would be lower would be higher would be lower

A B C D

19 Variable costs are conventionally deemed to A B C D vary per unit of output as production volume changes be constant in total as production volume changes vary, in total, from period to period when production is constant be constant per unit of output

20 What is a book of prime entry? A. A ledger account where transactions are originally recorded B. A record in which transactions are originally recorded before being transferred to a ledger account C. A separate ledger where details of a particular type of transaction are recorded in parallel to the recording in the general ledger D. A set of memorandum ledger accounts which back up the total figures recorded in the general ledger

T2 Mock Exam (Dec08 Exam)

21 Which of the following is NOT correct? A. B. C. D. Limited companies, by law, are required to prepare financial accounts The format of financial accounts and cost accounts are usually differ Financial accounts and cost accounts will contain, at least, some common data The value of stocks in the financial accounts can differ from the value in cost accounts

22. If actual output is lower than budgeted output, which of the following costs would you expect to be lower than the original budget? A. B. C. D. Total variable costs Total fixed costs Variable costs per unit Fixed costs per unit

23. A company has to pay loyalties of 1.50 per unit of production. The agreement stated that loyalties are payable monthly based on the months production. How would the loyalties be classified in the cost accounts? A. B. C. D. As a variable cost As a semi-variable cost As a fixed cost As a stepped cost

24 XX Ltd absorbs overheads based on units produced. In one period, 23,000 units were produced, actual overheads were 276,000 and there was 46,000 under absorption of overheads. The budgeted overhead absorption rate per unit was: A B C D 10 12 13 14

25 The central processing unit: A B C D Holds program instructions Does not hold data on which it works Comprises the main store, backing store and the control unit Is peripheral to the control unit

T2 Mock Exam (Dec08 Exam)

26 Which ONE of the following would be classified as direct labour? A B C D Personnel manager in a company servicing cars. Bricklayer in a construction company. General manager in a DIY shop. Maintenance manager in a company producing cameras.

27 A service department charges a mark-up on services performed for other departments. Goods or services will be charged at a transfer price. Which is the following best to describe this service department? A B C D A cost centre A profit centre An investment centre An expenditure centre

28 A company operates a piecework scheme to pay its staff. The staff receive 0.20 fro each unit produced. However the company guarantees that every member of staff will receive at least 15 per day. Show below is the number of units produced by operator A during a recent week: Day Unit produced Monday Tuesday Wednesday 90 70 75 Thursday Friday 60 90

What are operator As earnings for the week? A B C D 75.00 77.00 81.00 152.00

29 Which is not a recognised method of overhead absorption? A B C D Recovery rate per direct labour hour Recovery rate per machine hour As a percentage of sales value As a percentage of prime cost

T2 Mock Exam (Dec08 Exam)

30 Production supervisory salaries are classed as production overhead. Which is the most appropriate basis of apportioning this cost to cost centres? A B C D Number of employees (both full-time and part-time) Machine hours Direct labour hours Number of machines

31 Which of the following items might be a cost center within a management accounting systems of an university of further education. i. ii iii iv A. B. C. D. Business study department A student An university building The university itself All four i and ii i, ii and iv i and iii

32 In which one of the following situations is real-time transaction processing absolutely essential for efficient operation? A B C D Payroll transaction entries in a retail shop Suppliers invoices in a manufacturing company Cheque transactions in a bank Ticket reservations in a theatre

33 A small engineering company that makes generators specifically to customers' own designs has had to purchase some special tools for a particular job. The tools will have no further use after the work has been completed and will be scrapped. The cost of these tools should be treated as: A B C D Variable production overheads Fixed production overheads Indirect expenses Direct expenses

T2 Mock Exam (Dec08 Exam)

34 RT Ltd uses marginal costing for internal reporting purposes and absorption costing for its published accounts. The company produces a single product which has a unit selling price of 20, a unit variable cost of 8 and a unit fixed production cost of 7.20. Period 2 data: Opening stock Production Sales nil 1,200 units 1,000 units

The marginal costing profit and loss account showed a loss of 200 for Period 2. The absorption costing profit and loss account will show: A B C D Loss of 1,646 Loss of 200 Profit of 400 Profit of 1,240

