CPA Management Accounting - MA Exam Practice Test
In the three months to 31 March 2013, Pegem Co paidlaborcosts of $62,597.60 for 6,760laborhours. This included 182 hours of non-productivelabor. The standardlaborcost of the product produced is $21.96, based on a standard time of 2.4 hours per unit.
What was thelaborrate variance for the three months to 31 March 2013?
What was thelaborrate variance for the three months to 31 March 2013?
Correct Answer: C
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Each division of Calcul Co manufactures a single product.
In one of the divisions the standard profit of each unit is calculated as:
Selling price$135
Total cost$100
Profit$35
It is estimated that fixed costs comprise 54% of the total cost of the product.
The budgeted production and sales volumes for the next month is 3,954 units.
What is the margin of safety?
In one of the divisions the standard profit of each unit is calculated as:
Selling price$135
Total cost$100
Profit$35
It is estimated that fixed costs comprise 54% of the total cost of the product.
The budgeted production and sales volumes for the next month is 3,954 units.
What is the margin of safety?
Correct Answer: C
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At 31 May 2010 the non-current assets of Solace Co were reported on the statement of financial position at a value of $1,643,800.
The assets had cost $2,200,000. Taxation allowances of $1,200,000 had been claimed.
The tax rate is currently 22%, and is expected to reduce to 20% in the near future.
The deferred tax liability at 31 May 2009 was $200,000.
What value should be reported on the income statement for the year to 31 May 2010 for deferred taxation?
The assets had cost $2,200,000. Taxation allowances of $1,200,000 had been claimed.
The tax rate is currently 22%, and is expected to reduce to 20% in the near future.
The deferred tax liability at 31 May 2009 was $200,000.
What value should be reported on the income statement for the year to 31 May 2010 for deferred taxation?
Correct Answer: D
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Capac Co uses activity based costing (ABC). Overhead costs for the next year are:
ExpenseTotal expenditureVolume of activity $
Set up costs1,139,2003,200 set ups
Raw material handling488,9005,000 materials orders
One of the company's products is manufactured in batches of 500 units, with each batch requiring one set up and 50 materials orders.
Using ABC, what is the overhead cost of 220 units?
ExpenseTotal expenditureVolume of activity $
Set up costs1,139,2003,200 set ups
Raw material handling488,9005,000 materials orders
One of the company's products is manufactured in batches of 500 units, with each batch requiring one set up and 50 materials orders.
Using ABC, what is the overhead cost of 220 units?
Correct Answer: C
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PAQ Plc makes three products in a period.
Quantity (units)Laborhoursper unit Product P1,0004 Product A2,0006 Product Q3,0003 Total6,000
Overheads for the period are $30,000 and they are absorbed on the basis oflaborhours. What is the fixed overhead cost absorbed by a unit of Product A?
Quantity (units)Laborhoursper unit Product P1,0004 Product A2,0006 Product Q3,0003 Total6,000
Overheads for the period are $30,000 and they are absorbed on the basis oflaborhours. What is the fixed overhead cost absorbed by a unit of Product A?
Correct Answer: B
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On 1 February 2011, Hopper Co acquired 480,000 of the 600,000 ordinary shares of Space Co at a price of $4*28 per share. At that date the book value of the net assets of Space Co was $2,356,920, and the fair value of land owned by Space Co exceeded the book value by $110,000.
Assuming that the full fair value method of valuation is used, what is the value of goodwill on acquisition?
Assuming that the full fair value method of valuation is used, what is the value of goodwill on acquisition?
Correct Answer: C
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At 1 November 2009 Boho Co's statement of financial position reported a deferred tax liability of $36,560. At 31 October 2010 the net book value of non-current assets was $135,400 greater than the tax written down value.
The current rate of tax is 22%. It has recently been announced that this will be reduced to 20% during the next financial year.
What should be reported in the statement of comprehensive income for the year to 31 October 2010 in respect of deferred tax?
The current rate of tax is 22%. It has recently been announced that this will be reduced to 20% during the next financial year.
What should be reported in the statement of comprehensive income for the year to 31 October 2010 in respect of deferred tax?
Correct Answer: B
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Which of the following statements about divisionalizationis/are correct?
(i)
Divisionalizationleads to head office managers having reduced control over operational decisions in an operating unit.
(ii)
Achieving corporate goals will be the only factor considered by divisional managers when they are making decisions.
(iii)
Divisionalizationallows operating decisions to reflect the local conditions of an operating unit.
(i)
Divisionalizationleads to head office managers having reduced control over operational decisions in an operating unit.
(ii)
Achieving corporate goals will be the only factor considered by divisional managers when they are making decisions.
(iii)
Divisionalizationallows operating decisions to reflect the local conditions of an operating unit.
Correct Answer: B
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