快速查题-ACCA英国注册会计师试题

 Blunt is considering a new project but is unsure how much overhead to include in the calculations to help him decide whether or not to proceed. Existing fixed overheads are absorbed at the rate of $8 per hour worked.  Blunt is certain that the project will involve an incremental 500 labour hours.  

The project will involve extra machine running costs and these variable overheads cost him $4 per hour. The number of extra machine hours is expected to be 450 hours. The difference between this figure and the 500 labour hours above is expected idle time.  

The project will require a little more temporary space that can be rented at a fixed cost of $1,200 for the period of hire. This overhead is not included in the fixed overhead absorption rate above. 

What is the overhead to be charged against the project decision? 

Cleverclogs is short of labour for a new one-off project needing 600 hours of labour and has choices as to where to source this.  He could hire new people temporarily from an agency at a cost of $9 per hour.  Alternatively he could recruit new temporary staff at a fixed cost of advertising of $1,200 but then only pay $6 per hour for the time.  He could also redirect some staff from existing work who are currently paid $7 per hour and who make sandals that generate a contribution of $3 per hour after all variable costs. Sandals are a good selling product and Cleverclogs will lose the production and the related sales whilst staff is working on the new one-off project. 

What is the relevant cash flow? 

Drippy is producing a list of relevant cash flows regarding a decision she has to make. She is considering launching a new type of USB memory stick that guarantees better protection to the host computer.    

Drippy manages many existing products and has a standing arrangement with a technology magazine for advertising space entitling her to advertise each month.  The contract has just been signed and covers the next twelve months.  Payment is made in the month following an advert appearing.  Drippy is going to use the magazine to advertise her exciting new USB stick. 

Is the cost of the advertising space best described as a: 

 X plc intends to use relevant costs as the basis of the selling price for a special order: the printing of a brochure. The brochure requires a particular type of paper that is not regularly used by X plc although a limited amount is in X plc’s inventory which was left over from a previous job. The cost when X plc bought this paper last year was $15 per ream and there are 100 reams in inventory. The brochure requires 250 reams. The current market price of the paper is $26 per ream, and the resale value of the paper in inventory is $10 per ream. 

What is the relevant cost of the paper to be used in printing the brochure? 

 Jorioz Co makes joint products X and Y. $120,000 joint processing costs are incurred. 

At the split-off point, 10,000 units of X and 9,000 units of Y are produced, with selling prices of $1.20 for X and $1.50 for Y. 

The units of X could be processed further to make 8,000 units of product Z. The extra costs incurred in this process would be fixed costs of $1,600 and variable costs of $0.50 per unit of input. 

The selling price of Z would be $2.25. 

What would be the outcome if product X is further processed? 

In a decision about whether or not to sell a joint product at the split-off point or after further processing, joint costs are relevant. 

 What are the relevant costs in a make or buy decision? 

A company wants to decide whether to make its materials in-house or whether to sub-contract production to an external supplier. In the past it has made four materials in-house, but demand in the next year will exceed in-house production capacity of 8,000 units. All four materials are made on the same machines and require the same machine time per unit: machine time is the limiting production factor. The following information is available. 

If a decision is made solely on the basis of short-term cost considerations, what materials should the company purchase externally? 

Jetson Co produces three products:  

Labour is restricted to 120,000 hours. In order to meet demand, Jetson is considering using a subcontractor to produce the products that cannot be produced in-house due to the restriction on labour hours. The subcontractor has prepared the following quote:  

George = $55 

Elroy = $66 

Jane = $82 

Calculate the number of units of George that will be manufactured in-house. 

 Your company regularly uses material X and currently has in inventory 500 kg for which it paid $1,500 two weeks ago. If this were to be sold as raw material, it could be sold today for $2.00 per kg. You are aware that the material can be bought on the open market for $3.25 per kg, but it must be purchased in quantities of 1,000 kg. 

What is the relevant cost of 600 kg needed to be used in a job for a customer?