Question 16
A pharmaceutical company manufactures pesticides which contain highly toxic chemicals.
In the context of environmental costing, which of the following would be classified as an external failure cost?
In the context of environmental costing, which of the following would be classified as an external failure cost?
Question 17
A museum charges a reduced entrance fee for students in full-time education. The budgeted cost per customer is the same regardless of the entrance fee paid.
4,000 customers were budgeted to visit the museum during period 6, with 25% of customers paying the reduced fee.
3,000 customers visited the museum during period 6 and 1,000 of these paid the reduced entrance fee.
Costs were as budgeted but the actual full-priced entrance fee was $2 higher than budgeted.
Which of the following statements is true?
4,000 customers were budgeted to visit the museum during period 6, with 25% of customers paying the reduced fee.
3,000 customers visited the museum during period 6 and 1,000 of these paid the reduced entrance fee.
Costs were as budgeted but the actual full-priced entrance fee was $2 higher than budgeted.
Which of the following statements is true?
Question 18
A company's product has the following standard selling price, variable costs and contribution:
Budgeted sales and production was 20,000 units and actual was 19,500 units.
Due to a market downturn the production and sales budget should have been 10% lower.
What is the operational sales volume contribution variance?
Budgeted sales and production was 20,000 units and actual was 19,500 units.
Due to a market downturn the production and sales budget should have been 10% lower.
What is the operational sales volume contribution variance?
Question 19
A company's product range includes Product N. The costs relating to Product N are shown below:
The direct labour costs relate to specialists employed to work wholly and exclusively with Product N.
If the company stopped making Product N, the insurance overhead cost would cease, but overhead cost J would be unaffected. Both overheads are absorbed in direct proportion to material costs.
Which of the following costs should be used in the decision whether to stop making Product N?
The direct labour costs relate to specialists employed to work wholly and exclusively with Product N.
If the company stopped making Product N, the insurance overhead cost would cease, but overhead cost J would be unaffected. Both overheads are absorbed in direct proportion to material costs.
Which of the following costs should be used in the decision whether to stop making Product N?
Question 20
The manager of a recently opened cafe is deciding how many sandwiches to make each day.
The sandwiches are made in the morning before the cafe opens.
If demand exceeds the number of sandwiches made in the morning no extra sandwiches can be made during the day. Any unsold sandwiches are thrown away at the end of each day.
Daily demand is uncertain but is predicted to be 10, 20, 30 or 40 sandwiches.
The following regret matrix has been prepared:
If the minimax regret criterion is used to make the decision, the manager will choose to make:
The sandwiches are made in the morning before the cafe opens.
If demand exceeds the number of sandwiches made in the morning no extra sandwiches can be made during the day. Any unsold sandwiches are thrown away at the end of each day.
Daily demand is uncertain but is predicted to be 10, 20, 30 or 40 sandwiches.
The following regret matrix has been prepared:
If the minimax regret criterion is used to make the decision, the manager will choose to make: