JJ2023 FMA final- Liv Sin (1).pdf

6/19/23, 1:41 PM Exam.net - Easy-to-use and secure digital exams [email protected] 2023-06-15 100/100p Foundations in Accountancy/ACCA Management Accounting (FMA/MA)...

6/19/23, 1:41 PM Exam.net - Easy-to-use and secure digital exams [email protected] 2023-06-15 100/100p Foundations in Accountancy/ACCA Management Accounting (FMA/MA) Final Exam January-June 2023 Exam Exam.net Format Time 2 hours Allowed Section A Section A – ALL 35 questions are compulsory and MUST be answered Section B Section B – ALL THREE questions are compulsory and MUST be answered Instructions: Take a few moments to read all questions attentively and carefully follow all the instructions given before attempting this exam. You may find the toolkit to use during the Exam in the top left tab: Formula sheet PRESENT VALUE TABLE ANNUITY TABLE BY STARTING THE EXAM, YOU HAVE CONFIRMED TO FOLLOW ALL GUIDELINES GIVEN BY THE INVIGILATOR. I wish you all the best luck! 1. Section A: Multiple Choice Questions All questions within each section are compulsory. https://exam.net/pdf-builder/students/44744859?expires=1687761509&locale=en&settingsId=309079&signature=15c6d3e5b5cfe1eea0453083b2bc4… 1/17 6/19/23, 1:41 PM Exam.net - Easy-to-use and secure digital exams a) The performance of non-profit seeking organisations cannot be judged by profitability. Which TWO of the following alternative approaches to performance measurement would be suitable for a human rights campaign organisation? Number of members and volunteers Speed of response to emerging issues Return on assets Return on investment Correct answer. 2/2p b) A train covers a distance of 30 miles. It travels the first 20 miles at a speed of 30 miles per hour, then the remaining 10 miles of the journey at a speed of 60 miles per hour. What is the mean speed for the whole journey? 40 45 36 42 Correct answer. 2/2p c) $15,000 is invested for five years at an interest rate of 10% per annum and at the end of year 3, $5,000 is withdrawn. How much remains at the end of year 5? $14,965 $17,503 $18,108 $19,158 Correct answer. 2/2p d) Which of the following statements best describes direct costs? Costs under the direct control of a manager Costs to be paid within the current accounting period Costs directly identified with a product or service Costs passed directly to customers Correct answer. 2/2p https://exam.net/pdf-builder/students/44744859?expires=1687761509&locale=en&settingsId=309079&signature=15c6d3e5b5cfe1eea0453083b2bc4… 2/17 6/19/23, 1:41 PM Exam.net - Easy-to-use and secure digital exams e) Letsdobusiness.com is trying to establish a budgeted quantity of material purchases for the coming quarter. Opening inventory of material will be 30,000 kg, and closing inventory is budgeted to be 50,000 kg. There are no budgeted changes in finished goods inventory. Letsdobusiness.com produces two products, the IT2001 and the NET1, for which the following data is available. How many kg of raw material should be purchased? (DO NOT input any symbols, only numbers are accepted.) Answer: 620000 Correct answer. 2/2p f) The standard cost of the actual quantity of raw material G issued to production was $150,000. The materials usage variance was $10,000 favourable. The materials price variance was $30,000 adverse. The increase in raw material inventories was $10,000 at standard cost. What was the amount spent on purchases of raw materials for the period? $160,000 $170,000 $180,000 $190,000 Correct answer. 2/2p g) Swan Co has a standard costing system. The following information relates to variable overheads (absorbed on a labour hour basis) for a period. Budgeted cost $250,000 Actual cost $226,500 Labour hours Budgeted 100,000 hours Actual 86,000 hours What was the variable overhead expenditure variance? $11,500 adverse $20,393 adverse $23,500 adverse $23,500 favourable https://exam.net/pdf-builder/students/44744859?expires=1687761509&locale=en&settingsId=309079&signature=15c6d3e5b5cfe1eea0453083b2bc4… 3/17 6/19/23, 1:41 PM Exam.net - Easy-to-use and secure digital exams Correct answer. 2/2p h) A manufacturing business is introducing Total Quality Management (TQM). Which TWO of the following statements relating to TQM are true? TQM requires a commitment to quality across the whole organisation. The philosophy of TQM is to 'get it right first time'. There will be increased emphasis on inspection of output to ensure it is of the required quality. There will be maximum acceptable defect levels. Correct answer. 