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VIETSOURCING BUSINESS SERVICE

Progress Test 2
CAT
Paper 2 Information for
management Control

Time allowed: 120 minutes

Student name:...........................................................

Address:.....................................................................

..................................................................................

Tel No: ......................................................................

Total Mark:

Good luck to you./.


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Question 1
Which of the following demonstrates the control cycle?
A Allocate resources - plan - commence operations - review performance
B Review performance - plan - allocate resources - commence operations
C Plan - allocate resources - commence operations - review performance (x)
D Plan - commence operations - review performance - allocate resources

Question 2
Which type of cost does the following graph represent?

A Semi variable cost per unit


B Variable cost per unit (x)
C Total cost per unit
D Fixed cost per unit

Question 3
In some systems, certain computers are dedicated to holding most of the files of the system and making
them accessible to other computers in the organisation
What is the MOST likely term for such service providing machines?
A Data dictionaries
B Database administrators
C File servers (x)
D File managers

Question 4
Which of the following would be classified as an example of technical information?
A Drawings for a new office block (x)
B Manager's job description
C Employee's appraisal record
D Company staffing structure

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Question 5
Jack is reorganising the filing system for the accounts function
Which of the following documents is Jack LEAST likely to file in the sales ledger department?
A Copy credit notes issued
B Supplier statements (x)
C Copy sales invoices
D Details of cheques received

Question 6
Jolly Co assesses performance on the basis of asset turnover
Sales $50,000
Cost of sales ($10,000)
Gross profit $40,000
Expenses ($15,000)
Net profit $25,000
Capital employed $100,000

What is the asset turnover?


A 0.8 times
B 0.5 times (x)
C 0.4 times
D 2 times

Question 7
Which of the following defines cost classification?
A The allotment of items of cost to cost centres
B The use by several companies of the same costing methods
C The sum of all costs incurred
D The process of grouping costs according to their common characteristics (x)

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Question 8
The chart shows the behaviour of a cost (per unit of output) as the volume of output changes

A Variable cost
B Semi-variable cost
C Stepped-fixed cost
D Fixed cost (x)

Question 9
In an accounting system what would be the entry for the issue of indirect material?
A Dr Raw material inventory Cr Work in progress
B Dr Production overhead Cr Raw material inventory (x)
C Dr Work in progress Cr Raw material inventory
D Dr Raw material inventory Cr Production overhead

Question 10
Which of the following is NOT a method of absorbing production overhead costs into product
costs?
A Machine hour rate
B Percentage of direct labour cost
C Number of employees (x)
D Percentage of direct material cost

Question 11
Which of the following may cause an adverse selling price variance?
(1) An increase in competitor activity
(2) A decrease in competitor activity
(3) Actual demand less than forecast demand
(4) Actual demand higher than forecast demand

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A 1 and 3 (x)
B 2 and 4
C 2 and 3
D 1 and 4

Question 12
A firm has discovered that the cost of a raw material will increase
If nothing else changes what is the effect of this?
A The margin of safety will increase and the breakeven point will increase
B The margin of safety will decrease and the breakeven point will increase (x)
C The margin of safety will increase and the breakeven point will decrease
D The margin of safety will decrease and the breakeven point will decrease

Question 13
What is the value of a flexible budget?
A It enables comparisons of like with like (x)
B It allows for changes in price
C It allows new product development
D It accounts for changes in production costs

Question 14
Which of the following correctly defines the main components of the CPU?
A Disk unit Main memory Arithmetic and logic unit
B Control unit Visual display unit Main memory
C Control unit Main memory Arithmetic and logic unit (x)
D Control unit Disk unit Visual display unit

Question 15
TRS CONSULTANTS CO
31 Oxford Avenue
Melbourne
Victoria
Austalia

Invoice Number: 9911

Date: 25th February 20X1

Customer:
Jacqueline Smith
ACCA
2 Central Quay
Glasgow

6
G3 8BW
United Kingdom

Item:
Accountancy training $1,500.00
In an integrated computerised accounts software package, which of the following is correct?

A The bank account will be credited


B The trade payables control account will be debited
C The sales account will be debited
D The trade receivables control account will be debited (x)

Question 16
What term is applied to the systematic arrangement of numerical data in order to provide a logical
account of analytical results?
A Pictorialisation
B Computerisation
C Quantification
D Tabulation (x)

Question 17
Where would a user normally store an active word processing file?
A In an archive
B In a mailbox
C In a folder (x)
D In a back-up

Question 18
Which of the following documents will MOST help a sales manager to monitor the effectiveness of
a sales team?
A The sales department's organisational chart
B The completion of appraisal interview forms
C A monthly report analysing the reasons for customer complaints
D A monthly report comparing sales targets with actual results (x)

Question 19
Which of the following factors is LEAST important when planning a written report?
A Giving clear recommendations or options for action
B Giving references to previous reports on the same subject
C Finding an ornate font for the title (x)

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D Following a logical structure

