Questions and Answers of ISE Business Accounting

You are required to calculate the overhead variances from the following data.(a) Budgeted for \(£ 6,000\) variable overhead and 1,000 machine hours.\(\begin{array}{lr}\text { Actual overhead } & £
A You are required to calculate the overhead variances in the following cases:(a) Budgeted for \(£ 37,000\) fixed overhead. The actual fixed overhead turns out to be \(£ 36,420\).(b) Budgeted for
You are required to calculate the overhead variances of Joseph Ltd. The budget is prepared as:(a) Total budgeted variable overhead \(£ 400,000\).(b) Total budgeted fixed overhead \(£ 160,000\).(c)
A You are required to calculate the overhead variances of Raymond Ltd. The budget is prepared as:(a) Total budgeted variable overhead \(£ 100,000\).(b) Total budgeted fixed overhead \(£
The Grange Company had the following results for the year to 31 March 19X1. A single product - a toggle - was made by the company.The standard cost of manufacturing each unit was \(£ 1.50\).What are
A Corporec PLC manufactures a detergent in one of its plants. The information for the year to 30 September \(19 \mathrm{X} 2\) was as follows:The standard cost of manufacturing a litre was \(£
The following data was collected for Molton Ltd for the year ended 31 March 19X3.Calculate price, volume and mix variances for \(19 \times 3\). Product Budget Budget Selling sales price units %
A The following information relates to Burton Company for the year to 30 June 19X6:Calculate price, volume and mix variances for \(19 \times 6\). Product Budget Sales Budget Budget Actual Sales
Singleton has been operating for some years as a manufacturer of a single product, and after several years' growth has decided to form a company Singleton Ltd.His accountant advised him that in an
A (Note: this question covers material from both Chapters 43 and 44.) HGW Limited produces a product called a Lexton. The standard selling price and the manufacturing costs of this product are as
Cover up the schedule you constructed as your answer to \(45.1(i)\) and look instead at the break-even chart constructed as the answer to 45.1(ii). Answer the following:(a) What are the total costs
A Look at your schedule in answer to 45.1(i) and answer the following:(a) What are the total costs at production levels of (i) 4,000 units; (ii) 7,000 units; (iii) 9,000 units; (iv) 5,500 units? You
From your break-even chart for 45.1(ii) calculate the profit or loss that will be made at levels of (i) 3,000 units; (ii) 10,000 units; (iii) 4,000 units; (iv) 7,000 units; (v) 8,500 units.
A From the schedule in 45.1(i) calculate the profit or loss that would be made at levels of (i) 3,000 units; (ii) 10,000 units; (iii) 4,000 units; (iv) 7,000 units; (v) 8,500 units (this last figure
Polemic Ltd manufacture and sell a single product. The following information is available for three financial years ending 30 September.\section*{Additional information}1 When the management of
A The relationship between income/cost/volume suggests that there are four ways by which profit can be increased. These are:1 Increase unit selling price.2 Decrease unit variable cost.3 Decrease
A You are employed by Monarch Ltd which manufactures specialist hydraulic seals for the aircraft industry. The company has developed a new seal with the following budgeted data.Certain departmental
Magwitch Limited's finance director produced the following forecast break-even chart for the year ending 31 May 19X1:During the year the company produced and sold 20,000 units, and both revenue and
(a) How does a system of standard costing enable a business to operate on the principle of management by exception?(b) Some of the following materials and labour variances have been wrongly
A Calculate the materials variances from the following data. (i) Material E: (ii) Material F: (iii) Material G: (iv) Material H: (v) Material I: (vi) Material J: Standard price per metre Standard
A Calculate the labour variances from the following data: Standard Actual Standard Actual hours hours wage rate wage rate (i) Job I 150 142 2.0 2.2 (ii) Job J 220 234 1.9 1.7 (iii) Job K 50 48 2.0
A Central Grid plc manufactures tungsten parts which pass through two processes, machining and polishing, before being transferred to finished goods. The management of the company have in operation a
Borrico Ltd manufacture a single product and they had recently introduced a system of budgeting and variance analysis. The following information is available for the month of July 19X1:2 Standard
A Makers Ltd assembles computer games machines. Standard costs have been prepared as follows:The standard direct labour rate is \(£ 5\) per hour.During May 19X5, 5,000 Gamesmasters were sold at \(£
Rimham plc prepares its budgets annually and as the accountant you are responsible for this task. The following standard data is available:- In order to meet the needs of an expansion programme the
Richard Toms has agreed to purchase the business of Norman Soul with effect from 1 August \(19 \times 7\). Soul's budgeted working capital at 1 August \(19 \mathrm{X} 7\) is as follows:In addition to
A A company's estimated pattern of costs and revenues for the first four months of \(19 \times 7\) is as follows:1 One-quarter of the materials are paid for in the month of production and the