2/2p i) A company has budgeted to produce and sell 6,000 units of a single product. The standard $ cost per unit was as follows. Direct materials 20 Direct labour 15 Variable overhead 10 Fixed production overhead 5 In the period covered by the budget, the following actual results were recorded Production and sales 7,000 units Fixed production overheads $28,000 What is the favourable fixed production overhead expenditure variance? (DO NOT input any symbols, only numbers are accepted) Answer: 2000 Correct answer. 2/2p j) Which of the following is MOST likely to be classified as a step cost? Raw materials Fuel Photocopier paper Supervisor salary Correct answer. 2/2p k) Which TWO of the following are characteristics of job costing? Customer-driven production Multiple products produced simultaneously in small groups Homogeneous products Each order is of generally for a short duration Correct answer. 2/2p https://exam.net/pdf-builder/students/44744859?expires=1687761509&locale=en&settingsId=309079&signature=15c6d3e5b5cfe1eea0453083b2bc4… 4/17 6/19/23, 1:41 PM Exam.net - Easy-to-use and secure digital exams l) Run4fun are launching a new smart watch for runners. There is some uncertainty over the level of sales expected in the first month following the launch. The following estimates along with their associate probabilities have been made: Sales units Probability 1,000 0.3 4,000 0.5 8,000 0.2 What is the expected level of sales? 4,333 13,000 4,000 3,900 Correct answer. 2/2p m) Hakkinen Co wishes to minimise its inventory costs. Order costs are $10 per order and holding costs are $0.01 per unit per month. Hakkinen Co estimates annual demand to be 150,000 units. What is the optimal reorder quantity? (DO NOT input any symbols, only numbers are accepted) Answer: 5000 Correct answer. 2/2p n) An organisation has found that there is a linear relationship between production volume and production costs. It has found that a production volume of 800 units corresponds to production costs of $10,000 and that a production volume of 1,000 units corresponds to production costs of $12,000. What are the production costs for a production volume of 2,000 units? $12,000 $20,000 $22,000 $32,000 Correct answer. 2/2p o) Brad Co absorbs production overhead in the assembly department on the basis of direct labour hours. Budgeted direct labour hours for the period were 300,000. The production overhead absorption rate for the period was $3 per direct labour hour. Actual results for the period were as follows. Direct labour hours worked 320,000 Production overheads incurred $930,000 What was the value of the over-absorbed production overhead for the period? (DO NOT input any symbols, only numbers are accepted) Answer: 30000 Correct answer. 2/2p https://exam.net/pdf-builder/students/44744859?expires=1687761509&locale=en&settingsId=309079&signature=15c6d3e5b5cfe1eea0453083b2bc4… 5/17 6/19/23, 1:41 PM Exam.net - Easy-to-use and secure digital exams p) Which of the following statements correctly describes a perpetual inventory system? A system under which records are updated for each receipt and issue of inventory as it occurs A system under which records are updated at the end of each week, reflecting each receipt and issue of inventory that occurred during the week A system that relies upon a full physical count of inventory every month end A system which utilises the economic order quantity (EOQ) model to minimise inventory costs Correct answer. 2/2p q) A firm which bottles shampoo selects some filled bottles for examination. The procedure used is that two random numbers are chosen, x and y. Starting at the xth bottle filled, every bottle at an interval of y is then chosen for examination. Which BEST describes this type of sampling? Multi-stage Random Systematic Stratified Correct answer. 2/2p r) The following table shows the average salary of part qualified accountants in four different regions of a country. What type of diagram would BEST highlight the differences between areas? A pie diagram A multiple bar chart A percentage component bar chart A simple bar chart Correct answer. 2/2p https://exam.net/pdf-builder/students/44744859?expires=1687761509&locale=en&settingsId=309079&signature=15c6d3e5b5cfe1eea0453083b2bc4… 6/17 6/19/23, 1:41 PM Exam.net - Easy-to-use and secure digital exams s) Senior management at Purple Co are considering the introduction of non-financial performance measures. Which of the following is NOT an advantage of non-financial measures over financial measures? Non-financial measures can be selected as a means of implementing an organisation’s strategy Non-financial performance measures provide an earlier warning signal of problems Non-financial measures cover issues such as customer service which are key in obtaining competitive advantage The relative importance of non-financial measures is more easily judged Correct answer. 