Pass the CIMA Certificate BA2 Questions and answers with ExamsMirror

The company Andrew works for currently uses traditional absorption costing. He needs to convince his manager that the company should be using activity based costing instead.

Andrew has compiled this list of advantages:

(1)ABC will allow us to make better pricing decisions

(2)ABC will give us tighter control over costs as we will be able to pinpoint inefficiencies

(3)ABC will help improve our product mix by highlighting the best combination of materials

(4)ABC is suitable for our business as we only produce one product

Which statement or statements are INCORRECT?

Refer to the exhibit.

A company has the following budgeted sales for the next 6 month period:

Cash sales are 20% of the total and receive a cash discount of 5%. The remaining 80% of sales are on credit. 60% of credit customers pay within one month, the remaining 40% pay within two months.

The cash receipts for the month of July will be:

Which of the following are not relevant costs? Select ALL that apply.

Refer to the exhibit.

AM Ltd. makes and sells a single product for which the standard cost information is as follows:

Budgeted production for the period is 30,000 units.

The actual results for the period were as follows:

What is the variable overhead efficiency variance?

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 flat letting company analyses its costs by individual property. Which of the following costs would be considered an indirect cost of the property?

Refer to the exhibit.

ZAP publishes a monthly magazine aimed at the teenage market. It has drawn up a budget for next year as follows:

The magazine is currently sold at $2.00 per copy.

The margin of safety is

The following list contains many different types of costs for a business. However, only four of them would be considered costs centres. Which four?

The correlation coefficient is calculated using which of the following values;

Refer to the exhibit.

C Ltd manufactures three products, which require the same type of materials. The following contribution and profit per unit is available:

In a period in which labour hours are in short supply, which of the following options is the rank order of production?