D Smith is to open a retail shop on 1 January \(19 \mathrm{X} 4\). He will put in \(£ 25,000\) cash as capital. His plans are as follows:(i) On 1 January \(19 \mathrm{X} 4\) to buy and pay for
Cooper is going to set up a new business on 1 January 19X8. He estimates that his first six months in business will be as follows:(i) He will put \(£ 10,000\) into a bank account for the firm on 1
(a) What is meant by the terms:(i) Budget(ii) Operating budget(iii) Master budget?(b) The information below relates to the business of Madingley Ltd:Notes:(i) Generally, materials are paid for two
The following information has been extracted from the books of Issa Ltd for the financial year ended 31 December \(19 \times 0\).The company had commenced the preparation of its budget for the year
The balance sheet of Gregg Ltd at 30 June 19 X6 was expected to be as follows:All sales will be on credit, and debtors will pay their accounts two months after they have bought the goods.(iii)
The following information relates to the actual sales of Griffton Ltd during the last four months of its financial year.The budgeted information below relates to the next financial year commencing 1
Bedford Ltd is a manufacturing business with several production departments. Benjamin Kent, the manager of the machining department, submitted the following figures for the firm's annual budget for
A The summarised balance sheet of Newland Traders at 30 May \(19 \mathrm{X} 7\) was as follows:Selling and materials prices at 30 May \(19 \times 7\) provide for a gross profit at the rate of 25 per
A Len Auck and Brian Land trade as partners in Auckland Manufacturing Company making components for minicomputers. To cope with increasing demand the partners intend to extend their manufacturing
Ukridge comes to see you in April 19X3. He is full of enthusiasm for a new product that he is about to launch on to the market. Unfortunately his financial recklessness in the past has led him into
Herbert Limited make a single product, whose unit budget details are as follows:2 Credit sales will account for 60 per cent of total sales. Debtors are expected to pay in the month following sale for
A Mtoto Ltd operate as wholesale 'cash and carry' stores and in addition to its main store have two other depots. The company's summarised balance sheet as at 31 August \(19 \mathrm{X} 1\) was as
David Llewelyn has been advised by his bank manager that he ought to provide a forecast of his cash position at the end of each month. This is to ensure that his cash inputs will be sufficient to
The managing director of Pumpkin Ltd was reviewing the results of the company for the financial year ended 31 March 19X0. The following summarised information was available:Note: There were no other
A Belinda Raglan owns a clothing factory. Trading over the last two years has been very successful and she feels that having achieved good results it is now time to request an increase in the
In a firm there are four types of jobs performed in separate production departments A, B, C and D. In addition there are three service departments, K, L and M. Costs have been allocated to the
In the firm mentioned in Question 38.1 what would be the costs of the following jobs given that the direct labour costs per hour are: Job 351: Dept A Job 352: Dept B Job 353: Dept C Job 354: Dept D
A In a firm there are five types of jobs performed in separate production departments \(P, Q, R\), \(\mathrm{S}\) and \(\mathrm{T}\). In addition there are two service departments \(\mathrm{F}\) and
A In the firm mentioned in Question 38.3 X what would be the costs of the following jobs, given that the direct labour rate per hour is Dept \(\mathrm{P} £ 1.9 ; \mathrm{Q} £ 2.5 ; \mathrm{R} £
(a) Explain the difference between the terms overhead allotment, overhead apportionment, and overhead absorption.(b) Why are estimated figures used in calculating overhead absorption rates?(c) The
A Kalmo Ltd offers a subcontracting service in assembly, painting and packing. Components are supplied by customers to the company, the required operations are then carried out, and the completed
(a) What is meant by the term, 'specific order costing'?(b) In what ways does specific order costing differ from process costing?(c) The Acme Shelving Co. Ltd manufactures shelving brackets in
A Horden Products Ltd manufactures goods which could involve any or all of three production departments. These departments are simply entitled A, B and C. A direct wages cost percentage absorption
For the year ended 31 December 19X9 the sales of units are expected to be:The opening stock at 1 January \(19 \mathrm{X} 9\) will be 140 units. The closing stock desired at 31 December \(19
(a) For each of the following, state three reasons why a firm may wish to keep:(i) a minimum stock level of finished goods, and(ii) an even level of production in the face of fluctuating demand.(b)
Drake Ltd's cost and revenues for the current year are expected to be:It was expected that 2,000 units would be manufactured and sold, the selling price being \(£ 11\) each.Suddenly during the year
A Hawkins Ltd expects its cost per unit, assuming a production level of 100,000 per annum, to be:Selling price is \(£ 7.5\) per unit.The following propositions are put to the managing director. Each
