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• 1.
A theatre booking agency has commissioned a famous pop band to perform a one-off concert for 12,500. The price of the admission is 35; tickets can only be purchased from approved retail outlets, which receive a 5% commission on the selling price per ticket sold. The hire fee for the venue is 2,000 plus 1,25 per visitor. The other fixed costs are 5,500. How many tickets does the agency need to sell to break even?
• A.

563

• B.

593

• C.

602

• D.

625

• 2.
Business A has estimated its total production for the coming period at 17,500 units. The fixed costs are 1,400,000 and the budgeted variable costs for this period are 700,000. The normal volume per period is 20,000 units. The full production cost per unit and the expected volume variance are:
• A.

110 and 175,000 loss

• B.

110 and 200,000 loss

• C.

120 and 175,000 loss

• D.

120 and 200,000 loss

• 3.
The unit cost of a product includes two direct labour hours at 90 euro. In a given period, the company manufactures 200 products, involving labour costs of 39,000 for 390 hours worked. In this period, which of the following applies to the direct labour costs?
• A.

900 favourable and 3,900 unfavourable

• B.

900 favourable and 4,000 unfavourable

• C.

1,000 favourable and 4,000 unfavourable

• D.

1,000 favourable and 3,900 unfavourable

• 4.
At 31 December 2009, a company's balance sheet shows 10,000 in merchandise, in the form of 1,000 units purchased on 31 December 2009 for 10 each. In 2010, the following transactions take place: 15-Feb   Sold   500 units at 15,00 18-Jun   Purchased 900 units at 8,00 03-Oct   Sold   300 units at 14,00 30-Dec   Purchased 600 units at 6,50               2010             02-Feb   Purchased 2,000 units at 6,50 08-Jun   Sold   2,700 units at 9,00 17-Sep   Purchased 1,000 units at 8,00 31-Dec   Sold    1,100 units at 10,50 The estimated net realizable value of the stock at 31 December is 6 euro per unit Under FIFO, the profit over 2010 is:
• A.

800

• B.

2,200

• C.

3,700

• D.

3,950

• 5.
A business is mass-producting product A. The total production costs in January were 120,000. Work started on 50,000 units and 45,000 units were completed. On 1 January, there was no opening inventory of partly finished goods: 60% of the closing inventory at 31 January can be considered complete. The costs per unit in January were:
• A.

2,40

• B.

2,50

• C.

2,55

• D.

2,67

• 6.
A construction firm spent 2 million on a project in 2010; the company is expected to spend a further 4 million and 2 million in 2011 and 2012, respectively. On completion in 2012 the company will receive the fixed price of 9 million. The construction comapny applies the percentage-of-completion method. What is the value of the work in progress entered on the balance sheet at 31 December 2010?
• A.

2,000,000

• B.

2,250,000

• C.

2,333,333

• D.

3,000,000

• 7.
An entrepreneur has budgeted 300,000 for raw materials, 200,000 for direct labour costs and 225,000 for indirect costs. A third of the indirect costs consist of indirect labour costs; the rest relates to raw material usage. For a particular order, the estimated costs are 150 in direct labour and 350 in raw materials. The cost of this order is:
• A.

706,25

• B.

731,25

• C.

750

• D.

775,50

• 8.
Company X sells a product for 29; its forecast profit this year is 1,000,000 at a turnover level of 7,250,000. The total variable costs have been budgeted at 2,250,000. The break-even sales volume is:
• A.

112,500 units

• B.

200,000 units

• C.

312,500 units

• D.

400,000 units

• 9.
A company has presented the following figures:     Balance sheet 31-Dec (x1000 euro)         2009 2010       2009 2010 Buildings   750 600   Share capital 100 80 Equipments   320 400   Premium reserve 300 100 Inventory   230 170   Retained earnings 870 870 Acc Receivable         Profit   15 0 Cash + cash equivalents 60 80   Acc Payable 70 200           Tax Payable 5 0                       1,360 1,250       1,360 1,250     Profit and Loss account                           Sales               15,000 Cost of goods sold           8,000   Deprecation             100   Other costs             6,880                                     14,980                   Profit before tax             20 Corporate tax               5                   Net tax               15 The cash flow from operating activities is:
• A.