35 Which of the following are acceptable bases for absorbing production overheads? 1. 2. 3. 4. A B C D direct labour hours machine hours as a percentage of prime cost per unit

1 and 2 only 3 and 4 only 1, 2, 3 or 4 1, 2 or 3 only

36 Which of the following statements is correct about costs in a manufacturing business? A B C D The fixed cost per unit is the same at all levels of output. The fixed cost per unit falls as output increases, at a constant rate The fixed cost per unit falls as output increases, at a declining rate The fixed cost per unit falls as output increases, at an increasing rate

37 The data of a sales activity recorded as follow. Budgeted sales Actual sales Budgeted selling price Actual selling price Budgeted variable cost Budgeted fixed cost 200 units 180 units 100 110 50/unit 15/unit
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T2 Mock Exam (Dec08 Exam)

What is the sales volume variance assuming a marginal costing system? A B C D 1,000 Adverse 1,000 Favourable 1,200 Adverse 1,200 Favourable

38 Which of the following costs would likely to be apportioned over a number of cost centers when absorption costing is adopted? A B C D Factory rent and direct materials Heat and light and direct materials Factory rent and direct labour Factory rent and heat and light

39 Western Limited makes three products, which are shown below. Red 30 2kg 6 Blue 40 5kg 3 Green 18 4kg 3

Contribution per unit Material X (per kg) Labour hour rate per unit

Which of the following priority of production in order to maximize the profit? A B C D Red, Blue, Green Red, Green, Blue Green, Blue, Red Blue, Green, Red

40 A flexible budget is: A B C D 41 1 2 3 A B C D a budget showing variable production costs only a budget showing actual costs and revenues in the budget period a budget which shows the costs and revenues at different levels of activity a budget that is changed monthly What would be the following form part of purchasing system? purchase invoice purchase requisition good receive notes 1 and 2 2 and 3 2 only 1, 2 and 3
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T2 Mock Exam (Dec08 Exam)

42 If an assembly line supervisor is paid a salary of 100 each week, and an extra 10p for every unit of production made in the week, this wage cost could be described as: A B C D A semi-variable cost A fixed cost A variable cost A step cost

43 Which of the following statements relating to coding is incorrect? A B C D Coding enables companies to record and retrieve information quickly and easily Coding ensures that no errors are ever made Coding enables companies to file large amounts of information in a small space Information which has been coded can be sorted in a variety of different ways

44 A product has a budgeted direct materials cost of 12 per unit. Production volume for the period was: Actual Budget 6,750 units 6,500 units

Actual direct materials cost for the period were 79,840. What was the direct material cost variance? A B C D 1,160 Favourable 1,160 Adverse 1,840 Favourable 1,840 Adverse

45 Which of the following factors should be the least likely to affect a decision about whether or not to investigate a variance reported during a particular month in the middle of the financial year? A B C D Size of the variance Whether it is favourable or adverse Whether it is likely to be controllable The trend in the monthly variance over the year to date

46 What is the principle of reporting by exception with variance analysis? A B C D Report variances only occasionally Report only those variances that exceed a certain limit Report only to the most senior management Report only adverse variances
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T2 Mock Exam (Dec08 Exam)

47 HL makes and sells a single product. Budgeted fixed costs are 100,000. Budgeted sales revenue is 300,000 and the budgeted contribution is 125,000. What is the margin of safety? A B C D 0% 10% 20% 25%

48 The following information relates to Product 123. Sales price 12 Prime cost 4 Fixed overhead 5 Total cost 9 Profit 3 Fixed costs each month are 63,000. What is the breakeven volume of sales each month? A B C D 7,875 units 9,000 units 12,600 units 21,000 units

49 The margin of safety can be described as: A the amount by which actual sales can be less than the budgeted sales, usually expressed as a percentage of budgeted sales, without incurring a loss B the volume of sales required to avoid making a loss C the amount by which actual sales can be less than the budgeted sales, usually expressed as a percentage of breakeven sales volume, without incurring a loss D the percentage amount by which actual profit can be lower than budgeted sales volume, without incurring a loss.

50 Which of the following is NOT included in the prime cost? A B C D Overtime work at a customers request Special packaging for a particular product Supervised training for a new employee Loyalties

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