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A company operates an absorption costing system. Overheads are absorbed using a pre-determined absorption rate using labour hours.
A company operates an absorption costing system. Overheads are absorbed using a pre-determined absorption rate using labour hours. Actual labour hours were 10% below budget for the period and overheads incurred were 10% above budget for the period. This would result in:A . An over-absorption of overheads for the periodB...
Refer to the exhibit.
Refer to the exhibit. Data for October's budget for product Quest for the month of October are given below: Each unit of Quest requires 6kg of raw materials. Strict quality control procedures are applied to the manufacturing process and normal rejection levels are 5% of finished units. The raw materials...
What will be the production budget (in units) for the year?
CORRECT TEXT Apex Plc has budgeted to sell 8,000 units of A in the year. Opening inventory of A is estimated at 1,000 units and the company plans to reduce inventory levels of all products by 15%. What will be the production budget (in units) for the year?View AnswerAnswer: 7850...
CORRECT TEXT
CORRECT TEXT Refer to the exhibit. Each unit of product ‘Smitten’ uses 5 kgs of material 'Z'. The budgeted details for March are as follows: It is anticipated that sales of product ‘Smitten’ in March will be 20000 units. The amount of material 'Z' that needs to be purchased in...
What was the material price variance for period 3?
Refer to the exhibit. Xell Ltd uses a standard costing system and therefore values all inventory at standard cost. During period 3 the price paid for material 'A' was £6 per kg less than the standard price. The following information for material 'A' relates to period 3: What was the...
In a manufacturing company which produces a range of products, the production manager's salary would be classified as A.
In a manufacturing company which produces a range of products, the production manager's salary would be classified as A. A. Direct labour cost B. Direct expense C. Indirect labour cost D. Indirect expenseView AnswerAnswer: C
What was the average cost per kg of finished output during the month?
Eton Ltd. operates a manufacturing process that produces product A. Information for this process last month is as follows: (a) Opening work in progress - 2,500 kg valued at £2,000 for direct material and £1,500 for labour and overheads. (b) Materials input - 25,000 kg at £2.10 per kg. (c)...
CORRECT TEXT
CORRECT TEXT Refer to the Exhibit. A company operates a batch costing system. Production overhead costs are absorbed into the cost of batches using a direct labour hour rate. Other overhead costs are absorbed at a rate of 20% of total production cost. The company adds a mark-up of 10%...
What effect will this have on the margin of safety?
Refer to the exhibit. X Enterprises runs a private nursing home for the elderly. The company are concerned that bed occupancy rates have been falling over the past 2 years with a consequential effect on profit. They have drawn up a budget for next year as follows: The nursing home...
Within a relevant range of output, the fixed cost per unit of a product will:
Within a relevant range of output, the fixed cost per unit of a product will:A . Increase as total output increasesB . Remain constant as total output increasesC . Reduce as total output increasesD . Impossible to tell without more informationView AnswerAnswer: C