-190,000

• B.

-70,000

• C.

+10,000

• D.

+220,000

• 10.
The inventory of trade goods at 1 January 2010 is 50,000. At 31 December 2010 the inventory is 80,000. In 2010, trade goods are sold for 400,000. The profit margin on the goods is 10% of the selling price. At 1 January the accounts payable are 30,000; at 31 December they are 10,000. Which amount is entered in the cash flow statement as 'payments to suppliers' using the direct method?
• A.

380,000

• B.

410,000

• C.

420,000

• D.

430,000

• 11.
A company has presented the following figures:     Balance sheet 31-Dec (x1000 euro)         2009 2010       2009 2010 Buildings   750 600   Share capital 100 80 Equipments   320 400   Premium reserve 300 100 Inventory   230 170   Retained earnings 870 870 Acc Receivable         Profit   15 0 Cash + cash equivalents 60 80   Acc Payable 70 200           Tax Payable 5 0                       1,360 1,250       1,360 1,250     Profit and Loss account                           Sales               15,000 Cost of goods sold           8,000   Deprecation             100   Other costs             6,880                                     14,980                   Profit before tax             20 Corporate tax               5                   Net tax               15 When using the indirect method, the total adjustment for the change in net working capital is:
• A.

-105,000

• B.

-20,000

• C.

+20,000

• D.

+220,000

• 12.
The trading company launched operations in 2009 with a total equity of 15,000. In 2009 and 2010, the following transactions took place: 2009           01-Jan Purchased 3,000 units at 5,00 09-May Sold       900 units at 7,50 12-Oct Purchased 1,900 units at 5,50 31-Dec Sold   1,900 units at 8,50             2010           02-Feb Purchased 2,000 units at 6,50 08-Jun Sold   2,700 units at 9,00 17-Sep Purchased 1,000 units at 8,00 31-Dec Sold   1,100 units at 10,50 Under WAC, inventory at 31 December 2009 is valued at:
• A.

14,665

• B.

14,875

• C.

15,925

• D.

16,225

• 13.
A London hotel has 75 rooms. The price per room is 150 a night (including a buffet breakfast). The variable costs (cleaning costs, laundry costs, etc.) are 30 per room night. The fixed costs for the coming year have been budgeted at: 1,150,000 for personnel costs, 275,000 for deprecation costs and 300,000 for other costs (excluding interest charges). The interest charges for the coming year are 165,000, requiring principal repayments of 180,000 How many room nights need to be booked for the coming year to achieve an after-tax profit (corporate tax = 35%) of 6,5% of the turnover?
• A.

17,687

• B.

18,572

• C.

18,714

• D.

20,286

• 14.
The budgeted weekly production of product A is 300 units. The standard labour costs are four hours per unit at an hourly cost of 36. The actual output is 250 units, and the average labour costs are 3 hours at 39 per hour. The unfavourable labour variance is:
• A.

3,600

• B.

3,000

• C.

2,700

• D.

2,250

• 15.
The trading company launched operations in 2009 with a total equity of 15,000. In 2009 and 2010, the following transactions took place: 2009           01-Jan Purchased 3,000 units at 5,00 09-May Sold       900 units at 7,50 12-Oct Purchased 1,900 units at 5,50 31-Dec Sold   1,900 units at 8,50             2010           02-Feb Purchased 2,000 units at 6,50 08-Jun Sold   2,700 units at 9,00 17-Sep Purchased 1,000 units at 8,00 31-Dec Sold   1,100 units at 10,50 Under FIFO, the total profit over 2009 is:
• A.

5,850

• B.

5,600

• C.

5,450

• D.