Assume that by coincidence two firms have exactly the same costs and revenue, but that Magellan L.td uses a marginal costing approach to the valuation of stock-in-trade in its final accounts,
A Your firm has been trading for three years. It has used a marginal costing approach to the valuation of stock-in-trade in its final accounts. Your directors are interested to know what the recorded
Greatsound Ltd manufactures and sells compact disc players, the cost of which is made up as follows:The current selling price is \(£ 187\).Greatsound Ltd works a day shift only, at present producing
(a) What is meant by the terms contribution and marginal cost?(b) Barton \& Co Ltd make and sell 2,000 units per month of a product 'Barco'. The selling price is \(£ 65\) per unit, and unit costs
Arncliffe Limited manufactures two types of product marketed under the brand names of 'Crowns' and 'Kings'. All the company's production is sold to a large firm of wholesalers.Arncliffe is in
A Reed Ltd manufactures three products A, B and C. Budgeted costs and selling prices for the three months ending 30 September \(19 \mathrm{X} 2\) are as follows:Labour costs are \(£ 3\) per hour,
Paul Wagtail started a small manufacturing business on 1 May 19 X8. He has kept his records on the double entry system, and has drawn up a trial balance at 30 April 19 X9 before attempting to prepare
The figures given below are all that could be salvaged from the records after a recent fire in the offices of Firelighters Limited. The company manufactures a single product, has no raw materials
A Gainford Ltd is a manufacturing company which produces three specialist products - A, B and C. For costing purposes the company's financial year is divided into thirteen periods of four weeks.
A Vale Manufacturing started in business on 1 April 19X3 and incurred the following costs during its first three years.Sales during the first three years were all at \(£ 20\) per
Glasses Ltd make four different products, \(Q, R, S\) and \(T\). They have ascertained the cost of direct materials and direct labour and the variable overhead for each unit of product. An attempt is
A Bottles Ltd makes six different products, F, G, H, I, J and K. An analysis of costs ascertains the following:Fixed costs of \(£ 11,400\) are allocated per unit as \(\mathrm{F} £ 4 ; \mathrm{G} £
Analyse the following costs between:(i) Direct materials(ii) Direct labour(iii) Factory indirect expenses(iv) Administration expenses(v) Selling and distribution expenses(vi) Finance expenses(a)
A Analyse the following costs between(i) Direct materials(ii) Direct labour(iii) Factory indirect expenses(iv) Administration expenses(v) Selling and distribution expenses(vi) Finance expenses(a)
A From the following information work out:(a) Prime cost(b) Production cost(c) Total cost Wages and salaries of employees: In factory (60 per cent is directly concerned with units being manufactured)
You are to study the following financial statements for two similar types of retail store and then answer the questions which follow.Required:(a) Calculate the following ratios:(i) gross profit as
Study the following financial statements of two companies and then answer the questions which follow. Both companies are stores selling textile goods.Required:(a) Calculate the following ratios for
Durham Limited had an authorised capital of £200,000 divided into 100,000 ordinary shares of £1 each and 200,000 8% preference shares of 50p each. The following balances remained in the accounts of
The summarised accounts of Hope (Eternal Springs) Ltd for the years 19X8 and 19X9 are given below.Required:(a) Calculate the following ratios for 19X8 and 19X9:(i) Gross profit: Sales (ii) Stock
The following figures are for AB Engineering Supplies Ltd at 31 December 19X9:(a) Calculate:(i) gross profit as a percentage of the sales;(ii) rate of stock turnover;(iii) net profit as a percentage
Galloway Ltd has an authorised capital of 250,000 ordinary shares of £1 each.(a) At the end of its financial year, 30 April 19X8, the following balances remained in the company’s books after
The trading stock of Joan Street, retailer, has been reduced during the year ended 31 March 19X8 by £6,000 from its commencing figure of £21,000.A number of financial ratios and related statistics
Harold Smart, who is a small manufacturer trading as Space Age Projects, is very pleased with his recently completed financial results which show that a planned 20% increase in turnover has been
(a) In accounting practice a distinction is drawn between the terms ‘reserves’ and ‘provisions’ and between ‘accrued expenses’ and ‘creditors’.Required:Briefly define each of the four
State whether you consider the following statements to be true or false:(a) During inflationary periods, historic cost accounts do not reflect a true and fair view.(b) The preparation of historic
A State whether you consider the following statements to be true or false:(a) The current cost of plant and machinery is likely to be its net realisable value.(b) A company should distribute
A What are the practical difficulties a company may encounter in ascertaining the current values of its assets?
