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Question 1
1.$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end of year 3, $5,000 is withdrawn.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
 Question 2
• 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
 Question 3
• Which of the following is MOST
likely to be classified as a step cost?
Raw materials
Fuel
Photocopier paper
Supervisor salary
 Question 4
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
 Question 5
• 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
 Question 6
• 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?

• Ans ………………….. reams

 Question 7
• 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)
 Question 8
• 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 capital expenditure
 Question 9
• 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
 Question 10
14.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?
• $ ……………………..
 QUESTION 11
• An investment of $78,000 is made immediately.
The investment will produce an annual net income
of $5,000 in perpetuity starting in one year's time.
The discount rate on the investment is 5%.
• What is the net present value of the
investment?

• ANS ……………….
 QUESTION 12
• What is the probability that an observation
for a normally distributed variable will be
greater than 1.24 standard deviations
above the mean (to two decimal places)?
• A. 0.89
• B. 0.39
• C. 0.11
• D. 0.61
 QUESTION 13
• Which TWO of the following are examples
of inventory holding costs?
A. Interest on capital
B. Losses from obsolescence
C. Carriage inwards
D. Cost of telephone calls to place order
 QUESTION 14
• Fixed overheads were absorbed last month using a rate of
$5.00 per labour hour. Budgeted labour hours were 22,000
and actual labour hours were 24,000. The fixed overhead
expenditure variance was $6,000 adverse.
• What was the actual cost of fixed overheads for
the month?
• A. $116,000
• B. $104,000
• C. $126,000
• D. $114,000
 QUESTION 15
• One unit of a product requires three kg of material,
and the expected cost of materials is $4 per kg.
Labour will be paid at $12 per hour and each
employee will make four units per hour. Budgeted
fixed overheads are $800,000 per period and are to
be absorbed using budgeted labour hours, which
are 40,000.
• What is the standard total absorption cost
per unit?
• ANS $……………….
 QUESTION 16
• The standard fixed production overhead absorption rate in a
factory is $20 per machine hour. 1,760 machine hours were
worked in a period during which the fixed production
overhead variances included:
• Capacity $3,600 Favourable
• Volume $2,400 Adverse
• What were the budgeted machine hours?
• A. 1,580 hours
• B. 1,640 hours
• C. 1,880 hours
• D. 1,940 hours
 Question 17
• Division A reported sales of $400,000 and a
contribution of $160,000 for the most recent
period. Fixed costs for the period were $80,000, of
which 20% were controllable by the division's
manager.
• What is the amount of profit which is
controllable by the division's manager for
the most recent period?

• Ans $ ………………
 Question 18
• A machine has a net book value of $60,000. It is to be used
to manufacture a new product. It has no alternative use.
Depreciation of the machine will continue at $15,000 per
annum. Incremental net cash inflows of $40,000 are
expected from the new product in the first year. The cost
of capital is 10% per annum. All cash flows are assumed to
occur at the end of the year.
• What is the discounted cash flow in the first year
for the new product (to the nearest $100)?

• Ans $ ……………….
 Question 19
• A firm sets its fixed budget at 100% capacity. The
budgeted sales are $300,000 and budgeted net profit is
$50,000. Budgeted costs are 70% fixed costs and 30%
variable costs.
• What is the flexed budget for net profit at 80%
capacity?
• A. $5,000
• B. $40,000
• C. $25,000
• D. $65,000
 Question 20
• Which costing technique allocates costs
to products such as design, production,
distribution, maintenance, marketing, and
disposal, in order to maximise return and
minimise costs?
• A. Traditional absorption costing
• B. Activity-based costing
C. Target costing
D. Life cycle costing
 Question 21
• (1) Primary data is usually less expensive to produce than
secondary data because it is available from within the
organisation
• (2) All data can be classified as either discrete or
continuous
• Are the above statements about data true or
false?
• A. Both Statements true
• B. Both Statements false
• C. Statement (1) True, Statement (2) false
• D. Statement (1) False, Statement (2) True
 Question 22
• Consider the following statements about the
normal distribution:
• (1) The total area under the standard normal
distribution curve is 1
• (2) In any normal distribution, the mean and the
median are the same
• Are each of the statements true or false?
• A. Both Statements true
• B. Both Statements false
• C. Statement (1) True, Statement (2) false
• D. Statement (1) False, Statement (2) True
 Question 23
• In which of the following situations are imposed budgets
effective?
A . In large businesses
B . During periods of economic boom
C . In well established businesses
D . When the organisation's different units require precise
organisation
 Question 24
Good information should have certain qualities.
Which THREE of the following are qualities of good
information?
A. Complete
B. Extensive
C. Relevant
D. Accurate
 Question 25
• A capital investment project has an initial investment
followed by constant annual returns. How is the
payback period calculated?
Initial investment ÷ annual profit
Initial investment ÷ annual net cash inflow
(Initial investment – residual value) ÷ annual profit
(Initial investment–residual value)÷annual net cash
inflow
 Question 26
A government body uses measures based upon the '3 Es'
to the measure value for money generated by a publicly
funded hospital. It considers the most important
performance measure to be 'cost per successfully treated
patient'.
•Which of the 3 E's best describes the above measure?
•A Economy
B Effectiveness
•C Efficiency
D Externality
 ANSWER
Questions Answer
1 C
2 D
3 D
4 C
5 D
6 80 REAMS
7 D
8 A
9 C
10 $30,000
 ANSWER
QUESTIONS ANSWER

11 22000

12 C

13 A&B

14 A

15 20

16 A
 Answer
Questions Answers
17 144000
18 36400
19 A
20 D
21 B
22 A
23 D
24 A,C,D
25 B
26 C