Free Access CIMA.BA2.v2022-02-11.q137 Practice Test (Page 20)

Question 91

Which of the following may result in a favourable material price variance? (Select ALL that apply.)

A.Inefficient purchasing

B.Efficient purchasing

C.Material price decrease

D.Inflation of prices

E.Discounted products

Question 92

Refer to the exhibit.

A.£250 adverse

B.£250 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.£260 adverse

E.£260 favourable

Question 93

Data for the latest period for a company which makes and sells a single product are as follows:

There were no budgeted or actual changes in inventories during the period.
The variable overhead expenditure variance for the period was:

A.$462 favourable.

B.$2,202 adverse.

C.$462 adverse.

D.$2,202 favourable.

Question 94

Refer to the exhibit.

The budget for product Sentra for the month of August is given below:
* Each unit of Sentra requires 4kg of raw materials.
* The raw materials purchases budget for the month of August is:

A.496,000 kg

B.516,000 kg

C.512,000 kg

D.722,000 kg

Question 95

A company operates an integrated standard cost accounting system. The standard price of raw material A is S20 per litre. At the start of period 1, the inventory of 500 litres of raw material A was valued at S20 per litre.
During period 1. 100 litres of raw material A were purchased at an actual price of S21 per litre. During period
2. 550 litres of raw material A were issued to Job 789.
In respect of the above events, which TWO of the following statements are correct?

A.The first 500 litres of raw material A issued should be debited to the Job 789 account at $20 per litre, and the remaining 50 litres at $21 per litre.

B.An adverse material price variance should be recorded in the statement of profit or loss for period 2.

C.An adverse material price variance should be recorded in the statement of profit or loss for period 1.

D.The raw material inventory at the end of period 2 should be valued at $20 per litre.

E.The raw material inventory at the end of period 1 should include 100 litres valued at $21 per litre.

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Question 91

Question 92

Question 93

Question 94

Question 95

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