6,450

• 16.
The starting balance sheet of a company at 1 January 2010 is as follows:     Balance sheet at 1 January 2010 (in euros)                   Trade goods   150,000     Equity   220,000 Cash   70,000                               220,000         220,000 On 1 January 2010, 30,000 kg of goods are in stock. On 10 January the company is informed by its supplier that the purchase price per kg is increasing to 6 euro. On 15 January the company purchases 10,000 kg at 6 per kg. On 20 January the company sells 25,000 kg at 7,50 per kg. The operating costs in January ate 10,000. The company uses the replacement cost sytem. The profit in January is:
• A.

27,500

• B.

52,500

• C.

62,500

• D.

72,500

• 17.
A London hotel has 75 rooms. The price per room is 150 a night (including a buffet breakfast). The variable costs (cleaning costs, laundry costs, etc.) are 30 per room night. The fixed costs for the coming year have been budgeted at: 1,150,000 for personnel costs, 275,000 for deprecation costs and 300,000 for other costs (excluding interest charges). The interest charges for the coming year are 165,000, requiring principal repayments of 180,000 How many room nights need to be booked to reach the break-even point?
• A.

14,875

• B.

16,250

• C.

16,958

• D.

17,750

• 18.
A company has presented the following figures:     Balance sheet 31-Dec (x1000 euro)         2009 2010       2009 2010 Buildings   750 600   Share capital 100 80 Equipments   320 400   Premium reserve 300 100 Inventory   230 170   Retained earnings 870 870 Acc Receivable         Profit   15 0 Cash + cash equivalents 60 80   Acc Payable 70 200           Tax Payable 5 0                       1,360 1,250       1,360 1,250     Profit and Loss account                           Sales               15,000 Cost of goods sold           8,000   Deprecation             100   Other costs             6,880                                     14,980                   Profit before tax             20 Corporate tax               5                   Net tax               15 The cash flow from investing activities is:
• A.

-250,000

• B.

-150,000

• C.

+150,000

• D.

+250,000

• 19.
The trading company launched operations in 2009 with a total equity of 15,000. In 2009 and 2010, the following transactions took place: 2009           01-Jan Purchased 3,000 units at 5,00 09-May Sold       900 units at 7,50 12-Oct Purchased 1,900 units at 5,50 31-Dec Sold   1,900 units at 8,50             2010           02-Feb Purchased 2,000 units at 6,50 08-Jun Sold   2,700 units at 9,00 17-Sep Purchased 1,000 units at 8,00 31-Dec Sold   1,100 units at 10,50 Under the individual LIFO method, the total profit over 2010 is:
• A.

7,600

• B.

8,800

• C.

10,200

• D.

11,500

• 20.
The trading company launched operations in 2009 with a total equity of 15,000. In 2009 and 2010, the following transactions took place: 2009           01-Jan Purchased 3,000 units at 5,00 09-May Sold       900 units at 7,50 12-Oct Purchased 1,900 units at 5,50 31-Dec Sold   1,900 units at 8,50             2010           02-Feb Purchased 2,000 units at 6,50 08-Jun Sold   2,700 units at 9,00 17-Sep Purchased 1,000 units at 8,00 31-Dec Sold   1,100 units at 10,50 Under the individual LIFO method, inventory at 31 December 2010 is valued at:
• A.

12,100

• B.

12,900

• C.

13,700

• D.

14,500

• 21.
The standard raw material costs for the (mass) production of 100 identical units are 4 per kg. In week 12, 1,820 units were manufactured. The actual raw material costs were 11,960, resulting in a favourable price variance of 300. The actual quantity of raw materials used was:
• A.

2915 kg

• B.

2990 kg

• C.

3065 kg

• D.

3075 kg

• 22.
A trading company forecasts an annual turnover of 8,200,000. The contribution margin is estimated at 39% of turnover. All operating costs are fixed. The pre-tax profit is budgeted at 148,000. The break-even turnover (rounded to the nearest 1,000) is:
• A.

7,821,000

• B.

7,957,000

• C.

8,052,000

• D.

