Gallifrey Components produces a stylish reclining chair. Which one of the following is not an indirect production cost?

Which one of the following statements describes prime cost?

Prime cost is the total of:

Which one of the following statements describes prime cost?

Which one of the following statements about cost is not correct?

Which one of the following statements is correct?

The term ‘absorption costing’ describes:

Breech & Watkin produce custom-built summerhouses. Each summerhouse is individually designed for the client, and no two are alike. Which method of accumulating costs is most appropriate for Breech & Watkin?

Weston Pemberley manufactures coffee machines under licence from an Italian company. It incurred the following production costs for the month ended 31 July 2010:

	€
Coffee machine parts and components	3630
Factory rental costs	1664
Electricity factory	536
Machine operators' wages	6620
Sundry direct materials costs	662
Royalty payments to Italian company	664
Depreciation of factory machinery	862
Sundry factory costs	937
Plastic for coffee machines	1236
Factory cleaning	212

What was the total of direct expenses for July 2010?

Spokane & Wildebeeste is a business that manufactures clothing. It incurred the following production costs in the month of April 2009:

	€
Factory cleaning	132
Thread and trimmings	227
Sewing machine operatives' wages	2275
Factory rental and insurance	1668
Supervisors' wages	862
Fabric	1324
Repairs to sewing machines	162
Light and heat in factory	372
Depreciation	296

What was the total of direct expenses for April 2009?

Slinn & Beazley is a company that produces computer controlled knitting machines. It incurred the following production costs in the month of March 2009:

	€
Knitting machine components	3630
Factory rental costs	1664
Electricity – factory	536
Machine operators' wages	6620
Sundry direct materials costs	1326
Depreciation of factory machinery	862
Sundry factory costs	937
Circuit boards for knitting machines	1236
Factory cleaning	212

What was the total of production overheads for the month of March 2009?

Prade Enterprises produces handbags. It incurred the following production costs in the month of November 2009:

	€
Factory cleaning	132
Clasps, zips, etc.	227
Machine operatives' wages	2275
Factory rental and insurance	1668
Supervisors' wages	862
Leather and fabric	1324
Repairs to machines	162
Light and heat in factory	372
Depreciation	296

What was the total of production overheads for the month of November 2009?

Pendle Unsworth manufactures baby buggies and pushchairs. One of the materials used in production is a heavily plasticized fabric. During the first week in January 2010 the following deliveries into inventory and transfers into production of the fabric took place:

Date		Fabric in metres
2 January	Balance @ €15 per metre	236
3 January	Issued to production	188
4 January	Delivery of inventory at €15.50 per metre	300
6 January	Issued to production	198

What was the value of the closing inventory of the fabric, assuming that the company adopts the AVCO convention of inventory valuation (to the nearest €)?

Peasnell & Peabody use a standard component in their production of office machinery. During the first week in September 2010, the following deliveries into inventory and transfers to production of the component took place:

Date		No. of components
1 September	Balance @ €15 per component	236
2 September	Issued to production	188
4 September	Delivery of inventory at €15.50 per component	300
6 September	Issued to production	198

What was the total value of the inventory of the component issued to production in the first week in September 2010? Assume that Peasnell & Peabody use the first in, first out valuation convention.

Hussain and Hak Productions makes anti-theft devices for motor vehicles. The company uses a standard bolt fitting in many of its products. During the first week in February 2010, the following deliveries into inventory and transfers to production of the fitting took place:

Date		No. of fittings
1 February	Balance @ €15 per fitting	236
2 February	Issued to production	188
4 February	Delivery of inventory at €15.50 per fitting	300
6 February	Issued to production	198

What is the value of closing inventory of the component at the end of the first week in February 2010? Assume that Hussain and Hak Productions adopts the last in first out convention of inventory valuation.

Hanley Trowbridge allocates direct labour and materials costs to specific jobs. Job No. 1387 has been undertaken to produce 950 units of product. The following materials and labour have been booked to the job:

Material ZYX: 330 kg at €25.35 per kilo
Direct labour Grade 6: 150 hours
Direct labour Grade 7: 40.5 hours

In addition, a royalty of €2.50 per unit is payable to the product designer.

Grade 6 labour costs €7.15 per hour, whereas Grade 7 costs €8.30 per hour.

What is the prime cost per unit of product (to nearest ¢)?

BDA Fabrications has three stages in its production process: machining, painting and finishing. Each of these stages is treated as a cost centre. The company employs two production supervisors. One spends her time entirely in the machining department, whereas the other divides his time equally between the three departments.

Which one of the following statements is correct?