2/2p t) Black Mountain Co pays its employees a guaranteed weekly wage of $200, plus $0.50 per piecework hour produced. In a certain week Martin produces the following output. What is Martin's pay for the week (to two decimal places)? (DO NOT input any symbols, only numbers are accepted) Answer: 232.50 Correct answer: 2/2p u) 340 litres of chemical X were produced in a period. There is a normal loss of 10% and an abnormal loss of 5% of the material input into the process. How many litres of material were input into the process during the period? 377 litres 400 litres 380 litres 358 litres Correct answer. 2/2p https://exam.net/pdf-builder/students/44744859?expires=1687761509&locale=en&settingsId=309079&signature=15c6d3e5b5cfe1eea0453083b2bc4… 7/17 6/19/23, 1:41 PM Exam.net - Easy-to-use and secure digital exams v) An index-linked pension of $10,000 a year became payable on 1 January 20X5. Details of the index of retail prices are shown below. What is the annual pension amount, payable from 1 January 20X7? $10,297 $10,472 $10,906 $13,560 Correct answer. 2/2p w) Solly Solicitors has 50 reams of headed notepaper in inventory and 100 reams on order with suppliers. If the free inventory is 70 reams, how many reams of headed notepaper have been requisitioned but not yet issued? (DO NOT input any symbols, only numbers are accepted) Answer: 80 Correct answer: 2/2p x) Barlow operates a continuous process into which 3,000 units of material costing $10,000 were input during the period. Conversion costs for the period were $10,970 and losses are expected at a rate of 10% of input. These losses can be sold for $1.50 per unit. There were no opening or closing inventories, and output for the period was 2,900 units. What was the valuation of the output for the period? $19,836 $20,520 $22,040 $22,523 Correct answer. 2/2p https://exam.net/pdf-builder/students/44744859?expires=1687761509&locale=en&settingsId=309079&signature=15c6d3e5b5cfe1eea0453083b2bc4… 8/17 6/19/23, 1:41 PM Exam.net - Easy-to-use and secure digital exams A scatter diagram shows the weekly total costs of production ($) in a certain factory plotted against the weekly output (units). A broadly linear pattern is evident, with r = 0.9. The regression equation is: COSTS = 1,500 + (15  OUTPUT) 50 data points have been included in the analysis, with output ranging from 100 units to 1,000 units. Output next week is planned to be 500 units. Are the following estimates that have been produced from this analysis true or false? y) Variable costs are approximately $15 per unit on average. True False Correct answer. 1/1p z) Next week's production costs are likely to be about $9,000. True False Correct answer. 1/1p aa) Triangle Co use the balanced scorecard. One of the measures included is: ‘The percentage of company sales derived from products launched within the previous 12 months’. Which balanced scorecard perspective would this measure be classified under? Financial Customer Internal (or Process efficiency) Growth (or Learning) Correct answer. 2/2p ab) The scatter diagram below shows the relationship between two variables X and Y. What is the value of the correlation coefficient? -1 +1 0 10 https://exam.net/pdf-builder/students/44744859?expires=1687761509&locale=en&settingsId=309079&signature=15c6d3e5b5cfe1eea0453083b2bc4… 9/17 6/19/23, 1:41 PM Exam.net - Easy-to-use and secure digital exams Correct answer. 2/2p ac) Which of the following is NOT a relevant cash flow in a discounted cash flow calculation? Annual interest payments on the loan taken out to finance the project Scrap value of equipment to be used on the project Directly attributable fixed costs Initial asset expenditure Correct answer. 2/2p ad) A company had the following budgeted and actual production overhead costs in its two production cost centres, machining and assembly: Which of the following statements is TRUE? From the data available it is not possible to determine overhead over-/under-absorption Machining overheads were over-absorbed and Assembly overheads were under-absorbed Machining overheads were over-absorbed and Assembly overheads were over-absorbed Machining overheads were under-absorbed and Assembly overheads were over-absorbed Correct answer. 2/2p ae) Which of the following is NOT a valid advantage of spreadsheets? Spreadsheets make the calculation and manipulation of data easier and quicker Spreadsheets facilitate efficient analysis of financial data Spreadsheet models very rarely contain any errors Spreadsheets enable what-if analysis to be performed relatively quickly Correct answer. 