F2 Assessment 2

In the last period an organisation budgeted to work 116,000 hours manufacturing 29,000 units. Actual output last period was 26,000 units which took 108,000 hours to manufacture. What was the labour efficiency ratio for the last period (expressed as a % correct to one decimal place)?

• 89.7%

• 93.1%

• 96.3%

• 103.3%

Last month an organisation's direct workers were paid $40,000 for normal working. In addition they were paid a total of $12,000 for overtime working. Overtime hours which were required due to a general shortage of labour were paid at time and a half. What was the total direct labour cost for last month? $__________

A company manufactures and sells a single product. Next year the budgeted total fixed production costs are $300,000, the budgeted sales are 100,000 units and the budgeted production is 120,000 units. The budgeted profit for next year using absorption costing principles is $80,000. What is the budgeted profit for next year using marginal costing principles? 

• $30000

• $20000

• $140000

• $130000

Last month a manufacturing company's profit was $2,000, calculated using absorption costing principles. If marginal costing principles had been used, a loss of $3,000 would have occured. The company's fixed production cost is $2 per unit. Sales last month were 10,000 units.What was last month's production (in units)?

• 7500

• 9500

• 10500

• 12500

A factory consists of two production cost centres (T and V) and one service cost centre (W). The total allocated and apportioned overhead for each centre is as follows: T ($)      V ($)    W ($) 22,000 54,000    80,000 The service cost centre overhead is reapportioned to the production cost centres based on the number of employees. The number of employees in each cost centre is as follows: T   V   W 50 30  20 After the reapportionment of service cost centre overhead what is the total overhead for production cost centre T? $________

A hotel has 120 identical bedrooms. It uses labour efficiency percentages to compare the performance of four groups of workers (A, B, C and D) employed to clean the bedrooms. The standard time to clean a bedroom is 40 minutes. The following data for last week are available: Group                            A      B      C      D Actual hours worked                 128  140  124   108 Actual number of bedrooms cleaned                    198   207  186   165 Which group of workers was the most efficient last week? 

• Group C

• Group A

• Group B

• Group D

A company uses an overhead absorption rate of $24 per machine hour which was calculated using 80,000 budgeted machine hours for the period. During the same period actual total overhead expenditure was $2,100,000 and 84,000 machine hours were recorded on actual production.  By how much was the total overhead under or over absorbed in the period? 

• $80,000 over absorbed

• $84000 under absorbed

• $80000 under absorbed

• $96000 over absorbed

Which of the following would be classed as indirect labour? 

• Assembly workers in a company manufacturing televisions;

• A stores assistant in a factory store;

• Plasterers in a construction company;

• An audit clerk in a firm of auditors.

At the end of a period, in an integrated cost and financial accounting system, the accountingentries for $10,000 overheads over-absorbed would be:

• Dr Work-in-progress control account Cr Overhead control account

• Dr Income statement Cr Work-in-progress control account

• Dr Income statement Cr Overhead control account

• Dr Overhead control account Cr Income statement

A company sold 56,000 units of its single product in a period for a total revenue of $700,000. Finished inventory increased by 4,000 units in the period. Costs in the period were: Variable production$3.60per unitFixed production$258,000(absorbed on the actual number of units produced)Fixed non-production$144,000   Using absorption costing, what was the profit for the period?  $_____________

Budgeted production in a factory for next period is 4,800 units. Each unit requires five labour hours to make. Labour is paid $10 per hour. Idle time represents 20% of the total labour time.What is the budgeted total labour cost for the next period?

• $300,000

• $192000

• $240,000

• $288,000

L currently pays its direct production workers on a time basis at a rate of $6.50 per hour. In an effort to improve productivity, the company is introducing a bonus based on (timetaken/time allowed) × time saved × rate per hour. The standard time allowed for a workerin the Assembly Department to perform this particular operation once has been agreed at37.5 minutes.In the first week of the scheme’s operation, one employee worked for a total of 44 hours andperformed 94 operations.The gross wages for this employee based on a time rate of $6.50 per hour plus theproductivity bonus based on (time taken/time allowed) × time saved × rate per hour, to 2decimal places, is:

• $214.20

• $357.80

• $381.88

• $977.60

A company records the following information concerning a product:Standard time allowed per unit 16 minutesActual output in period 720 unitsActual hours worked 180Budgeted hours 185What is the labour efficiency ratio?

Actual overheads $225900actual machine hours 7530Budgeted overheads $216000Assume the budgeted overheads absorption rate was $32/hour, calculate the budgeted machine hours.