8,443,000

• 23.
An importer of sports clothing calculates a profit margin of 20% on his purchase prices. On 31 March, the importer has a total clothing inventory of 150,000 (balance sheet figures). The budgeted sales volume for April is 240,000. In anticipation of increased sales in the summer season, the desired inventory at 30 April should be 40% higher than that of 31 March The purchasing budget for April is:
• A.

300,000

• B.

275,000

• C.

260,000

• D.

200,000

• 24.
A company has presented the following figures:     Balance sheet 31-Dec (x1000 euro)         2009 2010       2009 2010 Buildings   750 600   Share capital 100 80 Equipments   320 400   Premium reserve 300 100 Inventory   230 170   Retained earnings 870 870 Acc Receivable         Profit   15 0 Cash + cash equivalents 60 80   Acc Payable 70 200           Tax Payable 5 0                       1,360 1,250       1,360 1,250     Profit and Loss account                           Sales               15,000 Cost of goods sold           8,000   Deprecation             100   Other costs             6,880                                     14,980                   Profit before tax             20 Corporate tax               5                   Net tax               15 The cash flow from investing activities is:
• A.

-250,000

• B.

-150,000

• C.

+150,000

• D.

+250,000

• 25.
The trading company launched operations in 2009 with a total equity of 15,000. In 2009 and 2010, the following transactions took place: 2009           01-Jan Purchased 3,000 units at 5,00 09-May Sold       900 units at 7,50 12-Oct Purchased 1,900 units at 5,50 31-Dec Sold   1,900 units at 8,50             2010           02-Feb Purchased 2,000 units at 6,50 08-Jun Sold   2,700 units at 9,00 17-Sep Purchased 1,000 units at 8,00 31-Dec Sold   1,100 units at 10,50 Under the individual LIFO method, the total profit over 2010 is:
• A.

7,600

• B.

8,800

• C.

10,200

• D.

11,500

• 26.
The trading company launched operations in 2009 with a total equity of 15,000. In 2009 and 2010, the following transactions took place: 2009           01-Jan Purchased 3,000 units at 5,00 09-May Sold       900 units at 7,50 12-Oct Purchased 1,900 units at 5,50 31-Dec Sold   1,900 units at 8,50             2010           02-Feb Purchased 2,000 units at 6,50 08-Jun Sold   2,700 units at 9,00 17-Sep Purchased 1,000 units at 8,00 31-Dec Sold   1,100 units at 10,50 Under the individual LIFO method, inventory at 31 December 2010 is valued at:
• A.

12,100

• B.

12,900

• C.

13,700

• D.

14,500

• 27.
A furniture maker has been commissioned to manufacture a number of cupboards. The total purchase price of wood and other direct material costs are 8,925 (including 19% VAT). The estimaeted direct labour costs for this order are 6,000 (excluding VAT). The overhead rate for the indirect costs is 25% of the total direct costs. The cost of the order is:
• A.

15,625

• B.

15,750

• C.

16,875

• D.

18,750

• 28.
Last month, company X made a profit of 50,000 under the direct costing method. The opening inventory was 13,000 units, and the closing inventory 18,000 units. According to the absorption costing method, the fixed production costs are 2 per product. Under absorption costing, the profit or operating profit last month was:
• A.

36,000

• B.

40,000

• C.

60,000

• D.

76,000

• 29.
A retailer has a gross profit margin of 40% on purchase price (excluding VAT). The selling price of product A is 19,95 (including 19% VAT). What is the purchase price excluding VAT?
• A.

9,84

• B.

10,18

• C.

11,64

• D.

11,97

• 30.
The trading company launched operations in 2009 with a total equity of 15,000. In 2009 and 2010, the following transactions took place: 2009           01-Jan Purchased 3,000 units at 5,00 09-May Sold       900 units at 7,50 12-Oct Purchased 1,900 units at 5,50 31-Dec Sold   1,900 units at 8,50             2010           02-Feb Purchased 2,000 units at 6,50 08-Jun Sold   2,700 units at 9,00 17-Sep Purchased 1,000 units at 8,00 31-Dec Sold   1,100 units at 10,50 Under FIFO, inventory at 31 December 2009 is valued at:
• A.

