Subsection 2.1. Costs and cost behaviour for Accounting, A Level - revisedeck

2.1. Costs and cost behaviour

A subsection of Accounting, 9706, through 2. Cost and management accounting (AS Level)

Listing 10 of 370 questions

The table shows information relating to closing inventory. $ cost 50 000 realisable value 45 000 costs of realisation 5 000 replacement cost 35 000 What is the value of the closing inventory?

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MCQ

2012

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A business was started on 1 January. The purchases and sales of inventory for January were: date purchases sales 4 January 3 @ $200 – 13 January – 2 @ $400 26 January 3 @ $250 – 28 January – 2 @ $400 The business used the first in first out (FIFO) method of inventory valuation. What was the gross profit for January?

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MCQ

2012

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The following information relates to the financial statements of a business. $000 opening inventory 2 470 closing inventory 2 156 cost of sales for year 12 500 revenue for year 21 660 What was the inventory turnover in days?

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MCQ

2012

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During the past month, a business lost some inventory because of theft. The table shows the trading results for the month. $ opening inventory, at cost 50 000 purchases 220 000 sales 300 000 closing inventory, at cost 16 000 The mark up is 25%. What was the cost price of the stolen inventory?

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MCQ

2014

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A business has the following information for the past two financial years. year 1: average inventory $100 000; revenue $800 000; gross margin 25%. year 2: average inventory $140 000; revenue $1 200 000; gross margin 30% What is the inventory turnover in year 2?

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MCQ

2014

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A business values its inventory using the FIFO method. The following transactions took place. month units $ April opening inventory at 190 each May purchases at 220 each June sales at 400 each What is the value of the closing inventory at the end of June?

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MCQ

2014

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At the beginning of the financial year inventory was valued at $15 000. During the year, sales of $21 000 and purchases of $18 000 were made. Unfortunately, all inventory was stolen on the last day of the financial year. Goods are marked up by 50% to calculate selling price. What is the cost of the stolen inventory?

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MCQ

2014

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On 1 January a business had an inventory of 100 units at a cost of $10 each. The following transactions then took place. units purchased units sold February March 60 at $11 each April 70 at $12 each May All sales are made at $13 per unit. The business values its inventory on a FIFO basis. What is the value of the inventory at the end of May?

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MCQ

2015

Paper 1, Variant 1

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A trader’s closing inventory includes damaged items that originally cost $500. These items will cost $150 to repair and they will then be sold for $600. At which value will these items be recorded in the trader’s inventory?

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MCQ

2015

Paper 1, Variant 3

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Tellwright Limited started trading on 1 January 2015. It produced two products, the Mynor and the Hanbridge. After three months of trading the following information was available. Mynor Hanbridge Units produced Units sold Direct materials per unit 2 kilos at $6 per kilo 3 kilos at $5 per kilo Direct labour per unit 4 hours at $9 per hour 4.5 hours at $10 per hour Selling price per unit $90 $120 REQUIRED Complete the following table to show the total direct cost incurred for each product in the three month period ended 31 March 2015. Mynor $ Hanbridge $ Direct materials Direct labour Total Additional information In addition to the two production departments there was also a sales and administration department. Data relating to the three departments were as follows. Mynor Hanbridge Sales and administration Floor area (square metres) 2 500 2 000 Power usage (kilowatt hour) 12 000 15 000 3 000 Non-current assets (cost at start of trading) $9 000 $8 000 $3 000 Following information is also available. The factory supervisor is paid $23 600 a year. His time is spent in proportion to the direct labour hours worked in each production department. The lease specifies that the rent is $50 000 a year. The invoice for power used in the first three months of trading amounted to $6000. Depreciation is charged at a rate of 20% per annum on cost. Sales and administration costs amounted to $13 550 for the three months. These are regarded as fixed costs by the business. No inventory of raw materials is kept. Inventory of finished goods is valued on the basis of absorption cost. REQUIRED Complete the following table to value inventory by allocating overhead costs across the three departments for the three months ended 31 March 2015. (Where there is no allocated cost enter a zero.) Total $ Mynor $ Hanbridge $ Sales and administration $ Supervisor’s salary Rent Power Depreciation Sales and administration Total Complete the following table to show the value of inventory of each product at 31 March 2015. Mynor $ Hanbridge $ Value per unit Number of units in inventory Total value of inventory Question 3is on the next page. Prepare the manufacturing account for the three months ended 31 March 2015. Prepare the income statement for the three months ended 31 March 2015.

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THEORY

2015

Paper 2, Variant 3

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Questions Discovered

370