ACCA F2: Management Accounting Test! Trivia Quiz

1. The cost of producing information should be greater than the value of the benefits of that information to management.

True

False

The statement suggests that the cost of producing information should be greater than the value of the benefits of that information to management. However, this is not true. In an efficient and effective management system, the value of the benefits derived from the information should outweigh the cost of producing it. This ensures that management is making informed decisions based on valuable information, leading to better outcomes for the organization. Therefore, the correct answer is False.

Explanation

The statement suggests that the cost of producing information should be greater than the value of the benefits of that information to management. However, this is not true. In an efficient and effective management system, the value of the benefits derived from the information should outweigh the cost of producing it. This ensures that management is making informed decisions based on valuable information, leading to better outcomes for the organization. Therefore, the correct answer is False.

2. A manufacturing organisation incurs costs relating to the following:

Commision payable to salespersons.
Inspecting all products.
Packing the products at the end of the manufacturing process prior to moving them to the warehouse.

Which of these costs are classified as production costs?

1 and 2 only

1 and 3 only

2 and 3 only

1, 2 and 3

The costs of inspecting all products and packing the products at the end of the manufacturing process prior to moving them to the warehouse are classified as production costs. Commission payable to salespersons is not directly related to the manufacturing process and is therefore not considered a production cost.

Explanation

The costs of inspecting all products and packing the products at the end of the manufacturing process prior to moving them to the warehouse are classified as production costs. Commission payable to salespersons is not directly related to the manufacturing process and is therefore not considered a production cost.

3. It was decided to take a sample by selecting the 12th item and thereafter every 20th item. This is an example of which type of sampling?

Random Sampling

Systematic Sampling

Stratified Sampling

Cluster Sampling

Systematic sampling is a type of sampling where the elements are selected at regular intervals from a population. In this case, the sample was taken by selecting the 12th item and then every 20th item thereafter. This method ensures that every 12th item and every 20th item after that is included in the sample, providing a systematic and structured approach to sampling. Therefore, the correct answer is systematic sampling.

Explanation

Systematic sampling is a type of sampling where the elements are selected at regular intervals from a population. In this case, the sample was taken by selecting the 12th item and then every 20th item thereafter. This method ensures that every 12th item and every 20th item after that is included in the sample, providing a systematic and structured approach to sampling. Therefore, the correct answer is systematic sampling.

4. Which of the following statements are true?

The main users of financial accouting information are external to the organisation.
Cost accounting is that part of financial accounting which records the cash received and payments made by an organisation.

Statements 1 and 2

Only statement 1

Only statement 2

The correct answer is "Only statement 1." This means that only statement 1 is true. Statement 1 states that the main users of financial accounting information are external to the organization. This is true because financial accounting information is primarily used by investors, creditors, and other external stakeholders to assess the financial performance and position of the organization. Statement 2, on the other hand, is false. Cost accounting is a separate branch of accounting that focuses on the measurement, analysis, and reporting of costs associated with producing goods or services within an organization. It does not specifically record cash received and payments made.

Explanation

The correct answer is "Only statement 1." This means that only statement 1 is true. Statement 1 states that the main users of financial accounting information are external to the organization. This is true because financial accounting information is primarily used by investors, creditors, and other external stakeholders to assess the financial performance and position of the organization. Statement 2, on the other hand, is false. Cost accounting is a separate branch of accounting that focuses on the measurement, analysis, and reporting of costs associated with producing goods or services within an organization. It does not specifically record cash received and payments made.

5. Which one of the following should be classified as indirect labour?

Assembly workers on a car production line

Brick layers in a house building company

Machinists in a factory producing clothes

Forklift truck drivers in the stores of an engineering company

Indirect labor refers to workers who do not directly contribute to the production process but provide support or services to the production line. In this case, forklift truck drivers in the stores of an engineering company can be classified as indirect labor because they are not directly involved in the production of goods but rather provide support by moving materials and products within the company's stores.

Explanation

Indirect labor refers to workers who do not directly contribute to the production process but provide support or services to the production line. In this case, forklift truck drivers in the stores of an engineering company can be classified as indirect labor because they are not directly involved in the production of goods but rather provide support by moving materials and products within the company's stores.

6. Data is information that has been processed in such a way as to be meaningful to its recipients.

True

False

The explanation for the given correct answer is that data is not necessarily processed in order to be meaningful to its recipients. Data refers to raw facts, figures, or symbols that are unprocessed and have no inherent meaning. It is only when data is organized, analyzed, and interpreted that it becomes information, which is meaningful to its recipients. Therefore, the statement that data has been processed to be meaningful is false.

Explanation

The explanation for the given correct answer is that data is not necessarily processed in order to be meaningful to its recipients. Data refers to raw facts, figures, or symbols that are unprocessed and have no inherent meaning. It is only when data is organized, analyzed, and interpreted that it becomes information, which is meaningful to its recipients. Therefore, the statement that data has been processed to be meaningful is false.

7. In an organisation manufacturing a number of different products in one large factory, the rent of that factory is an example of a direct expense when costing a product.