• 7059

• 6750

• 6900

• 7000

A company makes two products, Reds and Blues. Total fixed overheads to absorbduring May are $60,000. Budgeted production levels for Reds for May are 10,000units. Twice as many Blues as Reds are to be produced. Each Red takes 1 hour oflabour and each Blue takes 0.25 hours. Overheads are to be absorbed on a labourhour basis.What is the overhead absorption rate for each finished Blue

Sam is an assembly worker earning $12 per hour for a basic 35-hour week. Any overtime is paid at a premium of 50%.In the last 4-week period Sam was paid for 150 hours, during this time 15 hour were classed as idle due to a machine breaking down. Also included in the number of hours are 4-hours’ overtime spent working for an urgent job at the request of the customer.How much should be charged to the production overhead account for the 4-week period?

• $216

• $240

• $288

• $360

A company has four departments: Assembly, Finishing, Maintenance and Administration. Budgeted data for each department is shown below:                                                 Assembly    Finishing     Maintenance    AdministrationAllocated overheads               $90,000    $100,000       $10,000              $10,000Direct labour hours                    5,000         6,000               Nil                       NilMachine hours                          10,000        3,000            2,000                     Nil% of time spent maintaining       60            40                  Nil                         NilNumber of staff                            60           120                 10                         10What is the most appropriate production overhead absorption rate to use in the Assembly department? 

• $9.60 per machine hour

• $9.90 per machine hour

• $17.33 per labour hour

• $18.33 per labour hour

Budgeted production details for November are as follows:                                              Product X   Product Y  Product Z Units produced                        2,000      1,600          2,200 Units sold                                  1,800     1,500          2,000 Variable cost/unit                      100          80            120 Fixed overhead absorbed/unit 30           30               50 No. of labor hours                        6           4.5                5 There was no opening inventory at the beginning of November.Budgeted fixed overheads for November are: 

• $810000

• $739000

• $218000

• $199000

Use data from previous question to answer this question:Which of the following statements is true? 

• Absorption costing profit will be $19,000 lower than marginal costing profit

• Absorption costing profit will be $71000 lower than marginal costing profit

• Absorption costing profit will be $19,000 higher than marginal costing profit

• Absorption costing profit will be $71000 higher than marginal costing profit

A job is budgeted to require 3,300 productive hours but will incur 25% idle time. If the total labor cost budgeted for the job is $36,300, what is the labor cost per hour (to the nearest cent)? 

In overhead absorption which of the following is the final step relating overheads to units? 

• Allocation

• Apportionment

• Absorption

• Reapportionment

The following data relates to Questions 24 and 25Normal working week 36 hours Basic rate of pay (direct) $6.20 per hour Overtime pay $7.50 per hour Last week, the total hours worked by all these workers was 936. The overtime hours worked was 108. All employees worked at least their basic 36 hours. The number of workers who worked last week:

• Was 23

• 26

• 29

• Cannot be determined

The total direct labor charge for the above was: 

• $810

• $5133.60

• $5803.2

• $6210

D Ltd operates a total absorption costing system. Budgeted fixed overheads for 2007 were $175,000 and budgeted production was 5,000 units. During 2007, the actual fixed overheads amounted to $186,000 and actual production was 6,000 units. Overheads have been: 

• Under-absorbed by $24000

• Under absorbed by $11000

• Over absorbed by $11000

• Over absorbed by $24000

PQR sells one product. The cost card for that product is given below:                                                $Direct materials                      4Direct labour                           5Variable production overhead 3Fixed production overhead     2Variable selling cost                 3The selling price per unit is $20. Budgeted fixed overheads are based on budgeted productionof 1,000 units. Opening inventory was 200 units and closing inventory was 150 units. Salesduring the period were 800 units and actual fixed overheads incurred were $1,500.The total contribution earned during the period was:

• $2000

• $2500

• $4000

You are putting together a price quote for a potential customer. To do so, you need to calculate the labour costs of the workers involved in the job. You have estimated that the job will take 210 labour hours of work. However, 20% of the total labour hours worked is always idle time. If the wage rate is $7.50 per hour, what will be the total labour cost of the job?

• $1575

• $1890

• $1968.75

• $2000.75

Smith Inc operates a total absorption costing system. Budgeted fixed overheads for a period were $375,000 and budgeted production was 15,000 units. During the period, the actual fixed overheads amounted to $418,000 and actual production was 17,000 units.How much is the under or over-absorption of overheads? 

• Under-absorbed by $43,000

• Under-absorbed by $7000

• Over-absorbed by $43,000

• Over-absorbed by $7,000

A company employed 5700 employees at the end of the financial year. During the year 600 employees left the company and 360 were recruited.What was the rate of labour turnover for the year?

• 10.3%

• 16.5%