Free Access CIMA.BA2.v2022-02-11.q137 Practice Test (Page 13)

Question 56

Within the relevant range, a variable cost is a cost which:

A.cannot be forecast with any degree of accuracy because of its variability.

B.varies in total in proportion to the level of activity.

C.varies in total in proportion to the level of inflation.

D.varies per unit in proportion to the level of activity.

Question 57

Which of the following is the correct definition is an annuity:

A.A set of regular payments of increasing value.

B.A chain of regular cash flows up to a certain period of time.

C.A series of cash outflows which goes on forever.

Question 58

Which THREE of the following are parts of the master budget? (Choose three.)

A.Finished goods inventory budget.

B.Budgeted statement of profit or loss.

C.Cash flow budget.

D.Sales budget.

E.Administration overhead budget.

F.Budgeted statement of financial position.

Question 59

Refer to the exhibit.

WS operates an integrated accounting system. Transactions relating to production overheads for the month of May were as follows:
Indirect Material costs were $15,000
Indirect Labour Costs were $45,000
Production overheads of $58,000 were incurred during the period.
Depreciation of factory machinery amounted to $32,000.
Overheads costs absorbed by production using a standard absorption rate was $164,000 for the period.
What are the correct entries to record the absorption of production overheads for the period?
The correct set of entries to record the absorption of production overheads for the period is:

A.A

B.B

C.D

D.C

Question 60

Refer to the exhibit.

A.£260 adverse

B.£260 favourable

C.Fabex Ltd. manufactures a household detergent called "Clear". The standard data for one of the chemicals used in production (chemical XTC) is as follows:
(a) 50 litres used per 100 litres of 'Clear' produced
(b) Budgeted monthly production is 1000 litres of 'Clear'.
The closing inventory of chemical XTC for November valued at standard price was as follows:
Actual results for the period during December were as follows:
(a) 500 litres of chemical XTC was purchased for £1300.
(b) 550 litres of chemical XTC was used.
(c) 900 litres of 'Clear' was produced.
It is company policy to extract the material price variance at the time of purchase.
What is the total direct material usage variance (to the nearest whole number)?

D.£250 adverse

E.£250 favourable

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Question 56

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Question 58

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Question 60

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