Pass the CIMA Certificate BA2 Questions and answers with ExamsMirror

The following is an extract from a budgetary control report for the latest period:

The budget variance for prime cost is:

A company has spent $5,000 on a report into the viability of using a subcontractor. The report highlighted the following:

A machine purchased six years ago for $30,000 would become surplus to requirements. It has a written-down value of $10,000 but would be resold for $12,000.

A machine operator would be made redundant and would receive a redundancy payment of $40,000.

The administration of the subcontractor arrangement would cost the company $25,000 each year.

Which THREE of the following are relevant for the decision? (Choose three.)

Which of the following is a relevant cost?

A company’s policy is to hold closing inventory each month equal to 10% of the next month’s budgeted sales volume. The budgeted sales volumes of product Q for months 1 and 2 are 1,660 units and 2,300 units respectively.

The production budget for product Q for month 1 is:

In a company that manufactures many different products on the same production line, which TWO of the following would NOT be classified as indirect production costs? (Choose two.)

A company uses an integrated accounting system. The following data relate to the latest period.

At the end of the period, the entry in the production overhead control account in respect of under or over absorbed overheads will be:

A company uses standard absorption costing. Budgeted and actual data for the latest period are as follows.

What was the production overhead absorption rate per unit?

A company produces a single product for which the following cost data are available.

Analysis by the management accountant has shown that 100% of direct material cost and 50% of direct labour cost are variable costs. 50% of production overhead and 100% of selling and distribution overhead are variable costs.

What is the marginal cost per unit?

The budget and actual cost statements for the production department for the latest period were as follows.

Notes.

The 10% increase in production was required to meet unexpected additional sales demand.

The production manager is responsible for negotiating the price of materials with suppliers.

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? (Choose two.)

Which of the following is a valid definition of a cash budget?