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Questions # 31:

A company is launching a new product with a selling price of $20.

Demand and variable cost are both uncertain and possible demand levels and variable costs are given below:

Question # 31

Outcomes for demand and variable cost are independent.

What is the expected contribution from the product?

Give your answer as a whole number.

Options:

Expert Solution

Questions # 32:

Explain THREE benefits that organizations gain from using budgetary planning and control systems.

Select ALL the true statements.

Options:

The budget acts as a variable mechanism, with actual results being compared with budget.

Budgeting forces an organization’s management to look ahead and set performance targets.

The budget provides an external benchmark against which performance against which performance can be evaluated.

The budget ensures actions of different parts of the organization are coordinated are reconciled otherwise managers take actions for the benefit of their own part of organization that may not benefit the organization as a whole.

Another benefit of budgeting is to set targets to motivate managers and optimize their performance.

The budget is a useful device of influencing an operator’s thoughts and motivating operators to perform in line with the organization’s marketing budget.

It provides a standard which managers may be motivated to achieve. It can also encourage inefficiency and conflict between managers particularly if the budget is imposed from above, whereby it may act as a threat rather than as a challenge.

Expert Solution

Questions # 33:

Which TWO of the following statements are true for obtaining a reliable forecast from a time series?

Options:

There must be an increasing trend.

The past trend must continue in the future.

The past pattern of seasonal variations must continue in the future.

Extrapolation of the trend must be avoided.

There must be a decreasing trend.

Expert Solution

Questions # 34:

A company produces and sells two products, product A and product B.

What are the total fixed costs when the weighted average contribution per unit is $5 and the breakeven points for product A and product B are 10,000 units and 5,000 units respectively?

Give your answer as a whole number (in 000's).

Options:

Expert Solution

Questions # 35:

A company produces trays of pre-prepared meals that are sold to restaurants and food retailers. Three varieties of meals are sold: economy, premium and deluxe.

Question # 35

Calculate, for the original budget, the budgeted fixed overhead costs, the budgeted variable overhead cost per tray and the budgeted total overheads costs.

Options:

The variable cost per tray = $0.75; The fixed cost = $ 490 000

The variable cost per tray = $0.65; The fixed cost = $ 550 000

The variable cost per tray = $0.45; The fixed cost = $ 320 000

The variable cost per tray = $0.85; The fixed cost = $ 530 000

Expert Solution

Questions # 36:

The budgeted production of product G for the period was 300 units. At the end of the period it was discovered that the standard hourly rate for labour should have been higher than that originally planned. Actual production was 450 units.

The labour rate planning variance would be calculated as:

Options:

The revised standard cost of 450 units compared with the original standard cost of 450 units

The revised standard cost of 300 units compared with the orginal standard cost of 300 units

The revised standard cost of 450 units compared with the original standard cost of 300 units

The revised standard cost of 300 units compared with the original standard cost of 450 units

Expert Solution

Questions # 37:

5c0e02ae-e691-41dd-b436-d41e2edaf83f: A company is using relevant costing to evaluate a make or buy decision.

The company already has a machine on an operating lease which can be used to make the product.

How would the lease rental cost be classified?

Options:

Expert Solution

Questions # 38:

Which THREE of the following would be contained within a master budget?

Options:

Budgeted statement of financial position

Budgeted cash flow statement

Budgeted income statement

Capital expenditure budget

Directors' salaries budget

Sales budget

Expert Solution

Questions # 39:

Place each activity against the correct category according to its classification in the cost hierarchy of activities.

Question # 39

Options:

Expert Solution

Questions # 40:

Which THREE of the following are advantages of activity-based costing (ABC), in a multi-product environment, when compared with traditional absorption costing?

Options:

ABC provides a better understanding of overhead costs.

ABC provides more accurate product costs in a complex business environment.

ABC is cheaper to operate.

ABC results in increased unit profit for each product.

ABC leads to better product pricing decisions.

Expert Solution

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