ACCA F2 Revision Mock - Answers J12

ACCA Paper F2 Management Accounting June 2012

Revision Mock – Answers To gain maximum benefit, do not refer to these answers until you have completed the revision mock questions and submitted them for marking.

ACCA F2: MANAGEMENT ACCOUNTING

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REVISION MOCK ANSWERS

1

B – FALSE The definition given is that of a flexed budget.

2

D

3

C Economic order quantity

=

2C OD CH

Economic order quantity

=

2 x $10 × 80,000 units 0.90

Economic order quantity

=

1,333 units

4

B

5

D (65,800 + 82,600 + 60,100)/3 = 69,500 82,600 – 69,500 = 13,100 units

6

C High level = number of units: 48

Total cost $7,100

Low level = number of units: 23

Total cost $5, 200

Difference = 25 units

Difference in costs $1,900

Therefore variable cost per unit = $1,900 ÷ 25 units = $76 Fixed costs = $7100 – ($76 × 48 units) = $3,452

7

D

8

A

9

A

10

B

11

C

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ACCA F2: MANAGEMENT ACCOUNTING

12

A Fixed production overhead capacity variance = Budgeted hours worked

25,000

Less: actual hours worked

(24,000) –––––– 1,000 –––––– × standard fixed production overhead cost per hour $5 = $5,000 By only working 24,000 hours, overheads would be under-absorbed – an adverse effect.

13

D

14

A Overheads absorbed for the period

= $4.50 × 3,850 labour hours = $17,325

Overheads incurred for the period

= $18,225

Total overheads under-absorbed

= $900

15

C

16

D

17

D

18

C

19

B

20

A

21

C EOQ = √ ((2 × $30 × (5,000 × 4))/0.192) = 2,500 units

22

D

23

D

24

A Contribution per unit = $35 – ($8 + $8.50 + $3.50) = $15

4

Total contribution = $15 × 6,100 units sold

$91,500

Less = Fixed costs

($30,000)

Marginal profit

$61,500 KAPLAN PUBLISHING

REVISION MOCK ANSWERS

25

26

B Marginal costing profit

$61,500

Add: OAR included in closing stock $4 × 400 units

$1,600

Absorption profit for the month

$63,100

VC per unit = (13,900 – 10,100)/(3,000 – 2,000) = $3.80 FC in total = 10,100 – (2,000 × 3.80) = $2,500 Total cost for 3,750 units = ($2,500 × 1.05) + (3,750 × $3.80) = $16,875

27

B

28

C 10 + [20000/(20000- -30000)] × (20–10) = 14%

29

B Laspeyre price index ∑(current year price × base year quantity)/∑(base year price × base year quantity) × 100 [(55×150) + (80×250) + (82×275)]/[(50×150) + (70×250) + (75×275)] × 100 = 111

30

A Paasche quantity index ∑(current year quantity × current year price)/∑(base year quantity × current year price) × 100 [(175×55) + (300×80) + (325×82)]/[(150×55) + (250×80) + (275×82)] × 100 = 119

31

Fully completed units Partially completed 50 units × 60% completion Total

32

300 units 30 units 330 units

B Normal output = 12,000 – 10% × 12,000

10,800

Actual Output

11,050

Abnormal gain

250 kgs

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ACCA F2: MANAGEMENT ACCOUNTING

33

B Average cost per kg

=

(48,000 + 30,000 + 42,000) – (1,200 × 1) 12,000 – 1,200

= $11 per kg

34

C T0

($100,000)

T1–T5

Revenue

$7,000 × 12 × 3.605

$302,820

T1–T5

Cost

$17,750 × 3.605

($63,989)

T5

Residual value

$20,000 × 0.567

$11,340 $150,171

35

D Process 1 12,000

Material input (litres) Normal loss

Process 2 12,000

240

600

Expected output

11,760

11,400

Actual output

11,550

11,450

(210)

50

Abnormal (loss) / gain

36 Statement of Equivalent Units Material

Finished Goods Closing WIP

Conversion

Units

Degree of completion

Equivalent Units

4,500

100%

4,500

100%

4,500

500

100%

500

75%

375

Total EU Total cost Cost per EU Therefore value of closing WIP

Degree of completion

Equivalent Units

5,000

4,875

$14,500

$24,375

$2.90

$5.00

= 500 units × $2.90 + 375 equivalent units × $5.00 = $3,325

37

C Cluster sampling is similar to multi-stage sampling but the final step is to sample every item in the final sub-division.

6

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REVISION MOCK ANSWERS

38

D The difference in profit is due to fixed overheads included in inventory valuation. The profit is higher under absorption costing indicating that inventory has increased. Increase in inventory (value) = $8,000 Increase in inventory (units) = 8,000 ÷ 4 = 2,000 units Production = sales + increase in inventory = 12,000 + 2,000 = 14,000

39

C

40

A $2,000,000/$4,000,000 × ($5,000,000 – $4,000,000) = $500,000

41

Total sales value of the units produced = (14,000 × 10) + (15,000 × 14) = $350,000 Production cost apportioned to Beta = $850,230/$350,000 × (15,000 × 14) = $510,138 Closing inventory of Beta = 15,000 – 12,000 = 3,000 units Value of closing inventory = $510,138/15,000 × 3,000 = $102,028

42

C A service industry is an industry not involved in agriculture, mining, construction or manufacturing.

43

B Overheads incurred Over-absorption

$2,375

Therefore overheads absorbed OAR =

$74,375

$74,375 = $4.25 17,500

Budgeted hours =

44

$72,000

68,000 = 16,000 hours 4.25

48,000 units to produce + increase in stocks of 1,500 units = 49,500 units 49,500 units @ 2kgs per unit = 99,000 kgs Add increase in stocks of raw materials = 1,750 kgs Total material purchases budget 100,750 kgs

45

B The number of labour hours used to produce 5,000 units is 9,550, and these have cost $52,525. If we had paid the standard cost of $6 an hour, this would have cost $57,300, which gives us a favourable labour rate variance of $4,775.

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ACCA F2: MANAGEMENT ACCOUNTING

46

C We should have used 10,000 hours to produce 5,000 units. Instead, we have only used 9,950 hours. This is a favourable hour saving of 450 hours, which at the standard hourly rate of $6, gives a favourable labour efficiency rate of $2,700.

47

B

48

A OAR = $4.00 per labour hour Expenditure Variance = $64,000 – $62,500 = $1,500 (favourable) Capacity Variance = (16,000 hours – 15,000 hours) × $4.00 / hour = $4,000 (adverse) The total of these two variances is $2,500 (adverse) OR Actual overheads = $62,500 Absorbed overhead = 15,000 × 4 = $60,000 Overhead under-absorbed = $2,500

49

A

50

B

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