1. Which is an example of direct cost?
A Electricity expenses of the distribution department
B Production manager salary
C Wages paid to machine operator
D None of the above(5 marks)
2. A firm would operate a job costing system where:
A There is a continuous flow of production
B Work is carried out to specific customer requirements
C There are very few fixed overheads
D All output is identicaland mass produced(5 marks)
3. Cost centres are:
A Units of output or service for which costs are ascertained
B Functions or locations for which costs are ascertained
C A segment of the organisation for which budgets are prepared
D Amounts of expenditure attributable to various activities(5 marks) Total (15 marks)
SECTION B -Attempt ALL questions in this section
4. You are given the following data for the coming year of a football factory: Fixed expenses £50,000 Variable expenses per unit£45 Selling price per unit£75 Required:
a. Draw a break-evenchart showing the break-even point. (10marks)
b. Whittier plans to sell 1,000 mowers at £450 each in the coming year. Whittier has unit variable cost of £325 and fixed cost of £45,000. Required: -Calculated break even in units. (15 marks)
c. What are the benefits and limitations of a football factory developing a budget for decision making? (30marks) Total (55marks)
5: The following trial balance has been extracted by the book keeper Scott Brown at 31st December 2020Adjustments: 1. Stock at 31 December 2020was valued at £16,280 2. Outstanding wages and salaries are £2000. 3. Prepaid advertisement expenses are £500. 4. Bad and doubtful debts are £700
