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BA2 Exam Dumps : Fundamentals of management accounting

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Fundamentals of management accounting Questions and Answers

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Question 1

The following data are available for a company that produces and sells a single product.

The company’s opening finished goods inventory was 2,500 units.

The fixed overhead absorption rate is $8.00 per unit.

The profit calculated using marginal costing is $16,000.

The profit calculated using absorption costing and valuing its inventory at standard cost is $22,400.

The company’s closing finished goods inventory is:

Options:

A.

3,300 units

B.

1,700 units

C.

3,900 units

D.

8,900 units

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Question 2

Which of the following is the LEAST appropriate basis on which to apportion the insurance costs of plant and machinery:

Options:

A.

Machine hours

B.

Net book value

C.

Original cost

D.

Replacement cost

Question 3

Over absorption of overhead will always arise when:

Options:

A.

actual overhead incurred is lower than budgeted overhead

B.

actual overhead incurred is lower than absorbed overhead

C.

absorbed overhead is lower than actual overhead incurred

D.

absorbed overhead is higher than budgeted overhead

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