Managerial accounting
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Q1. The table contains information provided by a business.
actual direct labour hours worked 18 000
actual overhead expenditure $504 000
budgeted direct labour hours 17 000
budgeted overhead expenditure $510 000
What is the amount of the overhead over / under recovery?
A $6000 over-recovered
B $6000 under-recovered
C $30 000 over-recovered
D $36 000 over-recovered
Q2. The following information relates to the budgeted and actual sale of a product.
budget actual
sales volume in units 40 000 36 000
contribution per unit $2 $2.50
fixed costs (total) $30 000 $30 000
What change in the break-even point has been caused by actual sales being different from
budget?
A 20 % better
B 20 % worse
C 80 % better
D 80 % worse
Q3. A business produces the following figures.
actual
production 210 units
quantity of direct material 483 tonnes
total cost of direct materials $1 449 000
A standard unit uses 2.25 tonnes of material at a price of $3100 per tonne.
What are the usage and price variances?
Usage Price
$ $
A 32 550 adv 48 300 fav
B 32 550 fav 48 300 adv
C 176 700 adv 48 300 fav
D 176 700 fav 48 300 adv
Q4. The following information about the sale of a product is given.
budget actual
sales volume in units 1 000 900
sales revenue $10 000 $9 900
Which of the following is true?
Sales price variance Sales volume Variance
A 100 adverse -
B - 100 adverse
C 900 favourable 1000 adverse
D 1000 adverse 900 favourable
Q5. Discounting methods have been used to evaluate an investment project over a three year life.
The project will produce annual net inflows of $2 m.
$500 000 of the initial investment can be recovered at the end of the third year.
Discount factors at 10 % are:
year factor
1 0.91
2 0.83
3 0.75
What is the present value of project cash inflows?
A $4.98 m B $5.36 m C $5.48 m D $6.38 m
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The solution answers the question below in great detail. The expert examines managerial accounting for overhead over/under recovery.
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Hello,
Please find my response below. I have done my best to answer your questions to the best of my ability. I hope you find the response excellent. Thanks and good luck.
Answer 1: Budgeted Overhead - Actual Overhead = 510,000 - 504,000 = 6,000. Thus we did better than the budgeted ...
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