Exam question 1 E pic operates a marginal costing system. For the forthcoming year, variable costs are budgeted to be 60 per cent of sales value and fixed costs are budgeted to be 10 per cent of sales value. If E pic increases its selling prices by 10 per cent, but if fixed costs, variable costs per unit and sales volume remain unchanged, identify the effect on E pic's contribution: A decrease of 2 per cent. ) An increase of 5 per cent, An increase of 10 per cent. O An increase of 25 per cent.Exam question 2 When comparing the profits reported under marginal and absorption costing during a period when the level of stocks increased, identify which of the following statements would be true: O Absorption costing profits will be higher and closing stock valuations lower than those under marginal costing. () Absorption costing profits will be higher and closing stock valuations higher than those under marginal costing. O Marginal costing profits will be higher and closing stock valuations lower than those under absorption costing. O Marginal costing profits will be lower and closing stock valuations higher than those under absorption costing.Exam question 3 Exe Limited makes a single product whose total cost per unit is budgeted to be $45. This includes fixed cost of $8 per unit based on a volume of 10,000 units per period In a period, sales volume was 9,000 units, and production volume was 11,500 units. The actual profit for the same period, calculated using absorption costing, was $42,000. If the profit statement were prepared using marginal costing, identify the profit for the period: O $10,000. O $22,000. $50,000. $62,000Exam question 4 Identify which of the following statements would be true: fixed production overheads will always be under-absorbed when O Actual output is lower than budgeted output. O Actual overheads incurred are lower than budgeted overheads. Overheads absorbed are lower than those budgeted. O Overheads absorbed are lower than those incurred.Exam question 5 A company uses a standard absorption costing system. The fixed overhead absorption rate is based on labour hours. Extracts from the company's records for last year were as follows: Budget Actual Fixed production overhead $450,000 $475,000 Output 50.000 units 60,000 units Labour hours 900,000 930,000 The absorbed fixed production overheads for the year were $ . Select from the following to fill in the blanks: O Over; $65,000. O Over, $10,000. O Under; $65,000. Under; $10,000.Exam question 6 Using absorption costing, under which category would advertising be classified? O Production costs. O Direct costs. O Indirect costs. O Non-production costs.Exam question 7 Overhead absorption procedures call for indirect production costs to be initially: O Excluded from allocation. O Allocated to cost centres or cost codes. O Apportioned to direct production departments. O Absorbed into production costs.Exam question 8 Using absorption costing, production overhead costs are normally Absorbed at a predetermined rate, based on budgeted overhead expenditure and budgeted production volume. Absorbed at rates calculated using actual overhead costs and actual production volume. Treated as period costs and written off in total against the contribution of the period. O Apportioned between cost centres and absorbed using a specified method of cost allocation.Exam question 9 Which of the following is an advantage of marginal costing? The costing method follows the matching concept (accruals concept) by carrying forward a proportion of the production cost in the inventory valuation to be matched against the sales value when items are sold. The costing method reflects the behaviour of costs in relation to activity. The costing method produces inventory values, which include a shore of fixed production overhead. ) The costing method may be useful for identifying inefficient utilisation of production resources.Exam question 10 Background information Using absorption costing, which of the following amounts is the over (under) absorbed overhead for March? O $(5,000). O S(1,000). O $1,000. O $5,000.Keats pic commenced business on 1 March making one product only, the standard cost of which is as follows: Direct labour Direct material Variable production overhead Fixed production overhead Standard production cost 20 The fixed production overhead figure has been calculated on the basis of a budgeted normal output of 36,000 units per year. You are to assume that actual fixed overheads were as expected and that all the budgeted fixed expenses are incurred evenly over the year. March and April are to be taken as equal period months. Selling, distribution, and administration expenses are as follows: Fixed $120,000 per year Variable 15% of the sales valueThe selling price per unit is $35 and the number of units produced and sold were the following: March April (units] [units] Production 2.000 3.200 Sales 1.500 3,000 Prepare profit statements for each of the months of March and April using absorption costing and marginal costing. Answer the questions that follow.Exam question 11 Background information Using absorption costing, which of the following amounts is the over (under) absorbed overhead for April? ( $(5,000). O $(1,000). O $1,000. $5,000.Keats pic commenced business on 1 March making one product only, the standard cost of which is as follows: Direct labour Direct material Variable production overhead Fixed production overhead Standard production cost The fixed production overhead figure has been