闪电代写 -代写CS作业_CS代写_Finance代写_Economic代写_Statistics代写_代码代做_IT代写_加急帮助

Hello, dear friend, you can consult us at any time if you have any questions, add WeChat: daixieit

AC220 Further Management Accounting

Mock Exam 1

Answer ALL questions from Section A

Choose TWO questions from Section B

Section A (Total 40 marks)

1. A company produces smartphones. The company currently uses machine hours as the basis to allocate the production overhead to each order. The budgeted machine hours for next year is 100,000 hours.

The company receives a new order for 4,000 units of smartphone and the following is the budgeted information for the order:

Direct Material	£80,000
Direct Labour (£100 per hour)	£20,000
Inspections	600
Machine hours	4,000 hours

After attending a workshop, the manager in the company is considering adopting activity-based costing to calculate the cost of the smart phone.

She has established the total fixed overheads are £220,000 and are almost entirely related to quality inspections of which 20,000 are expected in the year.

What will be the difference in the total cost per unit of a smartphone between the current method and activity-based costing?

(A) ABC will give a cost per phone £0.55 less than currently

(B) ABC will give a cost per phone £0.55 more than currently

(D) ABC will give a cost per phone £1.65 more than currently

2. Which of the following perspectives in balanced scorecard often consist of lag measures?

(A) Financial Performance

(B) Customer

(D) Learning and Growth

3. Company S is manufacturing laptops with the following information:

Budgeted selling price	£40
Actual selling price	£38
Budgeted cost	£22
Actual cost	£18
Budgeted output	80,000 units
Actual output	80,000 units

Which of the following is true?

(A) Sales volume variance is £160,000 adverse

(B) Total sales variance is 0

(D) Sales price variance is £160,000 favourable

4. GMB Ltd bought 5,000 kg of Material A three months ago at a price of £200,000. The company receives a special order which will require 4,500 kg of Material A. If the company rejects the order, it could sell Material A to the market at a price of £55 per kg as it has no other use.

What is the relevant cost of the material used in the special order?

(A) £180,000

(B) £200,000

(D) £275,000

5. A company is considering purchasing a new machine with a cost of £110,000. The machine is expected to have a useful life of 10 years with no residual value (the company uses straight line depreciation). The machine is expected to increase the sales revenue by £20,000 and reduce operating expenses by £8,000 per year.

What is the accounting rate of return based on the average investment (ignoring any tax effect)?

(A) 21.96%

(B) 15.45%

(D) 11.11%

6. Company FG is selling remote controls. The budgeted and actual selling sales information is as follows:

Budgeted market demand	11,000 units
Budgeted market share	30%
Standard profit per item	£5
Actual market demand	10,000 units
Actual market share	32%
Actual selling price	£10

Which of the following regarding the planning and operating sales volume variances is true?

(A) The planning variance is £500 adverse and the operating variance is £1,500 adverse

(B) The planning variance is £1,500 adverse and the operating variance is £1,000 favourable

(D) The planning variance is £1,000 favourable and the operating variance is £1,100 favourable

7. Robust PLT has two divisions, A and B, and both of them are treated as profit centres. Division A produces component P, which could be sold to Division B or to the market. The unit cost of component P includes variable cost of £70 and fixed cost of £30 per unit. Division A has a capacity of 20,000 units of component A and it could sell 18,000 units at a price of £130 to the outside market. Currently, Division B purchases 5,000 units of component P at a price of £120 from an outside supplier.

The manager in Division B has asked if Division A could sell component P internally, and has asked for two quotes – one for the first 2,000 and one for the next 3,000 units.

What is the minimum price Division A will want for the two orders?

	First 2,000	Next 3,000
(A)	£70	£120
(B)	£70	£130
(C)	£130	£120
(D)	£130	£130

8. Investment centre Z has sales revenue of £600,000, return on investment 30% and profit margin 6%.

What is the value of the operating assets?

(A) £120,000

(B) £180,000

(D) £300,000

9. Cal Company is proposing to purchase new equipment with a cost of £48,000. The equipment will have a useful life of 3 years with no residual value. The equipment is expected to reduce operating expenses by £20,000 per year. The company uses straight-line depreciation (and no capital allowances are given on this equipment); it pays tax at 25% and its cost of capital is 15%.

What is the net present value of the proposal?

(A) (£41,148)

(B) (£13,740)

(D) (£38,864)

10. In order to achieve goal congruence between the whole company and divisions, what transfer price should be set in theory?

(A) The incremental cost of the production plus a proportion of the fixed costs

(B) The incremental cost of the production minus a proportion of the fixed costs

(D) The incremental cost of the production minus any opportunity cost of supplying the other division

11. Which of the following will move the entire profit line on a profit-volume graph in a parallel shift to the right?

(A) Variable cost increases by £5 per unit

(B) Selling price increases 10%

(D) Selling commission based on revenue reduces from 10% to 8%

12. Zed Company operates in five regions in United Kingdom. As part of the overall marketing strategy of the region, the regional manager can decide whether to open a new branch, what location in which to open, and whether the branch should rent or purchase its equipment. The branch manager, however, can decide the selling and marketing strategy within their branch and has control over the costs incurred within their branch.

Which of the following would describe the responsibility centres in Zed Co.?