2/2p af) Which of the following costs would NOT be classified as a production overhead cost in a company that produces bottled mineral water? Depreciation of the bottling plant The factory rent The factory manager’s salary The cost of the bottles Correct answer. 2/2p https://exam.net/pdf-builder/students/44744859?expires=1687761509&locale=en&settingsId=309079&signature=15c6d3e5b5cfe1eea0453083b2bc… 10/17 6/19/23, 1:41 PM Exam.net - Easy-to-use and secure digital exams ag) Which TWO of the following statements about a fixed budget are correct? A fixed budget is a budget which is most generally used for planning purposes A fixed budget is a budget for a single level of activity A fixed budget is a budget for fixed costs A fixed budget is a budget which uses the principles of marginal costing Correct answer. 2/2p ah) Which of the following relates to asset expenditure? Cost of acquiring or enhancing non-current assets Expenditure on the manufacture of goods or the provision of services Recorded as an asset in the statement of profit or loss Recorded as a liability in the statement of financial position Correct answer. 2/2p ai) Which TWO of the following are cost objects? Interest paid on a loan A call taken at a call centre One of a bank's business customers Rent expense of a factory Correct answer. 2/2p Are the following statements about value analysis true or false? aj) Value analysis involves the systematic investigation of factors affecting the cost of a product or service. True False Correct answer. 1/1p ak) Value analysis considers three aspects of value. True False Correct answer. 1/1p 2. Section B: Open-Ended Question ALL THREE questions are compulsory and MUST be attempted https://exam.net/pdf-builder/students/44744859?expires=1687761509&locale=en&settingsId=309079&signature=15c6d3e5b5cfe1eea0453083b2bc… 11/17 6/19/23, 1:41 PM Exam.net - Easy-to-use and secure digital exams Exercise 36: Sparrow Co makes and sells construction materials and has some cash sales and some credit sales. Actual credit sales for the past four months were as follows: $ February 50,000 March 60,000 April 20,000 May 40,000 20% of credit sales are expected to pay in the month of sale, 60% in the month after sale, 10% in the second month after sale and 10% are expected to be bad debts. Sparrow Co has budgeted that total sales in August will be $320,000, then $510,000 in September, $130,000 in October and $250,000 in November. 50% of sales are expected to be credit sales. Customers who pay in cash are given a 10% discount. TASK 1 a) Calculate the amount of cash Sparrow Co should collect from credit sales in the month of May. (DO NOT input any symbols, only numbers are accepted) Answer: 26000 Correct answer: 2.5/2.5p b) Calculate the level of sales receipts that should be shown in the cash budget for October. (DO NOT input any symbols, only numbers are accepted) Answer: 240500 Correct answer: 2.5/2.5p TASK 2 c) Sparrow Co decides to sell a non-current asset. It was originally bought in September 20X3 for $60,000 and has been depreciated by $10,000 per year. Sparrow Co hopes to sell it in August 20X5 for $25,000. Calculate the net cash inflow or outflow relating to this sale that will appear in the cash budget for August 20X5. (DO NOT input any symbols, only numbers are accepted) Answer: 25000 https://exam.net/pdf-builder/students/44744859?expires=1687761509&locale=en&settingsId=309079&signature=15c6d3e5b5cfe1eea0453083b2bc… 12/17 6/19/23, 1:41 PM Exam.net - Easy-to-use and secure digital exams Correct answer: 2/2p TASK 3 Sparrow C is investing in new factory premises. Identify whether each of the following are asset or expense items. Write "asset" if the investment is identified as an asset, otherwise, write "expense". (Note: Wrong input or wrong grammar will not be marked) d) Investment of $30,000 in new factory premises Answer: asset Correct answer. 0.5/0.5p e) A $10,000 extension to enhance the production capacity of a factory Answer: asset Correct answer. 0.5/0.5p f) Cleaning of a factory $900 Answer: expense Correct answer. 0.5/0.5p g) Office furniture for the managing director Answer: asset Correct answer. 0.5/0.5p h) Payment of factory staff wages Answer: expense Correct answer. 0.5/0.5p i) Breakdown repairs on faulty machine Answer: expense Correct answer. 