True

False

The rent of the factory is not considered a direct expense when costing a product because it is not directly attributable to the production of a specific product. Direct expenses are costs that can be directly traced to a specific product, such as raw materials or direct labor. Rent, on the other hand, is an indirect expense that is incurred for the overall operation of the factory and is shared among all the products manufactured in the facility. Therefore, the statement is false.

Explanation

The rent of the factory is not considered a direct expense when costing a product because it is not directly attributable to the production of a specific product. Direct expenses are costs that can be directly traced to a specific product, such as raw materials or direct labor. Rent, on the other hand, is an indirect expense that is incurred for the overall operation of the factory and is shared among all the products manufactured in the facility. Therefore, the statement is false.

8. Which of the following are indirect costs?

The depreciation of maintenance equipment
The overtime premium incurred at the specific request of a customer
The hire of a tool for a specific job

1 only

1 and 2 only

2 and 3 only

All of them

Depreciation is an indirect cost because it does not relate directly to the number of units produced .

2 and 3 can be traced directly to specific cost units therefore they are direct expenses.

Explanation

Depreciation is an indirect cost because it does not relate directly to the number of units produced .

2 and 3 can be traced directly to specific cost units therefore they are direct expenses.

9. Which of the following statements about stratified sampling is true?

The sample will not be representative

The structure of the sample will not reflect that of the population

Knowledge is needed of each item in the population

The sample is chosen entirely at random

Stratified sampling involves dividing the population into subgroups or strata based on certain characteristics and then selecting a proportional number of individuals from each subgroup to create a representative sample. To accomplish this, knowledge of each item in the population is necessary in order to accurately classify them into the appropriate strata. This ensures that the sample reflects the structure of the population and increases the representativeness of the sample. Therefore, the statement "Knowledge is needed of each item in the population" is true for stratified sampling.

Explanation

Stratified sampling involves dividing the population into subgroups or strata based on certain characteristics and then selecting a proportional number of individuals from each subgroup to create a representative sample. To accomplish this, knowledge of each item in the population is necessary in order to accurately classify them into the appropriate strata. This ensures that the sample reflects the structure of the population and increases the representativeness of the sample. Therefore, the statement "Knowledge is needed of each item in the population" is true for stratified sampling.

10. A semi-variable cost is one that, in the short term, remains the same over a given range of activity but beyond that it increases and then remains constant at a higher level of activity

True

False

This is a stepped fixed cost.

Explanation

This is a stepped fixed cost.

11. A sample of people is taken with the same proportion of individuals in separate age bands as in the population as a whole. This is an example of which type of sampling?

Random Sampling

Systematic Sampling

Stratified Sampling

Cluster Sampling

Stratified sampling involves dividing the population into distinct groups or strata based on certain characteristics, such as age bands in this case. The sample is then taken in such a way that each stratum is represented in proportion to its size in the population. Therefore, the given scenario, where a sample is taken with the same proportion of individuals in separate age bands as in the population as a whole, is an example of stratified sampling.

Explanation

Stratified sampling involves dividing the population into distinct groups or strata based on certain characteristics, such as age bands in this case. The sample is then taken in such a way that each stratum is represented in proportion to its size in the population. Therefore, the given scenario, where a sample is taken with the same proportion of individuals in separate age bands as in the population as a whole, is an example of stratified sampling.

12. An prganisation operates a peicework system of remuneration, but also guarantees its employees 80% of a time-based rate of pay which is based on $20 per hour for an eight hour working day. Three minutes is the standard time allowed per unit of output. Piecework is paid at the rate of $18 per standard hour. If an employee produces 200 units in eight hours on a particular day, what is the employee's gross pay for that day?

$128

$144

$160

$180

200 units x (3 / 60) x 18 = $180

Explanation

200 units x (3 / 60) x 18 = $180

13. What would be the most appropriate cost unit for a cake manufacturer? Cost per:

Cake

Batch

Kg

Production Run

Cost per cup cake would be very small and therefore not an appropriate cost unit.

Explanation

Cost per cup cake would be very small and therefore not an appropriate cost unit.

14. Which of the following are examples of secondary data?

A count of number of invoices that we are issuing each week
The average wage of the population taken form government census results
The average paid to our employees
The sales for the month as reported on a website

1 and 2

3 and 4

1 and 3

2 and 4

The count of number of invoices that we are issuing each week and the average paid to our employees are examples of secondary data. Secondary data refers to data that has already been collected by someone else for a different purpose. In this case, the count of invoices and the average paid to employees are data that has been collected by the organization itself and can be used for analysis or decision-making. On the other hand, the average wage of the population taken from government census results and the sales for the month as reported on a website are examples of primary data, as they are collected specifically for the purpose of the census or sales reporting.

Explanation

The count of number of invoices that we are issuing each week and the average paid to our employees are examples of secondary data. Secondary data refers to data that has already been collected by someone else for a different purpose. In this case, the count of invoices and the average paid to employees are data that has been collected by the organization itself and can be used for analysis or decision-making. On the other hand, the average wage of the population taken from government census results and the sales for the month as reported on a website are examples of primary data, as they are collected specifically for the purpose of the census or sales reporting.