(A) Region: Profit centre; Branch: Profit centre

(B) Region: Profit centre; Branch: Cost centre

(D) Region: Investment centre; Branch: Revenue centre

13. Belle Company manufactures and sells three products: Products A, B, and C. The following data has been provided the company.

	A	B	C
Selling Price	£100	£120	£50
Contribution margin ratio	40%	40%	20%

The company sells 5 units of C for every unit of A and 2 units of B for every unit of A. The company incurred £116,250 total fixed costs.

Assuming a constant sales mix, which of the following is true?

(A) The break-even point in units is 1,186 units

(B) At break-even, sales of product A would be 2,000 units

(D) At break-even, sales revenue of product C would be £50,000

14. A company is considering investing in a project with an expected life of four years. The project has a positive net present value of £280 000 when cash flows are discounted at 10% per annum. The project’s estimated cash flows include net cash inflows of £320 000 pa for each of the four years. No tax is payable on projects of this type.

What percentage decrease in the estimated annual net cash inflows would cause the company’s management to reject the project from a financial perspective, to the nearest 0.1%?

(A) 8.8%

(B) 21.9%

(D) 27.6%

15. Trendy makes four products; it is always concerned that it might not make a profit as the material cost and quantity available depend on the size of a crop harvest.

Details of its products are as follows:

Product	Budget	Selling price	Labour per unit	Material per unit
	(units)	(£)	(£)	(kg)
T	200	80	30	2.00
R	500	25	10	1.00
E	300	30	13	1.00
N	700	60	25	3.00

Fixed costs are expected to be £20,000 and material currently costs £3 per kg.

The company is calculating the production plan which would break even with the least amount of sales revenue.

Which of the following production plan should the company adopt?

	T (units)	R (units)	E (units)	N (units)
(A)	200	500	300	700
(B)	200	500	300	39
(C)	200	0	300	270
(D)	200	0	0	431

16. Which of the following is most likely to cause a favourable labour efficiency variance?

(A) The actual labour hour rate is higher than the standard labour hour rate

(B) The actual labour cost is higher than the standard labour cost

(D) The standard labour hours are more the actual labour hours

Section B (Total 60 marks)

1. The Cosmetic Co. is a company producing a variety of cosmetic creams and lotions. The creams and lotions are sold to a variety of retailers at a price of £23.20 for each jar of face cream and £16.80 for each bottle of body lotion. Each of the products has a variety of ingredients, with the key ones being silk powder, silk amino acids and aloe vera. Six months ago, silk worms were attacked by disease causing a huge reduction in the availability of silk powder and silk amino acids. The Cosmetic Co. had to dramatically reduce production and make part of its workforce, which it had trained over a number of years, redundant. The company now wants to increase production again by ensuring that it uses the limited ingredients available to maximize profits by selling the optimum mix of creams and lotions.

Due to the redundancies made earlier in the year, supply of skilled labour is now limited in the short term to 160 hours (9,600 minutes) per week, although unskilled labour is unlimited.

The purchasing manager is confident that they can obtain 5,000 grams of silk powder and 1,600 grams of silk amino acids per week. All other ingredients are unlimited. The following information is available for the two products:

	Cream	Lotion
Materials required: silk powder (at £2.20 per gram)	3 grams	2 grams
Silk amino acids (at £0.80 per gram)	1 gram	0.5 grams
Aloe vera (at £1.40 per gram)	4 grams	2 grams
Labour required: skilled (£12 per hour)	4 minutes	5 minutes
Unskilled (£8 per hour)	3 minutes	1.5 minutes

The maximum demand for lotions is 2,000 bottles per week, although demand for creams is unlimited. Fixed costs total £1,800 per week. The company does not keep inventory although if a product is partially complete at the end of one week, its production will be completed in the following week.

Required:

(a) Calculate the contribution per unit for both products.

(4 marks)

(b) Assuming they want to maximise contribution, state the objective function and constraints.

(6 marks)

(c) On the graph paper provided, use linear programming to calculate the optimal solution. All workings MUST be shown, and be rounded to two decimal places.

(12 marks)

(d) Calculate the shadow price for silk powder. All workings MUST be rounded to two decimal places.

(4 marks)

(e) Briefly explain the concept of a shadow price and explain the meaning of the shadow price calculated in (d) above.

(4 marks)

(30 marks)

2. Stadler is an ambitious young executive who has recently been appointed to the position of financial director of Paradis plc, a small listed company. Stadler regards this appointment as a temporary one, enabling him to gain experience before moving to a larger organization. His intention is to leave Paradis plc in three years’ time, with its share price standing high. As a consequence, he is particularly concerned that the reported profits of Paradis plc should be as high as possible in his third and final year with the company.

Paradis plc has recently raised £350 000 from a rights issue, and the directors are considering three ways of using these funds. Three projects (A, B and C) are being considered, each involving the immediate purchase of equipment costing £350 000. The equipment for each project will have a useful life equal to that of the project, with no scrap value. Only one project only can be undertaken.

Stadler favours project C because it is expected to show the highest accounting profit in the third year. However, he does not wish to reveal his real reasons for favouring project C, and so, in his report to the chairman, he recommends project C because it shows the highest internal rate of return. The following summary is taken from his report: