Management Accounting Techniques

To prepare a flexible budget statement, the actual costs must be flexed to the activity level of the budget

• True

• False

Fixed budgets are useful for planning purposes or for when the activity level is unlikely to change

• True

• False

............................................... sales revenue variance based on a flexed budget could arise when goods are sold above budgeted prices

• A favourable

• An Adverse

• A Balance

......................................................per unit of output do not alter when volumes change

• Variable Cost

• Fixed Cost

• Semi Variable Cost

• Stepped Fixed Cost

Semi-variable costs contain both a fixed element and a variable element

• True

• False

Wyeco Ltd makes one product, which he sells at £55 per unit with the following costs: Variable direct materials £18 per unit Variable direct labour £12 per unit, Fixed overheads £180,000 per year.

What is the Break Even Point units?

• 6,000 Units

• 10,000 Units

• 7,200 Units

• 3,273 Units

A business sells its single product for £40. The variable costs of this product total £32. The fixed costs of the business are £100,000.

What is the sales revenue required in order to make a profit of £200,000?

• £37,500

• 250,000

• £12,500,000

• £1,500,000

A business has budgeted sales of its single product of 38,000 units. The selling price per unit is £57 and the variable costs of production are £45. The fixed costs of the business are £360,000. Calculate the margin of safety in Percentage

• 26.67%

• 20.52 %

• 21.05%

• 12%

If a business increases the selling price of a product by £1 what will be the impact on the breakeven point and the margin of safety, assuming no change in the number of units produced?

• The breakeven point will decrease and the margin of safety will increase

• The breakeven point will decrease and the margin of safety will stay the same.

• The margin of safety will stay the same but the breakeven point will increase.

• The margin of safety will decrease and the breakeven point will decrease.

CC Ltd manufactures a carbonated drink which is sold in 1 litre bottles. During the bottling process there is a 10% loss of liquid input due to spillage and evaporation. The standard usage of liquid per bottle is:

• 1.25 litres

• 1.11 litres

• 1.20 litres

• 1.12 litres