Free CIMA BA2 Practice Exam with Questions & Answers | Set: 2

Within a relevant range of output, the fixed cost per unit of a product will:

Refer to the exhibit.

Budget information for 'Crome Ltd' is as follows:

The budgeted cost allowance for the sale of 1000 units would be:

Each unit of product GM requires 4 labour hours to be produced. 25% of the units will be completed during overtime hours.

Sales of 24,000 units are planned and finished goods inventory is budgeted to rise by 2,000 units.

If the wage rate is £6 per hour and the overtime premium is 50%, what is the budgeted labour cost?

Refer to the Exhibit.

AM Ltd. makes and sells a single product for which the standard cost information is as follows:

• Budgeted production for the period is 30000 units.
• The actual results for the period were as follows:

What is the variable overhead expenditure variance?

Which of the following statements is correct?

i. sector bodies use budgetary planning and control systems

ii. costing cannot be used by public sector bodies because they have no measurable output

iii. in public sector bodies tend to focus on cost management therefore they have no need for non-financial information

Refer to the Exhibit.

PD manufactures a product in a process operation. Normal loss is 5% of input and occurs at the end of the process. The following data is available for the month of August:

Scrapped units have no value.

There was no opening or closing work in progress for August.

What is the value of the abnormal gain in August?

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?

A company operates a full cost system of pricing. Production overheads are absorbed using a pre-determined absorption rate of £3.50 per machine hour. The direct production cost of product A is £15 per unit and it utilises 6 machine hours per unit. The mark-up for non-production costs is 10% of total production cost. The company wants to make a 25% return on sales revenue for all products.

The required selling price for Product A, to two decimal places, is:

Refer to the Exhibit.

Fabex Ltd manufactures a household detergent called "Clear". The standard data for one of the chemicals used in production (chemical XTC) is as follows:

(a) 50 litres used per 100 litres of 'Clear' produced

(b) Budgeted monthly production is 1000 litres of 'Clear'.

The closing inventory of chemical XTC for November valued at standard price was as follows:

Actual results for the period during December were as follows:

(a) 500 litres of chemical XTC was purchased for £1300.

(b) 550 litres of chemical XTC was used.

(c) 900 litres of 'Clear' was produced.

It is company policy to extract the material price variance at the time of purchase.

What is the total direct material price variance (to the nearest whole number)?

Which one of the following is NOT one of the five stated fundamental principles of CIMA's code of ethics?