Pass BA2 Exam in First Attempt Guaranteed 100% Cover Real Exam Questions [Jan-2022]
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NEW QUESTION 24
Each finished carton of product P contains 15 litres of liquid L.
During the production process there is an unavoidable loss of 20% of the liquid input. The standard price of liquid L is $2 per litre.
The standard ingredient cost for liquid L shown on the standard cost card for one carton of product P will be
- A. $37.50
- B. $36.00
- C. $30.00
- D. $18.75
Answer: A
NEW QUESTION 25
Refer to the exhibit.
X Enterprises runs a private nursing home for the elderly. The company are concerned that bed occupancy rates have been falling over the past 2 years with a consequential effect on profit. They have drawn up a budget for next year as follows:
The nursing home currently charges $90 per patient day.
The nursing home operates at 7,500 patient days per year. In an effort to increase occupancy rates the company are proposing to reduce the current price by 10% and increase spending on advertising by $10,000 each year. What effect will this have on the margin of safety?
- A. Reduce the margin of safety by 622 days
- B. Increase the margin of safety by 622 days
- C. Reduce the margin of safety by 1,178 days
- D. Increase the margin of safety by 1,178 days
Answer: C
NEW QUESTION 26
Refer to the exhibit.
A company has the following budget information for next year:
The raw materials usage budget for the years is:
Answer:
Explanation:
$170800
NEW QUESTION 27
Two rival furniture manufacturers have recently merged together. Before the merge each party had three outlets and one factory each. Now they have two factories, six stores with another 3 planned in the next year.
Previously, one company had operated with function cost centres, looking at costs incurred by each department whilst the other had chosen to look at costs per activity.
Whilst the companies were small this worked and costs were easy to manage and issues could be dealt with quickly and efficiently. Since then costs have gone out of control as the old systems no longer work for this large, nationwide company.
What is a suitable type of cost centre to use now?
- A. Activity
- B. Equipment
- C. Service location
Answer: C
NEW QUESTION 28
A company operates an integrated standard cost accounting system. The standard price of raw material A is
$20 per litre. At the start of period 1, the inventory of 500 litres of raw material A was valued at $20 per litre.
During period 1, 100 litres of raw material A were purchased at an actual price of $21 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? (Choose two.)
- A. An adverse material price variance should be recorded in the statement of profit or loss for period 2.
- B. The raw material inventory at the end of period 1 should include 100 litres valued at $21 per litre.
- C. An adverse material price variance should be recorded in the statement of profit or loss for period 1.
- D. 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.
- E. The raw material inventory at the end of period 2 should be valued at $20 per litre.
Answer: A,D
NEW QUESTION 29
The direct labour efficiency variance is:
- A. The difference between the actual rate of efficiency and the standard rate of efficiency for direct labour
- B. The standard wage rate multiplied by the difference between the actual hours worked and the standard hours needed for the output produced
- C. The difference between actual wages paid and the standard labour cost for the output produced
- D. The difference between the actual wages paid and what should have been paid for the hours worked
Answer: B
NEW QUESTION 30
Which of the following would be the most appropriate cost unit for a transport delivery service?
- A. Tonne delivered
- B. Gallon - tonne
- C. Tonne - mile
- D. Gallon
Answer: C
NEW QUESTION 31
A company currently allows a discount of 10% to customers who pay at the time of purchase.
If 20% of customers pay immediately, the extra sales needed in July to increase the cash receipts in that month by £9,000 are:
Answer:
Explanation:
£50001
NEW QUESTION 32
Which THREE of the following statements could explain why a favourable material usage variance has arisen?
- A. Purchase of higher quality materials
- B. Improved staff training of production staff
- C. Increased efficiency in the purchasing department
- D. Pilferage
- E. Improved production methods
- F. Increased quality control standards
Answer: A,B,E
NEW QUESTION 33
Refer to the exhibit.
SP, a manufacturing company, uses a standard costing system. The standard variable production overhead cost is based on the following budgeted figures for the year:
During the month of September, 5,300 actual hours were worked and 5,600 standard hours of output were produced. Total variable production overhead costs in September were $8,600.
What was the variable production overhead expenditure variance in September?
- A. $200 favourable
- B. $200 adverse
- C. $650 adverse
- D. $650 favourable
Answer: C
NEW QUESTION 34
Which of the following statements regarding variances is valid?
- A. Poor supervision could explain a favourable labour rate variance.
- B. Using higher quality material than standard could explain an adverse labour efficiency variance
- C. Improved maintenance of production machinery could explain an adverse material usage variance.
- D. An adverse labour rate variance could explain a favourable labour efficiency variance
Answer: D
NEW QUESTION 35
The budget actual statements for the production department for the latest period were as follows.
Notes.
1. The 10% increase in production was required to meet unexpected additional sales demand.
2. The production manager is responsible for negotiating the price of materials with suppliers.
3. The normal working time is 900 hours per period. Any overtime worked above these 900 hours is paid at a premium of 50%. In preparing the flexible budget for the latest period, which TWO of the following statements are correct?
- A. The material price should be flexed to the actual figure of S3.10 per kg.
- B. The basic pay hours should not be flexed; they should remain at 1,000 hours.
- C. The material quantity should be flexed to 60,000 + 10% = 66,000 kg.
- D. The overtime hours should be flexed to (1,000 + 10%) - 900 = 200 hours.
- E. The fixed costs should be flexed to S40.000 + 10% = $44,000.
Answer: A,C
NEW QUESTION 36
Which of the following statements relating to risk and uncertainty is correct?
- A. Uncertainty exists when we know all of the possible outcomes and their probabilities.
- B. Risk exists when we know all of the possible outcomes but not their probabilities.
- C. Uncertainty exists when we know all of the possible outcomes but not their probabilities.
- D. Risk exists when we do not know all of the possible outcomes.
Answer: C
NEW QUESTION 37
Refer to the exhibit.
The following costs apply to batch 325, which consists of 10000 units of identical products:
The company charges selling and administration costs at a rate of 20% of production costs and wishes to achieve a profit margin of 20% of sales.
What is the required selling price per unit of product?
Answer:
Explanation:
Give your answer to 2 decimal places.
£14.81
NEW QUESTION 38
Refer to the exhibit.
The budgetary control report for the latest period shows the following. Variances in brackets are adverse.
The sales volume contribution variance for the period was
- A. $500 favorable
- B. $4,500 favorable
- C. $26,700 adverse
- D. $27,200 adverse
Answer: D
NEW QUESTION 39
A flexible budget is:
- A. A budget that can be flexed if fixed costs are different from forecast
- B. A budget that can be flexed if the inflation level is different from forecast
- C. A budget that can be flexed if unit variable costs are different from forecast
- D. A budget that can be flexed if the activity level is different from forecast
Answer: D
NEW QUESTION 40
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