ACCA F5 Certification Exam: Trivia Quiz

45 Questions | Total Attempts: 430

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ACCA F5 Certification Exam: Trivia Quiz


Questions and Answers
  • 1. 
    The following costs have arisen in relation to the production of a product:  
    1. (i) Planning and concept design costs
    2. (ii) Testing costs
    3. (iii) Production costs
    4. (iv) Distribution and customer service costs
     
    1. In calculating the life cycle costs of a product, which of the above items would be included? 
    • A. 

      ​​​​​(iii) only

    • B. 

      (i), (ii) and (iii) only

    • C. 

      (i), (ii) and (iv) only

    • D. 

      All of the above

  • 2. 
    In which of the following ways might financial returns be improved over the life cycle of a product?
    1. (1) Maximising the breakeven time
    2. (2) Minimising the time to market
    3. (3) Minimising the length of the life cycle
    • A. 

      1 and 2 only

    • B. 

      1 and 3 only

    • C. 

      2 only

    • D. 

      2 and 3 only

  • 3. 
    One of the products manufactured by a company is Product X, which sells for $40 per unit and has a material cost of $10 per unit and a direct labour cost of $7 per unit. The total direct labour budget for the year is 50,000 hours of labour time at a cost of $12 per hour. Factory overheads are $2,920,000 per year.
    1. The company is considering the introduction of a system of throughput accounting. It has identified that machine time as the bottleneck in production. Product X needs 0.01 hours of machine time per unit produced. The maximum capacity for machine time is 4,000 hours per year.
     
    1. What is the throughput accounting ratio for Product X?
     
    • A. 

      $3,41

    • B. 

      $2.80

    • C. 

      $2.10

    • D. 

      $1.90

  • 4. 
    The following statements have been made about material flow cost accounting.
    1. (1) In material flow cost accounting, waste is treated as a negative product and given a cost.
    2. (2) Material flow cost accounting should encourage management to focus on ways of achieving the same amount of finished output with less material input.
     
    1. Which of the above statements is/are true?
    • A. 

      1 only

    • B. 

      2 only

    • C. 

      Neither 1 nor 2

    • D. 

      Both 1 and 2

  • 5. 
    Which of the following statements about activity based costing are true?  
    • A. 

      The cost driver for quality inspection is likely to be batch size.

    • B. 

      The cost driver for materials handling and despatch costs is likely to be the number of orders handled.

    • C. 

      In the short run, all the overhead costs for an activity vary with the amount of the cost driver for the activity.

    • D. 

      A cost driver is an activity based cost.

  • 6. 
    The following information relates to the expected cost of a new product over its expected three-year life. 
    • A. 

      $35.95

    • B. 

      $46.25

    • C. 

      $48.00

    • D. 

      $50.95

  • 7. 
    The following statements have been made about throughput accounting.
    1. (1) Inventory has no value and should be valued at $0.
    2. (2) Efficiency is maximised by utilising direct labour time and machine time to full capacity.
    3.  
    4. Which of the above statements is/are true?
    • A. 

      1 only

    • B. 

      2 only

    • C. 

      Neither 1 nor 2

    • D. 

      Both 1 and 2

  • 8. 
    In environmental costing, the future cost of cleaning up operations for a product or activity may be classified as which of the following?
    • A. 

      Carbon footprint

    • B. 

      Contingent cost

    • C. 

      Hidden cost

    • D. 

      Relationship cost

  • 9. 
    The following statements have been made about throughput accounting.
    1. (1) Direct labour should always be treated as a factory cost when measuring throughput.
    2. (2) If machine time is the bottleneck resource, there is no value in taking measures to improve direct labour efficiency.
    3.  
    4. Which of the above statements is/are true?
    • A. 

      1 only

    • B. 

      2 only

    • C. 

      Neither 1 nor 2

    • D. 

      Both 1 and 2

  • 10. 
    The following statements have been made about traditional absorption costing and activity based costing.
    1. (1) Traditional absorption costing may be used to set prices for products, but activity based costing may not.
    2. (2) Traditional absorption costing tends to allocate too many overhead costs to low volume products and not enough overheads to high-volume products.
    3. (3) Implementing ABC is expensive and time consuming
    4.  
    5. Which of the above statements is/are true?
    • A. 

      1 only

    • B. 

      2 only

    • C. 

      3 only

    • D. 

      1 and 2 only

  • 11. 
    The following data refers to a soft drinks manufacturing company that passes its product through four processes and is currently operating at optimal capacity.
    • A. 

      Washing

    • B. 

      Filling

    • C. 

      Capping

    • D. 

      Labelling

  • 12. 
    In which of the following ways might financial returns be improved over the life cycle of a product?
    1. 1. Maximising the time to market
    2. 2. Minimising the breakeven time
    3. 3. Maximising the length of the life cycle
    • A. 

