ACCA AK Management Accounting (MA) Costing

Question 1

A company produces a single product.
Fixed production overheads for the period are £120,000 and budgeted output is 40,000 units.
Actual output is 38,000 units.
What is the fixed overhead volume variance under absorption costing?

Accepted Answer

£6,000 adverse

Answer

£6,000 favourable

Answer

£3,000 adverse

Answer

£3,000 favourable

Question 2

Which of the following is a direct cost of producing a table?

Accepted Answer

Wood used in the table

Answer

Factory rent

Answer

Salary of the factory supervisor

Answer

Depreciation of factory machinery

Question 3

Under marginal costing, how are fixed production overheads treated?

Accepted Answer

Treated as a period cost and charged in full to the income statement

Answer

Allocated to each unit of production

Answer

Carried forward as part of closing inventory

Answer

Capitalised on the statement of financial position

Question 4

A product passes through two processes. The output of Process 1 becomes the input of Process 2. This is an example of which costing method?

Accepted Answer

Process costing

Answer

Job costing

Answer

Batch costing

Answer

Contract costing

Question 5

In absorption costing, if actual production exceeds budgeted production, what happens to fixed overheads?

Accepted Answer

They are over-absorbed

Answer

They are under-absorbed

Answer

They remain the same as budgeted

Answer

They are excluded from the cost card

Question 6

What is the equivalent unit concept used for in process costing?

Accepted Answer

To convert partly completed units into an equivalent number of fully completed units for cost allocation

Answer

To calculate the selling price of finished goods

Answer

To determine the reorder level of raw materials

Answer

To allocate selling and distribution costs to products