The overhead absorption rate for product T is $4 per machine hour. Each unit of T requires 3 machine hours. Inventories of product T last period were:
Units
Opening inventory 2,400
Closing inventory 2,700
Compared with the marginal costing profit for the period,the absorption costing profit for product T will be which of the following?
Difference in profit = 2，000 units inventory reduction x fixed overhead absorption rate per unit
Difference in profit =change in inventory level x fixed overhead per unit =(2,400 - 2,700) x ($4 x 3)=$3,600
The absorption profit will be higher because inventories have increased, and fixed overheads have been carried forward in inventories.
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Which of the following statements about management accounting information is/are true?
(i) They must be stated in purely monetary terms.
(ii) Limited companies must, by law, prepare management accounts.
(iii) They serve as a future planning tool and are not used as an historical record.
Which of the following statements is/are correct?
(i) A management control system is a term used to describe the hardware and software used to drive a database system which produces information outputs that are easily assimilated by management.
(ii) An objective is a course of action that an organisation might pursue in order to achieve its strategy.
(iii) Information is data that has been processed into a form meaningful to the recipient.
Good information should have certain qualities. Which of the following are qualities of good information?(i) Complete(ii) Extensive(iii) Relevant(iv) Accurate
Monthly variance reports are an example of which one of the following types of management information?
Which of the following statements is/are correct?
(i) Information for decision-making should incorporate uncertainty in some way
(ii) The data used to prepare financial accounts and management accounts are the
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