      (1) and (2) only

    • B. 

      (1) and (3) only

    • C. 

      (2) only

    • D. 

      (2) and (3) only

  • 13. 
    In material flow cost accounting (MFCA), input manufacturing costs are categorised into material costs, waste treatment costs and which of the following?
    • A. 

      System costs and energy costs

    • B. 

      Positive product costs

    • C. 

      Negative product costs

    • D. 

      Positive products costs and negative product costs

  • 14. 
    In the theory of constraints and throughput accounting, which of the following methods may be used to elevate the performance of a binding constraint?
    1. (Method 1) Acquire more of the resource that is the binding constraint
    2. (Method 2) Improve the efficiency of usage of the resource that is the binding constraint
    • A. 

      Method 1 only

    • B. 

      Method 2 only

    • C. 

      Method 1 and Method 2

    • D. 

      Neither method would be effective

  • 15. 
    ABC Company uses throughput accounting. Machine time is the current binding constraint on production output, and management are looking for ways to increase the throughput accounting (TA) ratio for a product that the machine is used to manufacture.
    1. Which of the following will have NO effect on the TA ratio?
    • A. 

      Increasing the selling price of the product

    • B. 

      Obtaining a lower purchase price for materials for the product

    • C. 

      Reducing factory costs

    • D. 

      Reducing the machine time per unit to make the product

  • 16. 
    The following statements have been made about environmental management accounting.
    1. (1). A system of environmental management accounting provides environmental information for internal use by management, but not for external reporting.
    2. (2). Environmental management accounting systems typically make use of life cycle costing.
    • A. 

      Statement 1 is true

    • B. 

      Statement 2 is false

    • C. 

      Statement 2 is true

    • D. 

      Statement 2 is false

  • 17. 
    • A. 

      A principle of throughput accounting is that a buffer inventory should be built up for output from the bottleneck resource.

    • B. 

      Unless output capacity is greater than sales demand, there will always be a binding constraint.

    • C. 

      The production capacity of a bottleneck resource should determine the production schedule for the organisation as a whole.

    • D. 

      Idle time should be avoided in areas of production that are not a bottleneck resource.

  • 18. 
    • A. 

      Target costing is better suited to assembly orientated industries than service industries that have a large fixed cost base.

    • B. 

      Costs may be reduced in target costing by removing product features that do not add value.

    • C. 

      A target cost gap is the difference between the target cost for a product and its projected cost.

    • D. 

      Products should be discontinued if there is a target cost gap.

  • 19. 
    Which two of the following statements about activity based costing are true?
    • A. 

      Implementation of ABC is unlikely to be cost effective when variable production costs are a low proportion of total production costs.

    • B. 

      In a system of ABC, for costs that vary with production levels, the most suitable cost driver is likely to be direct labour hours or machine hours

    • C. 

      Activity based costs are the same as relevant costs for the purpose of short-run decision making.

    • D. 

      Activity based costing is a form of absorption costing.

  • 20. 
    Which of the following statements about target costing true?
    1. (1). A risk with target costing is that cost reductions may affect the perceived value of the product.
    2. (2). An effective way of reducing the projected cost of a new product is to simplify the design.
    3. (3). The value of target costing depends on having reliable estimates of sales demand.
    4. (4). Target costing may be applied to services that are provided free of charge to customers, such as costs of call centre handling.
    • A. 

      None of the above

    • B. 

      1 and 2 Only

    • C. 

      1, 2 and 3 Only

    • D. 

      All Statements are true

  • 21. 
    Which two of the following statements about life cycle costing are true?
    • A. 

      A product is usually most profitable during the growth phase of its life cycle.

    • B. 

      Life cycle costing is useful for deciding the selling price for a product.

    • C. 

      An important use of life cycle costing is to decide whether to go ahead with the development of a new product.

    • D. 

      Life cycle costing encourages management to find a suitable balance between investment costs and operating expenses.

  • 22. 
    The selling price of Product X is set at $550 for each unit and sales for the coming year are expected to be 800 units. A return of 30% on the investment of $500,000 in Product X will be required in the coming year.
    1. What is the target cost for each unit of Product X? - [Blank]
  • 23. 
    Which of the following statements about environmental cost accounting are true?
    • A. 

      The majority of environmental costs are already captured within a typical organisation's accounting system. The difficulty lies in identifying them

    • B. 

      Input/output analysis divides material flows within an organisation into three categories: material flows; system flows; and delivery and disposal flows

  • 24. 
    Budget information relating to a company that manufactures four products is as follows. [Blank] Units
  • 25. 
    The following estimates have been produced for a new product with an expected life of four years. [Blank]