Plant and machinery was purchased on 1 January 19 X3 for \(£ 30,000\), when the relevant specific price index was 90 . What is the current cost value of the asset at 31 December \(19 \mathrm{X} 4\)
A The plant and machinery, details of which are given in question 33.4, is depreciated on a straight line basis at 10 per cent per annum. The depreciation charge is based on year-end values. What is
Calculate backlog depreciation at 31 December \(19 \mathrm{X} 5\) for the plant and machinery whose details are given in question \(33.5 \mathrm{~A}\).
A A firm purchased machinery on 1 January \(19 \mathrm{X} 4\) for \(£ 40,000\), at which date the relevant price index for machinery was 100 . Depreciation is charged on a straight line basis at 25
The historic cost of sales figure for Apple Ltd for the year ended 31 December \(19 \mathrm{X} 3\) is calculated as follows: Opening stock Purchases Closing stock 50,000 450,000 500,000 70,000 Cost
A The balance sheet of Seafield L.td at 31 December \(19 \times 4\) shows the following balances:Using the above information, calculate the monetary working capital adjustment at 31 December 19X4 for
If the relevant price indices for trade debtors and trade creditors are as follows, calculate the monetary working capital adjustment for Seafield Ltd, using the details given in question 33.9 A. 31
A The information given below has been extracted from the accounting records of Cedarwood Ltd for the year ended 30 June 19X4. Prepare a statement showing the current cost operating profit to 30 June
The balance sheet for Cremore Ltd at 31 December \(19 \times 3\) is given below ( \(£ 000 \mathrm{~s})\) : 19X3 19X2 Plant and machinery Cost Depreciation 800 800 320 160 480 640 Current assets
A The following information has been extracted from the accounting records of Sycamore Ltd for the year ended 30 June 19 X3. Sales 9,000,000 Historic cost trading profit 4,000,000 Interest payable
During a period of inflation, many accountants believe that financial reports prepared under the historical cost convention are subject to the following major limitations:1 stocks are undervalued;2
A You are presented with the following information relating to Messiter plc:\section*{Required:}(a) Using the historic cost accounts and stating the formulae you use, calculate the following
A Review a set of company accounts for social disclosures. Consider the usefulness of such disclosures to different user groups.
The partners have always shared their profits in the ratios of X4: Y3: Z1. They are to alter their profit ratios to X3: YS: Z2. The last balance sheet before the change was:The partners agree to
The partners are to change their profit ratios as shown:They decide to bring in a goodwill amount of £18,000 on the change. The last balance sheet before any element of goodwill has been introduced
S, W and M are partners. They share profits and losses in the ratios of %, % and %respectively. .For the year ended 31 December 19X9 their capital accounts remained fixed at the following
Draw up a profit and loss appropriation account for Winn, Pool and Howe for the year ended 31 December 19X7, and balance sheet extracts at that date, from the following:(i) Net profits £30,350.(ii)
Moore and Stephens, who share profits and losses equally, decide to dissolve their partnership as at 31 March 19X9. Their balance sheet on that date was as follows:The debtors realised £2,700, the
X, Y and Z have been in partnership for several years, sharing profits and losses in the ratio 3:2:1. Their last balance sheet which was prepared on 31 October 19X9 is as follows:Despite making good

Showing 1 - 100 of 430