MA CAT ONE REAL

Q1

The following details are available for a company:
 Detail                        Budgeted                                                 Actual
Expenditure              sh 176,400                                             sh 250,400
Machine hours               4,000                                                      5,000
Labour hours                  3,600                                                     5,400
The company absorbs overheads using labour hours.

Q2

A company values inventory using the weighted average cost method. The following
information is available:
state                                              Purchases                                                                            Balance
Date                                   Units                          Total value                                         Units                               Total value
1 July                                                                                                                                 50                                 750
8 July                                       30                                 600
14 July                                     40                                 680
On 21 July 60 units were sold for shs 1,800.
What was the value of closing inventory at 31 July to the nearest shs

Q3

Use the data below to answer the following questions

The total costs incurred at various output levels in a factory have been measured as follows:
Output in units                      Total cost (shs)
25                                        5,500
30                                        5,450
33                                        5,550
44                                        6,000
48                                        6,500
55                                        7,000

a) What are the variable cost per unit and the total fixed costs using High low  method?

Q4

Below is the standard cost card for one unit of product K.
Details                                                     shs/unit
Selling price                                             35
Direct materials                                        20
Direct labour                                            4
Variable overhead                                    1
Fixed overhead                                         6
Production was 50,000 units and sales 60,000 units. Opening inventory was 25,000 units. The
profit calculated using marginal costing was shs180,000.
What is the profit using absorption costing?

Q5

A Company manufactures and sells one product which requires 8 kg of raw material in its
manufacture. The budgeted data relating to the next period are as follows:
Details                                                                                                      Units
Sales                                                                                                        19,000
Opening inventory of finished goods                                                       4,000
Closing inventory of finished goods                                                          3,000
details                                                                                                            Kg
Opening inventory of raw materials                                                             50,000
Closing inventory of raw materials                                                              53,000
What is the budgeted raw material purchases for next period (in kg)?

Q6

Which TWO of the following are benefits of budgeting?

Q7

The following statements relate to the participation of junior management in setting
budgets:
1 It speeds up the setting of budgets
2 It increases the motivation of junior managers
3 It reduces the level of budget padding
Which statements are true?

Q8

A factory consists of two production cost centres (P and Q) and two service cost centres
(X and Y). The total allocated and apportioned overhead for each is as follows:
P                                            Q                  X                      Y
Shs 95,000                Shs 82,000    Shs 46,000        Shs 30,000
It has been estimated that each service cost centre does work for other cost centres in the
following proportions:
Centre                                                                          P               Q        X         Y
Percentage of service cost centre X to                        50            50        –         –
Percentage of service cost centre Y to                         30             60       10       –
The reapportionment of service cost centre costs to other cost centres fully reflects the above
proportions.
After the reapportionment of service cost centre costs has been carried out, what is the
total overhead for production cost centre P?

Q9

The following statements relate to the advantages that linear regression analysis has over
the high low method in the analysis of cost behaviour:
1 the reliability of the analysis can be statistically tested
2 it takes into account all of the data
3 it assumes linear cost behaviour
Which of the above statements are TRUE?

Q10

Jojo is an assembly worker earning Shs 12 per hour for a basic 35 hour week. Any overtime is
paid at a premium of 50%.
In the last four‐week period, Jojo was paid for 150 hours. During this time 15 hours were
classed as idle due to a machine breaking down. Also included in the number of hours are
four hours’ overtime spent working for an urgent job at the request of the customer.
How much should be charged to the production overhead account for the four‐week
period?