0.5/0.5p https://exam.net/pdf-builder/students/44744859?expires=1687761509&locale=en&settingsId=309079&signature=15c6d3e5b5cfe1eea0453083b2bc… 13/17 6/19/23, 1:41 PM Exam.net - Easy-to-use and secure digital exams Excise 37: Seashell Co planned to make 90,000 units of Choc in June. The standard cost of a Choc unit is as follows: During the month of June, 99,000 units were produced, 216,000 labour hours were worked, $3,024,000 was spent on direct labour and $1,620,000 was spent on variable overheads. The following variances occurred in July: Direct material price variance $210,000 Favourable Direct material usage variance $230,000 Adverse TASK 1 j) Calculate the direct labour rate variance for June and select whether the variance is "adverse" or "favourable" then type it correctly into the answer box. Labour rate variance? (DO NOT input any symbols, only numbers are accepted) Answer: 432000 Correct answer: 1/1p k) "adverse" or "favourable"? Answer: adverse Correct answer. 1/1p l) Calculate the variable overhead efficiency variance for June and select whether the variance is "adverse" or "favourable" then type it correctly into the answer box. Variable overhead efficiency variance? (DO NOT input any symbols, only numbers are accepted) Answer: 180000 Correct answer: 1/1p https://exam.net/pdf-builder/students/44744859?expires=1687761509&locale=en&settingsId=309079&signature=15c6d3e5b5cfe1eea0453083b2bc… 14/17 6/19/23, 1:41 PM Exam.net - Easy-to-use and secure digital exams m) "adverse" or "favourable"? Answer: adverse Correct answer. 1/1p TASK 2 n) The sales volume profit variance reported for June was $24,000 (A). Seashell Co is considering using standard marginal costing as the basis for variance reporting in the future. Calculate the sales volume variance to be shown in a marginal costing operating statement for June. (DO NOT input any symbols, only numbers are accepted) Answer: 33600 Correct answer: 2/2p TASK 3 o) In July, Seashell Co's management accountant thinks that the direct material price and direct material usage variances could be interrelated. i) Which of the following could explain their interrelationship? Actual production was less than budgeted Cheaper materials led to more material wastage Unforeseen discounts were received There was a price increase in materials Correct answer. 2/2p p) ii) Which TWO of the following factors are the MOST important for Seashell to consider before it investigates its variances? Materiality Controllability Personnel involved Whether they are adverse or favourable Correct answer. 2/2p https://exam.net/pdf-builder/students/44744859?expires=1687761509&locale=en&settingsId=309079&signature=15c6d3e5b5cfe1eea0453083b2bc… 15/17 6/19/23, 1:41 PM Exam.net - Easy-to-use and secure digital exams Exercise 38: Ins Co is an insurance company with a call centre. The budget for the call centre expects workers to work a total of 6,000 hours in a period and for each worker to answer ten customer enquiries per hour. 5,700 hours were actually worked and 62,700 customer enquiries were answered. 18,810 enquires were customer complaints and 1,254 were customers asking to change their policy. TASK 1 q) Calculate the efficiency ratio for the period. (DO NOT input any symbols, only numbers are accepted) Answer: 110 Correct answer: 2/2p r) Calculate the capacity ratio for the period. (DO NOT input any symbols, only numbers are accepted) Answer: 95 Correct answer: 2/2p s) Calculate the percentage of enquiries that were customer complaints during the period. (DO NOT input any symbols, only numbers are accepted) Answer: 30 Correct answer: 1/1p t) Calculate the percentage of enquiries that were customers asking to change their policy during the period. (DO NOT input any symbols, only numbers are accepted) Answer: 2 Correct answer: 1/1p TASK 2 https://exam.net/pdf-builder/students/44744859?expires=1687761509&locale=en&settingsId=309079&signature=15c6d3e5b5cfe1eea0453083b2bc… 16/17 6/19/23, 1:41 PM Exam.net - Easy-to-use and secure digital exams u) Use the list of words to fill in the missing words gap in the sentences below: Key performance indicators Critical success factors Mission statements Strategic objectives Critical success factors are performance requirements that are fundamental to competitive success. Mission statements are the business's rationale for existing Key performance indicators are measures used to assess performance Strategic objectives are quantified embodiments of mission All correct. 2/2p TASK 3 v) Ins Co is keen to improve customer retention and wants to focus on the quality of service it provides to customers. Which TWO of the following would be appropriate as a measure of service quality? Number of customer complaints Sales volume Number of repeat customers Revenue per customer Correct answer. 2/2p YOU HAVE REACHED THE END OF THE EXAM. THANK YOU! https://exam.net/pdf-builder/students/44744859?expires=1687761509&locale=en&settingsId=309079&signature=15c6d3e5b5cfe1eea0453083b2bc… 17/17