Online Access Free BA2 Practice Test

Refer to the exhibit.

A machine costing $47,000 will generate the following accounting profits:
The annual charge for depreciation is $9,000.
The payback period for the investment in the machine is closest to:

• A.3 years 3 months
• B.2 years 5 months
• C.1 year 8 months
• D.1 year 10 months

PQR Manufacturing Ltd. has £3,000,000 of fixed costs for the forthcoming period. The company produces a single product 'X', which has a selling price of £75 per unit and total cost of £50.
75% of the total cost represents variable costs.
What are the break-even units?

• A.240,000
• B.120,000
• C.80,000
• D.40,000

Refer to the Exhibit.

A company operates a batch costing system.
Production overhead costs are absorbed into the cost of batches using a direct labour hour rate. Other overhead costs are absorbed at a rate of 20% of total production cost. The company adds a mark-up of 10% to total cost in order to derive its selling prices.
Budgeted production overheads for the period are $44,000 and the budgeted level of activity is 8,800 direct labour hours.
The following data are available for batch number 309:
The required selling price per unit (to two decimal places) is:

The net present value (NPV) of an investment is as follows.
NPV at 14% = $6,320
NPV at 18% = ($4,600) negative
The internal rate of return (IRR) of the investment is closest to

• A.16.0%
• B.16.3%
• C.20.3%
• D.14.6%

A flat letting company analyses its costs by individual property. Which of the following costs would be considered an indirect cost of the property?

• A.Property maintenance costs
• B.Rent of office premises
• C.Solicitor's fees for collection of unpaid rent
• D.Council tax payable on vacant premises