Question 20
You have been asked to write a report outlining the qualities of good information
Which of the following would you NOT include in the report?
A The information should be understandable
B The information should be communicated to everyone in the organization (x)
C The information should be communicated via an appropriate channel
D The information should be complete

Question 21
A company planned to produce 10,400 units in a standard allowed time of 4,160 hours. 11,230
units were produced and the actual time taken was 4,600 hours. What was the efficiency ratio (to
the nearest whole number)?
A 111%
B 108%
C 102%
D 98% (x)

Question 22
The following information relates to an investment centre for a period:
Sales revenue £160,000
Variable costs £96,000
Fixed costs £52,000
Capital employed £80,000
Cost of capital 10%

Which of the following is correct AND is the MOST appropriate measure of the performance of the
investment centre general manager in the period?

A Contribution/sales margin of 40%


B Net profit of £12,000
C Residual income of £4,000 (x)
D Return on capital employed of 5%

Question 23
Which of the following identifies a row of cells in a spreadsheet?
A AA-BB
B A1-H24
C A1-P1 (x)

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D A1-A24

Question 24
Which of the following are essential elements of a memo?

1. Subject or main theme


2. Reason for writing
3. A clear statement of what is required to recipient in response
4. Signature of the person sending it

A 2,3 and 4 only


B 1,2 and 3 only (x)
C 1,3 and 4 only
D All of the above

Question 25
The standard time for the manufacture of a product is 4 hours per unit.

for a recent period the following figures applied:

Budgeted output 2,500 units

Actual output 2,200 units

Actual hours worked 7,400

What was the activity (volume) ratio?

A. 118.9%

B. 74.0%
C. 88.0% (x)
D. 135.1%

Question 26
Two statements follow about a memorandum:

1. A memorandum can be used for any kind of communication that is best conveyed in writing and
which needs less detail than a formal letter
2. A memorandum cannot be used if important information is to be communicated

Which of the following is correct with regard to the above statements?

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A. Both statements are false
B. Both statements are true (x)
C. Statement 1 is false and statement 2 is true
D. Statement 1 is true and statement 2 is false

Question 27
A company completes a multi-part purchase order set when it purchases supplies. Copies are for
thesupplier, warehouse, purchasing department and accounts department.
What is the purpose of the accounts department copy?

A. To match against the invoice and goods received note (X)


B. To compare with the supplier's advice note
C. To place an order
D. To compare with the supplier's catalogue

Question 28
Which of the following businesses would be MOST likely to analyse their cost accounts by
individual customer order?

A. A retailer
B. An airline
C. A process manufacturer
D. A boat builder (X)

Question 29
Under what circumstances must an organisation register with the Data Protection Registrar?

A. When it has transactions with other organisations


B. When it holds inaccurate data
C. When it holds financial data
D. When it holds personals data (X)

Question 30
In a report where should detailed figures and calculations generally appear?

A. In the main body of the report


B. In the appendices (x)
C. On the front cover
D. In the summary

Question 31

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Which of the following is the correct response to a recurring variance that is uncontrollable by the
budget holder?

A. Take action to rectify the problem


B. Ensure that the budget is amended to eliminate future variances (x)
C. Disregard the variance
D. Explain that the variance is outside the control of the budget holder

Question 32
At the end of each month Worldcall Limited compares budgeted sales with actual sales. Consider the
following possible reasons for such comparison.

1. To identify and analyse its competitors' performance


2. To determine whether sales targets are being achieved
3. To allow corrective action to be taken if necessary
4. To identify weakness in the performance of its sales team

Which of the above explain(s) why it undertakes this comparison?

A. 1 only
B. 1,2 and 3 only
C. 2,3 and 4 only (x)
D. All of them

Question 33
Which of the following are examples of cost centre?

1. A group of machines
2. A number of gallons of water consumed
3. An output quantity for a given period
4. A number of area sales representatives

A. 3 only
B. 2 only
C. 1 and 4 only (x)
D. 1,2,3 and 4

Question 34
The following are activities that form steps in the 'continuum' known as the control process. they are not in
sequence.

1. Develop plan
2. Start operations
3. Compare actual performance with plan
4. Decide resources needed and performance standards
5. Decide goals and objectives
6. Assess goals and objectives achieved

Which one of the following is the correct sequence?

A. 5,1,4,2,3,6 (and back to), 5 (x)


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B. 5,4,1,2,3,6 (and back to), 6
C. 2,1,5,4,6,3 (and back to), 2
D. 1,4,2,3,5,6 (and back to), 1

Question 35
A machine operator in a production cost centre works a basic week of 37.5 hours at a basic rate of £9 per
hour. Overtime, paid at 130% of the basic rate, is worked to meet the general needs of thebusiness. The
machine operator worked a total of 45 hours in Week 9.
How much of the operator's gross wages in Week 9 would have been treated as a DIRECT labour
cost?

• £337.50
• £405.00 (x) – 45 x 9
• £492.75
• £425.25

Question 36
Considering the following

1. Information can only be presented in one form


2. Many computer packages will produce graphics relating to statistical data
3. Over-complicated displays can cause confusion
4. Diagrammatic presentations can aid understanding

Which of the above statements are correct?

A. 3 and 4 only
B. 1 and 2 only
C. 1,3 and 4
D. 2,3 and 4 (x)

Question 37
Which of the following statements applies to the preparation of management accounts?

A. The accounts must only report on financial mattes


B. The accounts must be prepared in accordance with legal requirements
C. The accounts may include both past and future data (x)
D. The accountant's reports are intended for shareholders

Question 38
Which is an example of non-routine information?

A. Working capital requirements at each month end


B. Monthly aged debtors analysis to set debt recovery timescales
C. Weekly bonus payments for the production team
D. Staff redundancy payments for a firm closing down (x)

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Question 39
What is the purpose o of a coding structure?

A. To reduce the amount of human error


B. To share production costs between products
C. To avoid giving managers too much information
D. To help place information into categories (x)

Question 40
Which of the following is MOST likely to be a requirement of Health and Safety legislation?

A. Computers must weight less than a specified amount


B. Printer cables must not exceed a specified length
C. The keyboard must be detachable from the display screen
D. Display screens must be adjustable for brightness and contrast (x)

Question 41
In absorption costing, what do product costs include?

A. Prime costs only


B. Fixed costs only
C. Variable costs only
D. Variable and fixed costs (x)

Question 42
Which of the following is the UK's Data Protection Act of 1998 designed to protect from unauthorised
disclosure of information?

A. Trade unions
B. Companies
C. Individuals (x)
D. Computer bureaux

Question 43
Which of the following functions is a credit controller likely to perform?

A. Controlling wage levels


B. Contracting debtors for payment (x)
C. Reducing costs
D. Increasing sales

Question 44
A small accounting business located in a suite needs to be able to share data
Which of the following computer configurations would BEST suit this business?

A. PCs connected by a WAN


B. Stand-alone PCs with CD re-write drives
C. Mainframe with terminals
D. PCs connected by a LAN (x)

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Question 45
Which of the following would NOT be included in administration overhead?

A. Costs of printing product catalogues and price lists


B. Depreciation of computers in accounting department
C. Salary of purchasing officer's secretary (x)
D. Tax and insurance for company car for personnel director

Question 46
What device converts signals from a computer into a form that can be transmitted along the
telephone network?

A. Modem (x)
B. E-mail
C. Central processing unit
D. Graphical user interface

Question 47
A company sells more than it manufactures in a period.
Which of the following explains the difference in profit between absorption and marginal costing
in the above situation?
A. Absorption costing profit is higher because of the difference in inventory levels
B. Absorption costing profit is lower because of the difference in inventory levels (x)
C. Absorption costing profit is higher because of overhead over-absorption
D. Absorption costing profit is lower because of overhead under-absorption

Question 48
A company sold 82,000 units of its single product in a period in which 84,000 units were manufactured.
Consider the following statements:
1. Stock value at the end of the period would be higher than at the beginning of the
period.
2. Stock values both at the beginning and at the end of the period would be higher
using absorption rather than marginal costing.
Are the statements true or false in relation to the situation described?
Statement 1 Statement 2
A. False False
B. False True
C. True False
D. True True (x)

Question 49
In a period where opening stocks were 15,000 units and closing stocks were 20,000 units, a firm had a
profit of £130,000 using absorption costing. If the fixed overhead absorption rate were £8 per unit, the
profit using marginal costing would be:
£90,000 (x) – (20,000-15,000) x $8 = 40,000; 130,000-40,000 = 90,000.
£130,000
A. £170,000

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D. impossible to calculate without more information

Question 50
The management accountant of Gympie Limited has already
allocated and apportioned the fixed overheads for the period
although she has yet to reapportion the service centre costs.
Information for the period is as follows:
Production departments Service department Total

1 2 Stores Maintenance
Allocated and apportioned £17,500 £32,750 £6,300 £8,450 £65,000
Work done by:
Stores 60% 30% - 10%
Maintenance 75% 20% 5% -
What are the total overheads including in production department 1 if the reciprocal method is
used to reapportion service centre costs?
A. £27,618
B. £28,171
C. £28,398 (x)
D. £28,453
Let: OH of Stores is S
OH of Maintenance is M
S = $6,300 + 0.05M
M = $8,450 + 0.1S
=> S = $6,300 + 0.05 (8,450 + 0.1S)
S = $6,300 + 422.5 + 0.005S
S = 6,756
M = 8450 + 0.1 x 6756 = 9,126

Production departments Service department Total


1 2 Stores Maintenance
Allocated and apportioned £17,500 £32,750 £6,300 £8,450 £65,000
Work done by:
Stores 4,053 2,027 (6,756) 676 0
Maintenance 6,845 1,825 456 (9126) 0
Total 28,398 0 0

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