11,750

• B.

12,200

• C.

14,950

• D.

15,100

• 31.
In the last quarter, the fixed manufacturing costs of corporation X were 1,000,000 and the (proportionally) variable costs 720,000. The normal annual production and sales are 160,000 units, spread evenly over four quarters. The actual production during the last quarter was 45,000 units, 42,000 of which were sold at a price of 50 each. The operating profit in this quarter was:
• A.

378,000

• B.

405,000

• C.

503,000

• D.

530,000

• 32.
A trading company imports article A for 2,50 per unit and sells it for 10. The fixed costs of this company are 25,000 per month. What is the envisaged annual turnover to achieve a pre-tax profit of 150,000 a year?
• A.

500,000

• B.

600,000

• C.

750,000

• D.

800,000

• 33.
A metalworking company manufactures 5,000 bolts A, 4,000 bolts B and 2,000 bolts C a week. The total material costs (steel) for this production line are 6,000 per week. The quantity of steel per bolt has the following ratio: A : B : C = 2 : 3 : 5. The material costs per bolt C are:
• A.

0,375

• B.

0,5625

• C.

0,9375

• D.

1,0625

• 34.
Corporation ABC manufactures product X; the cost per unit of 12 is made up of 4 fixed costs and 8 variable costs. The total fixed costs over a certain period are 24,000; the total variable costs are 52,000. The selling price is constant at 15 per unit and all 6,500 manufactured products are sold. What is the operating income (profit) of ABC over that period?
• A.

19,500

• B.

21,500

• C.

23,500

• D.

25,500

• 35.
In a particular production period, the actual production volume of a business is 75% of normal activity. The direct material costs are 60,000 and the direct labour costs 75,000 (60% fixed, the rest proportionally variable). The total indirect costs are 45,000 (80% fixed). In the coming period, the material costs are expected to increase by 5%, the direct labout costs by 1% and the indirect costs by 3%. The overhead rate for the next period, based on normal volume and taking into account the price increases, is:
• A.

27,5%

• B.

29,1%

• C.

29,3%

• D.

33,3%

• 36.
An estate agent has an average commission rate of 1,8% of the total sale vale. The fixed costs are 150,000 a year, variable costs are (on average) 0,2% of the sale value. The break-even turnover (total sale value) is:
• A.

7,500,000

• B.

8,333,333

• C.

9,375,000

• D.

10,000,000

• 37.
A company decides to change from FIFO to LIFO retroactively. According to FIFO, the inventory value at 1 January was 120,000. According to LIFO the value was 90,000. According to FIFO, the inventory value as at 31 December was 180,000, according to LIFO 140,000. As a result of this change the annual profit:
• A.

Decreases by 40,000

• B.

Decreases by 30,000

• C.

Decreases by 10,000

• D.

Increases by 40,000

• 38.
Corporation ABC manufactures product X; the cost per unit of 12 is made up of 4 fixed costs and 8 variable costs. The total fixed costs over a certain period are 24,000; the total variable costs are 52,000. The selling price is constant at 15 per unit and all 6,500 manufactured products are sold. What is the break-even sales volume of ABC over that period?
• A.

3,000 units

• B.

3,429 units

• C.

6,000 units

• D.

8,000 units

• 39.
The following cost allocation sheet has been produced by company X (x 1,000):                               Management                  Maintenance                  Product A                         Product B Labour costs      120                                       50                                   375                                    375 Materials                60                                    300                                    240                                   150                        Machine Costs                                                80                                    360                                    240 The management costs are charged to the other departments in proportion of the labour costs. The costs of the maintenance department are charged to the manufacturing departments in proportion to their directly allocated machine costs. The normal production is 15,000 A and 15,000 B. The costs per unit of A and B are:
• A.

A: 93,60 and B: 74,40

• B.

A: 94,20 and B: 73,80

• C.

A: 96,40 and B: 73,60

• D.

A: 97,00 and B: 73,00