Management Accounting

Answer
to
Practice Questions

141
Answers

1. A&D
2. B
3. A
4. D
5. C
6. A
7. C
8. B
9. A
10. A
11. C
12. D
13. D
14. D
15. B
16. C
17. A
18. A
19. C
20. C
21. D
22. B
23. B
24. D
25. B
26. V.C $11.525/unit, Fixed Cost $72,460, total cost $170,380
27. A
28. C
29. C
30. A
31. B
32. (a) C 32. (b) D
33. D
34. B
35. B
36. B
37. C
38. C
39. D

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40. C
41. C
42. A
43. B
44. A,B,C and D
45. C
46. D
47. A
48. B
49. Fixed cost
50. A
51. B
52. A
53. C
54. C
55. B
56. C
57. D
58. Reorder Level 21,600 units
Maximum stock level 58,400 units
Average stock level 31,200 units
Buffer stock 11,200 units

59. EOQ (without discount) 3,000 units

Reorder Level 3,000 units
EOQ (with discount) 10,000 units
60. D
61. A
62. (a).A 62.(b).A

63. Reorder level 364 units

Maximum stock level 542 units
Minimum stock level 329 units

64. Reorder level 5,700 units

Maximum stock level 7,060 units
Minimum stock level 4,160 units

65. Reorder level 14,000 units

Maximum stock level 5,100 units
Minimum stock level 26,500 units

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66. C
67. A
68. A
69. Reorder level 12,000 units
Minimum stock level 5,325 units
Maximum stock level 8,800 units
70. C
71. D
72. C
73. B
74. Economic order quantity 6,000
Reorder level 3,600
Total annual ordering cost $900
Total annual holding cost $900
(Assuming there is no buffer stock)

75. B
76. A
77. $12,500
78. 1,000 units
79. 500 units
80. 5,000 units
81. B
82. C
83. D
84. A
85. B
86. D
87. A
88. A
89. A
90. C
91. D
92. A
93. B
94. B
95. C
96. D
97. A
98. B

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99. A
100. A
101. C
102. C
103. B
104. D
105. D
106. A
107. D
108. B
109. B
110. A
111. C
112. A
113. C
114. C
115. D
116. B
117. A
118. A
119. A
120. A
121. B
122. C
123. B
124. D
125. A
126. C
127. A
128. C
129. B
130. $38,400
131. $25,200
132. $23.2/unit
133. $36,000
134. $48,400
135. $39,920
136. $37.23/unit
137. $52,000
138. A
139. A
140. B
141. A
142. D
143. D
144. B

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Answers
145. B
146. B
147. D
148. B
149. D
150. C
151. B
152. C
153. A
154. B
155. A
156. D
157. D
158. C
159. C
160. D
161. B
162. C
163. A
164. A
165. B
166. E
167. C
168. B
169. B
170. D
171. B
172. D
173. C
174. A
175. A
176. A
177. B
178. C
179. D
180. B,C & E
181. A,B & D
182. B
183. Marginal costing $21,400
Absorption costing $29,000

184. Absorption Marginal

Alpha $50,400 $37,800

Beta $107,300 $85,100

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185. A
186. B
187. C
188. 12,000 units
189. $77,000
190. $21,120

191. Base units 2,000 units

Added material 1,815 units
Conversion costs 1,860 units

192. A
193. $69,450
194. B
195. C
196. B
197. D
198. A
199. B
200. C
201. D
202. C
203. C
204. C
205. D
206. C
207. B
208. B
209. $178,475

210. Abnormal gain (Process 1) $6,300

Cost of good output (process 2) $285,600

211. Equivalent units 20,000

Cost per equivalent unit $0.5

212. Material A 100,000 units

Material B 94,000 units
Material C 82,000 units

213. Conversion costs 88,250 units

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214. Material 160,000 units

Conversion cost 170,000 units

215. $175,000
216. C
217. C
218. D

219. Gross profit (Product A) $8,400

220. Cost per unit of (Product B) $9.45

221. D

222. C

223. A

224. $291,200

225. $250,000

226. $271.20/unit

227. $31,250

228. $50,000

229. $33,150

230. $24,000

231. $18,000

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232. 7,500 kg

233. $68,750

234. D

235. C

236. C

237. C

238. D

239. B

240. B

241. D

242. C

243. D

244. Profit earned from job X3 $2550

Value of WIP $19,285

245. $25,000 Adverse

246. $5,000 Favourable

247. $4,000 Favourable

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248. MPV $18,000 favourable
MUV $24,000 Adverse

249. B

250. D

251. B

252. D

253. C

254. $8.25/unit

255. $5.25/unit

256. 2.5 hours

257. 20,000 hours

258. $6/kg

259. @$2.4/hour

260. A

261. Budgeted sales revenue $210,000

Budgeted sale units 14,000

262. 62.5%

263. $4/unit

264. MOS (units) 4,000

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MOS ($) $60,000

MOS % 40%

265. $40,000

266. $90,000

267. Selling price $50/unit

Variable cost $30/unit

268. $6/unit

269. $25/unit

270. $15/unit

271. C

272. $1000,000

273. C

274. B

275. D

276. $220,800

277. 187,000 units

278. $6,000

279. $2,000

280. $6,000

281. $10,000

282. $12,200

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283. $32,200

284. $5,000

285. $18,000

286. $22,000

287. $10,000

288. $12,000

289. B

290. A

291. D

292. C

293. B

294. A

295. D

296. C

297. C

298. D

299. A

300. D

301. C

302. A

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303. B

304. 17,000 units

305. C

306. 7,500 units

307. 27,000 units

308. D

309. C

310. B

311. A

312. B

313. C

314. A

315. C

316. A

317. B

318. C

319. Wheat 4 units

Rye 4 units

320. Source A 2 tones

Source B 4 tones

321. $108 (approx)

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322. Product A 150 units
Product B 60 units

323. Cups 120

Plate 160

324. Corn 240 acres

Soya Bean 130 acres

325. Aluminum 85 pound

Copper 37.5 pound

326. Regression line Y= 4.63 + 5.15X

Weight 35.55 kg

327. r= -0.91
No. of customers = 39

328. Regression line Y= 1.715 + 0.695X

Chemistry score 6.93

329. Regression line Y=-107.14 +1.022X

r 0.944
Weight 105.38 kg

330. Regression line Y=31.74 + 3.473X

r 0.954

331. r -0.971
Regression line Y =8.2 -0.7X
Watching hours 2.6 hours

332. r 0.965
regression line Y=-6.78 +1.77X
Sales(hundred dollars) 76.42

333. Maths score 50.81

334. $0.42 gain

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335. $0.83 loss

336. $83 loss

337. $81,000

338. $50 loss

339. $3,250 gain

340. $8,000 loss

341. 12.74 Cents loss

342. 3,000 gain

343. B

344. B

345. D

346. C

347. B

348. A

349. A

350. B

351. D

352. A

353. C

354. A

355. B

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Answers

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