MOCK QUESTIONS

SECTION A – ALL 35 QUESTIONS ARE COMPULSORY AND MUST BE

ATTEMPTED

Each question is worth 2 marks

1 Which TWO of the following are direct expenses?

A The cost of special designs, drawings or layouts for a specific job.

B The hire of tools or equipment for a particular job.
C Salesmen’s wages.
D Rent, wages and insurance of a factory.

ACCA 2 Storm plc has just developed a new product to be called the Rain and is now considering
putting it into production.

Which of the following costs/revenues would be relevant to an NPV calculation (tick in

the box)?

F2 (MA/FMA) Relevant?
Costs incurred in the development of Rain amounting to $480,000
Purchase of new machinery at a cost of $2,400,000 payable immediately
Depreciation charge for the new machinery of $600,000 per annum
Sales price of $80 per Rain
Management Accounting
3 What is the weighted price index, using 20X1 as the base year, based on the following
data?

Product Quantity 20X1 Price 20X2 Price

Towel 250 $2.50 $2.00
QUESTIONS Bucket 300 $1.50 $3.00

A 101.5
B 145.5
Mock A C 84.1
D 108.4

We're not sure whether it is Becker's mock exam or

Kaplan's, or someone else's. Whomever it is, we are
grateful to them.

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A CCA MA AND FMA: MANAGEMENT A CCOUNTING MOCK QUESTIONS

4 A company wants to calculate the economic order quantity (EOQ) for an item of inventory. 7 Binsey Co uses regression analysis to forecast monthly costs. The accountant has
The following data is available in a spreadsheet. produced the following equation:

A B TC = 4Q + 600
1 Monthly demand 1,000 units Where Q is the number of units produced each month and TC is the total cost in a month.
2 Cost of placing an order $25 Which of the following statements is correct?
3 Cost of holding one unit of inventory $2.50 per annum A Variable costs = $600 per unit, Fixed costs = $4 per month

4 Economic order quantity ?? B Annual fixed costs = $28,800

C Annual fixed costs = $7,200
What formula is required to calculate the EOQ?
D Variable costs = $4 per unit, Fixed costs = $7,200 per month
A B4 = SQRT((2*B3*B1*12)/B2)
B B4 = SQRT(2*B3*B1*12)/B2 8 Burgess operates a continuous process into which 3,000 units of material costing $9,000
was input in a period.
C B4 = SQRT((2*B2*B1*12)/B3)
Conversion costs for this period were $11,970 and losses, which have a scrap value of $1.50
D B4 = SQRT(2*B2*B1)/B3
per unit, are expected at a rate of 10% of input. There was no opening or closing inventory
and output for the period was 2,900 units.
5 Kiveton Cleaning Services supplies its employees with protective clothing. One such item is
protective gloves. What was the cost per unit of output?

Records from the stores department for January showed: A $6.84

1 Jan Opening inventory 150 pairs @ $2 each B $6.99

7 Jan Purchases 40 pairs @ $1.90 C $7.76

15 Jan Issues 30 pairs D $7.60

29 Jan Issues 35 pairs 9 When opening inventory was 10,000 litres and closing inventory was 12,000 litres, a
What is the value of the issues and the closing inventory if the FIFO method is used? company had a profit of $72,000 using absorption costing. The fixed overhead absorption
rate was $5 per litre.
Issues Closing inventory
A $130 $246 What would be the profit under marginal costing?

B $129 $247 $
C $246 $130
D $247 $129 10 Mountain Venture has net assets of $540,000 and made profits of $280,000 for the year.
The cost of capital is 8% per annum.
6 The following data is available for Tallus Co in period 2.
What are the ROI and RI for Mountain Venture?
Actual overheads $225,900 ROI RI
Actual machine hours 7,530 A 4% $43,200
Budgeted overheads $216,000 B 15% $22,400
The budgeted overhead absorption rate was $32 per hour C 48% $517,600
What were the budgeted machine hours? D 52% $236,800

hours

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A CCA MA AND FMA: MANAGEMENT A CCOUNTING MOCK QUESTIONS

11 If a company compares its procedures with another company that is does not compete 16 The value for money concept used in assessing performance in a not for profit organisation
with. What is this form of benchmarking is known as? revolves around the 3Es.

A Strategic What are the 3Es?

B Competitive 1 Efficiency
C Functional 2 Effectiveness
D Internal 3 Ecology
4 Economy
12 A retailer has mean sales of 75 per day and a standard deviation of 15 sales.
A 1, 2 and 3 only
What is the coefficient of variation as a % (to the nearest whole number)?
B 1, 3 and 4 only
% C 2, 3 and 4 only
D 1, 2 and 4 only
13 A company had a budgeted fixed production overhead of $7,500 with budgeted output of
1,000 units. The company absorbs overheads using labour hours and had budgeted to work 17 A company sells a product with the following unit standard cost card:
10,000 hours. Actual output was 790 units, 8,848 hours were worked and the actual $
overhead was $6,800. Selling price 50
What were the fixed overhead capacity and efficiency variances for the period? Variable cost 20
Capacity Efficiency Fixed production overhead 5
__
$ $ Profit 25
A 864 (A) 1,575 (F) __
This card is based on budgeted sales of 1,700 units.
B 864 (A) 711 (A)
Actual selling price was $48, unit variable costs were $22 and unit fixed cost $4. Actual sales
C 1,575 (A) 711 (F)
were 1,800 and 1,950 units were made. The company currently uses marginal costing.
D 864 (F) 711 (F)
What was the sales volume variance?

