职上网在线题库 > ACCA英国注册会计师试题 > F2 > Chapter9-10 > The follow...

The following question is taken from the June 2013 exam paper.

A company has the following budgeted costs and revenues:

$ per unit

Sales price 50

Variable production cost 18

Fixed production cost 10

In the most recent period, 2,000 units were produced and 1,000 units were sold. Actual sales price, variable production cost per unit and total fixed production costs were all as budgeted. Fixed production costs were over-absorbed by $4,000. There was no opening inventory for the period.

What would be the reduction in profit for the period if the company has used marginal costing rather than absorption costing?

A

4,000

B

6,000

C

10,000

D

14,000

扫码查看暗号，即可获得解锁答案！

在此输入暗号

点击获取答案

Chapter9AbsorptionandmarginalCosting

The correct answer is C. This can be calculated by multiplying the increase in finished goods inventory of 1,000 units (2,000 units produced less 1,000 units sold) by the fixed production cost per unit that will be included in absorption costing closing inventory valuation.

The distracters were all based around the $4,000 over-absorption of fixed production cost. Distracter A suggests that the difference in profits will be equal to the over- absorption of fixed production cost, whereas B and D suggest that it is due to a difference in inventory valuation and over-absorption of fixed production cost. Incorrect answers were roughly evenly spread around the 3 distracters, suggesting a misunderstanding of under- or overabsorption (or possibly a high level of guessing).

Under- or over-absorption adjustments to profit do not cause a difference between marginal and absorption costing profits. They simply ensure that absorption costing charges the same amount of fixed overhead as marginal costing.

If we look in more detail at the situation it is apparent that the over-absorption of $4,000 was caused by the production of 400 units more than budgeted ($4,000 ^ $10 per unit). Budgeted production would therefore be 1,600 units (2,000 units actually produced less the 400 units above).

It follows that budgeted fixed production cost was therefore 1,600 units x $10 per unit = $16,000. As actual fixed production cost was equal to budgeted, marginal cost fixed production costing would have recorded an actual fixed production cost of $16,000.

Absorption costing would have charged $20,000 of fixed production cost to product (2,000 units produced x $10 per unit), however the adjustment for over-absorption would have corrected this overcharge and reduced this cost by $4,000, resulting in the same fixed production cost as marginal costing.

The important point is that it is not under- or over-absorption that causes the difference between profits under absorption and marginal costing principles. The difference in profits is caused by the difference in finished goods inventory valuations.

多做几道

Which of the following statements about management accounting information is/are true?

(i) They must be stated in purely monetary terms.

(ii) Limited companies must, by law, prepare management accounts.

(iii) They serve as a future planning tool and are not used as an historical record.

A

(i), (ii) and (iii)

B

(i) and (ii)

C

(ii) only

D

None of the statements is true

Which of the following statements is/are correct?

(i) A management control system is a term used to describe the hardware and software used to drive a database system which produces information outputs that are easily assimilated by management.

(ii) An objective is a course of action that an organisation might pursue in order to achieve its strategy.

(iii) Information is data that has been processed into a form meaningful to the recipient.

A

(i), (ii) and (iii)

B

(i) and (iii)

C

(ii) and (iii)

D

(iii) only

Good information should have certain qualities. Which of the following are qualities of good information?(i) Complete(ii) Extensive(iii) Relevant(iv) Accurate

A

(i), (ii) and (iii)

B

(i), (iii) and (iv)

C

(ii) and (iv)

D

All of them

Monthly variance reports are an example of which one of the following types of management information?

A

Tactical

B

Strategic

C

Non-financial

D

Operational

Which of the following statements is/are correct?

(i) Information for decision-making should incorporate uncertainty in some way

(ii) The data used to prepare financial accounts and management accounts are the

A

(i) is true and (ii) is false

B

(ii) is true and (i) is false

C

Both are true

D

Both are false

最新试题

该科目易错题

该题目相似题

Which of the following statements is/are correct?(i) A management control system is a term used to describe the hardware and software used to drive a database system which produces information outputs that are easily assimilated by management.(ii) An objective is a course of action that an organisation might pursue in order to achieve its strategy.(iii) Information is data that has been processed into a form meaningful to the recipient.A(i), (ii) and (iii)B(i) and (iii)C(ii) and (iii)D(iii) only
The supplier has offered Point a discount of 1% on the purchase price if each order placed is for 2,000 units.What is the total annual saving to Point of accepting this offer?A$29,280B$30,080C$37,200D$38,000
In a period, a company had opening inventory of 31,000 units of Product G and closing inventory of 34,000 units. Profits based on marginal costing were $850,500 and profits based on absorption costing were $955,500.If the budgeted fixed costs for the company for the period were $1,837,500, what was the budgeted level of activity?A24,300 unitsB27,300 unitsC52,500 unitsD65,000 units
A company uses process costing to establish the cost per unit of its output. The following information was available for the last month:Input units 10,000Output units 9,850Opening inventory 300 units, 100% complete for materials and 70% complete for conversion costsClosing inventory 450 units, 100% complete for materials and 30% complete for conversion costsThecompany uses the weighted average method of valuing inventory.What were the equivalent units for conversion costs?A9,505 unitsB9,715 unitsC9,775 unitsD9,985 units
Under which of the following circumstances would a multiplicative model be preferred to an additive model in time series analysis?AWhen a model easily understood by non-accountants is requiredBWhen the trend is increasing or decreasingCWhen the trend is steady DWhen accurate forecasts are required
Which of these statements is untrue?A Spreadsheets make the calculation and manipulation of data easier and quicker BSpreadsheets are very useful for word-processing CBudgeting can be done very easily using spreadsheets DSpreadsheets are useful for plotting graphs
The following details have been extracted from the receivables collection records of C Co.Invoices paid in the month after sale 60%Invoices paid in the second month after sale 25%Invoices paid in the third month after sale 12%Bad debts 3%Invoices are issued on the last day of each month.Customers paying in the month after sale are entitled to deduct a 2% settlement discount. Credit sales values for June to September are budgeted as follows. June July August September $35,000 $40,000 $60,000 $45,000What is the amount budgeted to be received from credit sales in September?A$46,260B$49,480C$50,200D$50,530
The following extract is taken from the production cost budget of S Co.Production (units) 2,000 3,000Production cost ($) 11,100 12,900What is the budget cost allowance for an activity level of 4,000 units?A$7,200B$7,500C$13,460D$14,700
Which of the following statements about budgeting and motivation are true?(i) A target is more motivating than no target at all(ii) The problem with a target is setting an appropriate degree of difficulty(iii) Employees who are challenged tend to withdraw their commitmentAAll of themB(ii) and (iii) onlyC(i) and (ii) onlyD(iii) only
The following data relates to one of a company's products. $ per unit $ per unit Selling price 27,00Variable costs 12.00Fixed costs 9.00 21.00Profit 6.00Budgeted sales for control period 7 were 2,400 units, but actual sales were 2,550 units. The revenue earned from these sales was $67,320.Profit reconciliation statements are drawn up using marginal costing principles. What sales variances would be included in such a statement for period 7?APrice Volume$1,530 (A) $900 (F)BPrice Volume$1,530 (A) $2.250 (F)C Price Volume$1,530 (A) $2.250 (A)DPrice Volume$1,530 (F) $2.250 (F)