Questions FMA

Sir,I wanted to know whether my answers to these questions are correct or not? plz help me!

Which of the following best describes the term ‘equivalent units’ when using the FIFO method?
A The number of units worked on during a period including the opening and closing stock units.

B The number of whole units worked on during a period ignoring the levels on completion of opening and closing stock units.

C The number of effective whole units worked on during a period allowing for the levels of completion of opening and closing stock units.

D The total number of whole units started during a period ignoring the opening stock units as these were started in the previous period.

Ans. C

The insurance on the factory building would be a

A Conversion cost but not a prime cost
B A prime cost but not a conversion cost
C Both a prime cost and a conversion cost
D Neither a prime cost or a conversion cost

Ans.D

The following statements refer to situations in Process X of an organization which operates a series of consecutive processes:

(i) Direct labour is working at below the agreed productivity level
(ii) A machine breakdown has occurred
(iii) Direct labour is waiting for work to be completed in a previous process

A (i) and (ii) only
B (i) and (iii) only
C (ii) and (iii) only
D (i), (ii) and (iii)

Ans.D

Which of the following is not a performance measure from the financial perspective?

A Revenue per employee
B Customer satisfaction index
C Cost reduction per business unit
D Increased operating income from productivity gains

Ans.C

Net cash flows, estimated for a capital investment project, have been discounted at four discount rates with the following results

5% 10% 15% 20%
92.9 39.1 (4.8) (40.9)
What is the best estimate of the IRR using only the above data as appropriate?

A 13.6% B 14.5% C 15.4% D 15.7%

Ans. B

A project, investing in new machinery, has an estimated five year life. The cost of capital is 10% per annum. Estimated cash flows are:

Time Cash flows
0 (cost) ($186,000)
1 to 5 (inflows) $56,000 per annum
5 (residual value) $10,000
The cumulative discount factor at 10% for Time 1 to 5 is 3.79. The discount factor at 10% for Time 5 is 0.62.

What is the net present value of the project?
A $16,240 B $20,040 C $32,440 D $36,240

Ans. C

A cost centre is charged with the following actual overhead costs for a period:
Allocated costs $28,720
Apportioned costs $10,260

Overheads were absorbed in the cost centre over a period of 1,760 actual labour hours at a predetermined absorption rate of $21.50 per hour. Actual labour hours worked in the period were 90 hours above budget.

What was the overhead over/under absorption in the cost centre?
A $1,140 B $1,935 C $3,055 D $9,120

Ans. D

Adam wishes to make a comparison between the sales revenue figures for two different time periods.
The following figures were recorded:
Sales Inflation Index
Year 7 $325,000 124
Year 10 $435,000 130

What is the real increase in the sales revenue over this period in % terms?
A 7.9% B 27.7% C 33.8% D 403.3%

Ans. B

When considering setting standards for costing which of the following would NOT be considered
relevant?

A The normal level of activity should always be used for absorbing overheads.
B Average prices for materials should be used, encompassing any discounts that are regularly available.
C The labour rate used will be the rate at which labour is paid.
D Average material usage should be established based on generally accepted working practices

Ans. B