calculated on the basis of a budgeted normal output of 36,000 units per year. You are to assume that actual fixed overheads were as expected and that all the budgeted fixed expenses are incurred evenly over the year. March and April are to be taken as equal period months. Selling, distribution, and administration expenses are as follows: Fixed $120.000 per year Variable 15% of the sales valueThe selling price per unit is $35 and the number of units produced and sold were the following: March April (units] [units) Production 2.000 3.200 Sales 1.500 3,000 Prepare profit statements for each of the months of March and April using absorption costing and marginal costing. Answer the questions that follow.Exam question 12 Background information Using absorption costing, which of the following amounts is the production cost for March? O $35,000. O $40,000. O $45,000. O $60,000.Keats ple commenced business on 1 March making one product only, the standard cost of which is as follows: Direct labour Direct material Variable production overhead Fixed production overhead Standard production cost 20 The fixed production overhead figure has been calculated on the basis of a budgeted normal output of 36,000 units per year. You are to assume that actual fixed overheads were as expected and that all the budgeted fixed expenses are incurred evenly over the year. March and April are to be taken as equal period months. Selling, distribution, and administration expenses are as follows: Fixed $120.000 per year Variable 15% of the sales valueThe selling price per unit is $35 and the number of units produced and sold were the following March April [units) (units) Production 2.000 3.200 Sales 1.500 3.000 Prepare profit statements for each of the months of March and April using absorption costing and marginal costing. Answer the questions that follow.Exam question 13 Background information Using absorption costing, which of the following amounts is the production cost for April? O $46,000. $50,000. $60,000. $64,000. ConfirmKeats pic commenced business on 1 March making one product only, the standard cost of which is as follows: Direct labour Direct material Variable production overhead Fixed production overhead Standard production cost 20 The fixed production overhead figure has been calculated on the basis of a budgeted normal output of 36,000 units per year. You are to assume that actual fixed overheads were as expected and that all the budgeted fixed expenses are incurred evenly over the year. March and April are to be taken as equal period months. Selling, distribution, and administration expenses are as follows: Fixed $120.000 per year Variable 15% of the sales value The selling price per unit is $35 and the number of units produced and sold were the following:The selling price per unit is $35 and the number of units produced and sold were the following March April (units) [units) Production 2.000 3.200 Sales 1,500 3,000 Prepare profit statements for each of the months of March and April using absorption costing and marginal costing. Answer the questions that follow.Exam question 14 Background information Using absorption costing, which of the following amounts is net profit (loss) for March? ( $(375). O $7,500. $9,675. $17,500. ConfirmKeats ple commenced business on 1 March making one product only, the standard cost of which is as follows: Direct labour Direct material Variable production overhead Fixed production overhead Standard production cost 20 The fixed production overhead figure has been calculated on the basis of a budgeted normal output of 36,000 units per year. You are to assume that actual fixed overheads were as expected and that all the budgeted fixed expenses are incurred evenly over the year. March and April are to be taken as equal period months. Selling, distribution, and administration expenses are as follows: Fixed $120.000 per year Variable 15% of the sales value The selling price per unit is $35 and the number of units produced and sold were the following:March April [units] [units] Production 2.000 3.200 Sales 1,500 3.000 Prepare profit statements for each of the months of March and April using absorption costing and marginal costing. Answer the questions that follow.Exam question 15 Background information Using absorption costing, which of the following amounts is net profit for April? O $20,250. O $30,250. O $36,000. O $46,000.Keats pic commenced business on 1 March making one product only, the standard cost of which is as follows: Direct labour Direct material Variable production overhead Food production overhead Standard production cost 20 The fixed production overhead figure has been calculated on the basis of a budgeted normal output of 36,000 units per year. You are to assume that actual fixed overheads were as expected and that all the budgeted fixed expenses are incurred evenly over the year. March and April are to be taken as equal period months. Selling, distribution, and administration expenses are as follows: Faced $120.000 per year Variable 15% of the sales value The selling price per unit is $35 and the number of units produced and sold were the following:March April [units) [units] Production 2.000 3.200 1,500 3,000 Prepare profit statements for each of the months of March and April using absorption costing and marginal costing. Answer the questions that follow.Exam question 16 Background information Using marginal costing, which of the following amounts is the production cost for March? $22,500. $30,000. O $45,000. $60,000. ConfirmKeats pic commenced business on 1 March making one product only, the standard cost of which is as follows: Direct labour Direct material Variable production overhead Fixed production overhead Standard production cost The fixed production overhead figure has been calculated on the basis of a budgeted normal output of 36,000 units per year. You are to assume that actual fixed overheads were as expected and that all the budgeted fixed expenses are incurred evenly over the year. March and April are to be taken as equal period months. Selling, distribution, and administration expenses are as follows: $120,000 per year Variable 15% of the sales value The selling price per unit is $35 and the number of units produced and sold were the following:March April (units) [units) Production 2.000 3.200 Sales 1,500 3.000 Prepare profit statements for each of the months of March and April using absorption costing and marginal costing. Answer the questions that follow.Exam question 17 Background information Using marginal costing, which of the following amounts is the production cost for April? O $45,000. O $48,000. O $55,500. O $65,500.Keats pic commenced business on 1 March moking one product only, the standard cost of which is as follows: Direct labour Direct material Variable production overhead Fixed production overhead Standard production cost The fixed production overhead figure has been calculated on the basis of a budgeted normal output of 36,000 units per year. You are to assume that actual fixed overheads were as expected and that all the budgeted fixed expenses are incurred evenly over the year. March and April are to be taken as equal period months. Selling, distribution, and administration expenses are as follows: Fixed $120.000 per year Variable 15% of the sales value The selling price per unit is $35 and the number of units produced and sold were the following:March April (units] (units) Production 2.000 3.200 Sales 1.500 3.000 Prepare profit statements for each of the months of March and April using absorption costing and marginal costing. Answer the questions that follow.Exam question 18 Background information Using marginal costing, which of the following amounts is the contribution for April? O $22,125. O $30,000. O $44,250. O $60,000.Keats ple commenced business on 1 March making one product only, the standard cost of which is as follows: Direct labour Direct material Variable production overhead Fixed production overhead Standard production cost 12 The fixed production overhead figure has been calculated on the basis of a budgeted normal output of 36,000 units per year. You are to assume that actual fixed overheads were as expected and that all the budgeted fixed expenses are incurred evenly over the year. March and April are to be taken as equal period months. Selling, distribution, and administration expenses are as follows: Fixed $120.000 per year Variable 15% of the sales value The selling price per unit is $35 and the number of units produced and sold were the following:March April [units) [units) Production 2.000 3.200 Sales 1,500 3,000 Prepare profit statements for each of the months of March and April using absorption costing and marginal costing. Answer the questions that follow.Exam question 19 Background information Using marginal costing, which of the following amounts is net profit (loss) for March? O $(2,875). $7,125. $12,125. $22,125.Keats ple commenced business on 1 March making one product only, the standard cost of which is as follows: Direct labour Direct material Variable production overhead Fixed production overhead Standard production cost 20 The fixed production overhead figure has been calculated on the basis of a budgeted normal output of 36,000 units per year. You are to assume that actual fixed overheads were as expected and that all the budgeted fixed expenses are incurred evenly over the year. March and April are to be taken as equal period months. Selling, distribution, and administration expenses are as follows: Fixed $120,000 per year Variable 15% of the sales value The selling price per unit is $35 and the number of units produced and sold were the following:March April (units] (units] Production 2.000 3.200 Sales 1.500 3.000 Prepare profit statements for each of the months of March and April using absorption costing and marginal costing. Answer the questions that follow.Exam question 20 Background information Using marginal costing, which of the following amounts is net profit for April? O $19,250. O $29,250. O $34,250. O $44,250.Keats pic commenced business on 1 March making one product only, the standard cost of which is as follows: Direct labour Direct material Variable production overhead Fixed production overhead Standard production cost 20 The fixed production overhead figure has been calculated on the basis of a budgeted normal output of 36,000 units per year. You are to assume that actual fixed overheads were as expected and that all the budgeted fixed expenses are incurred evenly over the year. March and April are to be taken as equal period months. Selling, distribution, and administration expenses are as follows: Fixed $120.000 per year Variable 15% of the sales value The selling price per unit is $35 and the number of units produced and sold were the followingMarch April (units) [units) Production 2.000 3.200 Sales 1.500 3,000 Prepare profit statements for each of the months of March and April using absorption costing and marginal costing. Answer the questions that follow