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1 Identify the double entry passed when labor is charged to a specific production department’s manufacturing cost
DEBIT = Work in process a/c, CREDIT = Cost of finished goods
DEBIT = Work in process a/c, CREDIT = Payroll a/c
DEBIT = Payroll a/c, CREDIT = WIP A/C
DEBIT = Manufacturing overhead, CREDIT = Work in process
2 Which one of the following costs is associated with replacing rather than retaining workers because of high worker turnover?
Provision of motivation factors
Improving work conditions
Introduction of Premium remuneration Plans
Increasing the probability of learning curve effect
3 Break-even is a point at which:
Contribution margin = Fixed costs or expenses
Sales revenue > Net income
Net income < Contribution margin
Fixed costs = Variable costs
4 CVP is a behavior of Sales, Variable costs, Fixed costs and ____________ Which of the following is appropriate to fill in the blank?
Factory overhead
Cost of goods manufactured
Contribution margin
Net income
5 CVP assumes the following excluding:
Constant variable cost per unit
Constant total fixed cost
Units sold = Units produced
Constant time value of money
6 Which of the following should be regarded as a relevant cost in terms of decision making?
Incremental cost
Sunk cost
Non-incremental cost
Fixed cost
7 In One-off Contracts, a contract will, most probably, be accepted if it increases:
Sales revenue & decreases contribution margin
Contribution margin & net profit
Variable cost & decreases fixed cost
8 Which of the following is the correct formula for the calculation of margin of safety?
Margin of safety = Budgeted sales – Actual sales
Margin of safety = Budgeted sales – Operating profit
Margin of safety = Contribution margin – Actual sales
Margin of safety = Actual sales – Break even sales
9 Deprival value of an assets is depicted as the lower of:
Cost and book value
Replacement cost and recoverable amount
Recoverable amount and NRV
NRV and value in use
10 Which of the following statements are true? 1) Period costs are included in the cost of goods sold 2) Period costs are excluded from the cost of goods sold 3) Period costs are shown in the income statement
2 & 3
2 &1
1 & 3

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