See also ACCA F2 Flashcards: Set 1 | Set 3 | Set 4
What is a ‘delivery note’?
A delivery note is included by the supplier with the goods, and lists the quantity of goods that are being delivered.
What is a ‘sunk cost’?
A sunk cost is a cost already incurred (and is not relevant for investment decisions)
What is meant by the term ‘by-product’?
A by-product is output from a process which has a low value relative to the main product(s) being produced in the process.
What is meant by a piecework system of remuneration?
Employees are paid a fixed amount for each unit produced.
What are the four main elements that one would expect to appear in a Mission Statement?
The four main elements are:
- Purpose
- Strategy
- Culture
- Values
What is meant by the ‘cost gap’ in the context of target costing?
The cost gap is the excess of the estimated actual cost over the target cost.
What is the symbol for the coefficient of correlation on the formulae sheet?
r is the coefficient of correlation
What is the Current Ratio?
The current ratio = current assets / current liabilities
What are the purposes of budgeting?
Planning
Control
Co-ordination
Authorisation
Communication
Motivation
Evaluation
In the formula on the formula sheet for the Economic Order Quantity, what does the symbol D represent?
D represents the total demand per year.
What is a ‘variable cost’?
A variable cost is one which varies in total with the level of activity.
What is meant by the word ‘contribution’?
The contribution is the profit before fixed costs (or the revenue less all variable costs).
How is the coefficient of determination calculated?
The coefficient of determination is the square of the coefficient of correlation.
What is the difference between the allocation of overheads and the apportionment of overheads?
Allocation – whole cost items are charged to the relevant cost centre
Apportionment – cost items are shared/divided between several cost centres
What is meant by the ‘payback period’?
The payback period is the number of years it takes to get back the original investment, in cash terms.
Under what circumstances will the profit using marginal costing and the profit using absorption costing be the same?
The profits will be the same if there is no change in the level of inventory over the period (i.e. when the closing inventory is the same level as the opening inventory).
Define the labour capacity ratio
Labour capacity ratio = Number of hours spent working / total hours available x 100%
Give possible reasons for an adverse material expenditure variance.
Possible reasons for an adverse material expenditure variance include:
- paying more than the budgeted price per unit of materials due to errors in purchasing
- a price increase in materials
- purchasing better quality materials
- incorrect budgeting of the standard cost of materials
What is the difference between a profit mark-up and a profit margin?
A mark-up is when the profit is calculated as a percentage of cost; a margin is when the profit is calculated as a percentage of selling price.
What are the four main differences between the output of service and manufacturing businesses?
* Intangibility – the output of a service industry is performance rather than tangible goods.
* Perishability – a service cannot be stored
* Simultaneity – a service is received by the customer at the same time as it is delivered – it cannot be checked first.
* Heterogeneity – every service is likely to be different.
What is the reason for a difference between the profit calculated under marginal costing principles and the profit calculated under absorption costing principles?
The difference is because of the difference in the way opening and closing inventories are valued. Under marginal costing they are valued at the marginal (variable) cost of production; under absorption costing they are valued at the full cost of production (variable plus fixed).
What is meant by an ‘incremental cost’?
An incremental cost is an extra cost (and is relevant for investment decisions).
sir,very useful.
These are really useful is there anyway I can download them?
I like this notes but are these enough to write the exam
F2 course notes are here: http://opentuition.com/acca/f2/
flashcards are just a small tool to help your revision
can someone tell me how to downlown these flash cards
You can only use this interactive revision on line
You can download the course notes – all information and lots more in the the notes -
Most of the notes come up blank when clicking on the answer
try another browser – or maybe your internet connection is slow?
make sure you have javascript enabled,
can it be downloaded?
some notes dont have answers
@amala, try another browser. all cards are fine