14 If a population is very large but opinions need to be sourced in the most efficient way A $4,500 (F)
from the entirety of a couple of groups, which method of sampling would be the most B $3,000 (F)
appropriate?
C $5,000 (F)
A Random
D $6,000 (F)
B Multi‐stage
C Cluster 18 Identify whether each of the following statements about big data analytics in organisations
is true or false?
D Quota
True False
15 Which of the following is a building firm who constructs extensions to private houses It can improve forecasting to aid decision making
most likely to use?

A Service Costing It can help to provide more detailed, relevant and up to date
B Batch Costing performance measurement.

C Job Costing
D Process Costing

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A CCA MA AND FMA: MANAGEMENT A CCOUNTING MOCK QUESTIONS

19 A veterinarian should take on average 20 minutes to stitch a dog’s wound. In one day the 22 The production machinery of Grape Co is nearing the end of its useful life and it needs to be
veterinarian stitched 5 dogs taking 1 hour in total. replaced.

What is the efficiency ratio for the veterinarian? Estimates have been made for the initial capital cost, proportional sales income and
operating costs of the replacement machine, which is expected to have a useful life of three
A 100%
years:
B 83%
Initial investment $500,000
C 167%
Cash flows
D 60%
Year Sales income Operating costs
1 $280,000 $100,000
20 The numbers below have been calculated to use in a linear regression analysis, in order to
estimate the total cost line for a company. 2 $330,000 $120,000
3 $390,000 $130,000
x = number of units The company appraises capital investment projects using a cost of capital of 10% per
y = total costs (in $000) annum.
x = 25 What is the NPV of this machine?

y = 271 A $32,340

xy = 550 B $150,000

x2 = 65 C $1,032,340

y2 = 30,275 D $850,000

n = 15 23 A company uses marginal costing. The following variances occurred in the last period when
What is the variable cost per unit using regression analysis (to two decimal places)? the actual net profit was $80,000.

$ Materials $1,800 adverse

Labour $2,000 favourable
21 Over the last two months the following production costs were incurred by Department Z: Overheads $1,400 adverse
Level of activity Production cost Sales price $1,000 favourable
May 2,180 units $13,405 Sales volume contribution $1,800 favourable
June 3,200 units $15,700
What was the budgeted net profit for the last period?
In July budgeted production was 2,560 units, what would the budgeted production cost
be? A $83,000

A $14,260 B $81,600

B $15,740 C $77,000

C $12,560 D $78,400

D $14,552.50

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A CCA MA AND FMA: MANAGEMENT A CCOUNTING MOCK QUESTIONS

24 Field is considering a new project. Details of the proposed project are as follows: 28 The instruction to a market researcher is to ‘stop 50 men and 70 women to do the
questionnaire’.
Life of project: 6 years
Initial cost: $85,000 What type of sampling is being used?
Annual savings: $24,000 A Stratified sampling
NPV at 5%: £36,824 B Quota sampling
What is the internal rate of return for this project to the nearest 1%? C Cluster sampling
A 16% D Random sampling
B 18%
29 ABC Co sells to both cash and credit customers. It expects that 40% of its sales will be paid
C 20% for in cash and of the remainder, 50% will be paid the month after sale, 40% two months
D 22% after sale and the rest will remain unpaid.
Jan Feb Mar Apr May Jun
25 Which of the following are features of Activity Based Costing?
$000s $000s $000s $000s $000s $000s
1 Cost pools 100 120 140 150 160 180
2 Cost drivers What is the value of cash receipts forecast in the month of April?
3 Low levels of overhead costs A $182,000

A 1 only B $130,800

B 1 and 2 only C $116,000

C 3 only D $212,000

D 1, 2 and 3 30 The results of a customer survey are normally distributed with a mean score of 75 and a
standard deviation of 15.
26 Which of the following would NOT be classified as a production overhead in a food
processing company? What is the percentage probability that a customer scored more than 90 (to 2 decimal
places)?
A The cost of renting the factory building
B The salary of the factory manager %

C The depreciation of equipment located in the materials store

31 Which TWO of the following are advantages of using the Balanced Scorecard approach to
D The cost of ingredients
appraising performance?

27 A company produces two types of tables, the farmhouse and the cottage which require 10 A Performance is appraised from a much wider view point
and 16 labour hours respectively. The budgeted data for the next period is as follows: B Managers can easily distort measures to their advantage
Farmhouse Cottage C Comparison with different organisations is made easier
Sales 7,500 units 12,000 units
D It should lead to long term success rather than short term improvements
Opening inventory of finished goods 1,800 units 2,400 units
Inventory of finished goods is budgeted to be reduced by 50% by the end of the next
period.
What are the total budgeted labour hours for the next period?
A 295,200 hours
B 267,000 hours
C 238,800 hours
D 210,600 hours

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