The process of identifying the indirect production overhead of supervisors’ salaries with the individual cost centres is known as cost:

Hershall and Briggs incurred the following labour costs in respect of its production process in the year ended 31 March 2010:

	€
Direct labour costs	131 000
Supervisory labour costs	26 820
Factory cleaners' wages	18 600

The production process is split into two cost centres: machining and finishing. One-third of the supervisory labour time is spent in the finishing department with the balance spent in machining. The finishing process is messy and 60% of the cleaners’ hours are spent in this department. €101 000 of direct labour costs are incurred in the machining department and the remainder in the finishing department.

What is the total amount of indirect labour cost allocated to the machining cost centre?

The management accountant of Hepscott Iqbal is currently considering the most appropriate basis for apportioning the company’s indirect production overheads between its three principal production cost centres. Which one of the following is the most appropriate basis for apportioning the costs of running the factory canteen?

Blisworth & Bexhill produces a vacuum cleaner (its only product) that goes through three departments: moulding, assembly and finishing. The company’s total production overheads for the 2011 financial year are budgeted to be €1 860 420. Normally, the company apportions all its production overheads to the three departments in a 60:20:20 split (moulding: assembly: finishing) based on factory floor area. In order to make the information more useful, the company’s management accountant has suggested that canteen and supervision overheads (which amount to €308 560 of the total overhead of €1 860 420) should be apportioned according to the number of direct labour employees. Moulding employs 16 people, assembly eight, and finishing four (total = 28).

If the proposed method of apportionment is adopted by what percentage will the finishing department’s overhead be reduced, compared to the normal apportionment method (to one decimal place)?

Hill and Breedon has three departments in its production facility, each of which constitutes a cost centre. Production overheads in total are as follow:

	€	Basis of apportionment
Rent, rates, insurance and sundry costs	630 000	Floor area
Depreciation of machinery value	98 800	Floor area
Supervision and other indirect labour	726 000	No. of employees

Further relevant details are as follow:

	Machining	Assembly	Painting
Floor area (sq metres)	6000	5000	4000
Machinery net book value	€308 000	€118 000	€68 000
No. of staff	28	11	7

How much production overhead will be apportioned to the assembly department (to the nearest €)?

The management accountant of Sutton Heath Engineering is currently apportioning production machinery overheads amongst the company’s various cost centres.

During 2009 the cutting department made 22 service engineer call outs, out of the total of 43 for the factory as a whole. The total cost of all such call outs was €72 600. Factory machinery depreciation in total was €243 740. The cutting department’s machinery at net book value constitutes 37% of the total.

Service costs are apportioned on the basis of numbers of call outs, and machinery depreciation is apportioned on the basis of net book value.

What is the total of production machinery overheads to be apportioned to the cutting department (to the nearest €)?

Which one of the following statements is correct?

Overhead absorption is a way of:

Which one of the following statements is correct?

In order to calculate a total production cost per unit, production overhead absorbed by each unit is added to:

Which one of the following methods is not a valid approach to calculating overhead absorption rates?

Slimm Parsons manufactures components for boat engines. The company’s fabrications cost centre uses two grades of direct labour: grade X and grade Y. Grade X is to be paid at €8.20 per hour, and grade Y at €7.30 per hour. The budget for the 2011 financial year requires 15 000 hours of grade X labour and 20 000 hours of grade Y labour.

The apportionment of production overheads to the fabrications cost centre is budgeted at €883 000.

What is the overhead absorption rate for the fabrications department for 2011 financial year, based on direct labour hours (to 1 decimal place)?

Narwhinder Design Fabrications produces a single product. The company’s management accountant has budgeted the following totals in respect of the 2011 financial year:

	€
Direct materials	683 850
Direct labour	552 400
Production overheads	888 700
Selling and administrative overheads	302 450

What is the estimated overhead absorption rate for 2011, based on units of production (to the nearest cent)?

Nagri Machine Productions produces a single product. The company’s management accountant has budgeted the following totals in respect of the 2010 financial year:

	€
Direct materials	683 850
Direct labour	552 400
Direct expenses	92 000
Production overheads	888 700
Selling and administrative overheads	302 450

Machine hours for the year are estimated at 863 000.

What is the estimated overhead absorption rate for 2010, based on machine hours (to the nearest cent)?

In which of the following service activities is it likely to be worthwhile to undertake the allocation of overheads?

Which one of the following statements is correct?

Surveys of the usage of cost and management accounting techniques tend to show that:

Which one of the following statements is correct?

The National Health Service in the UK:

Which one of the following statements is correct?

Value-for-money considerations: