FM015 PART A SET 2

1. Which of the following statement about qualities of good information is false?

• It should be relevant and true
• It should be communicated to the right person
• It should be accurate
• It should be timely

2. An organisation has the following total costs at two activity levels:

• $154,545
• $158,333
• $160,000
• $168,750

3. Which of the following would not be expected to appear in an organisation’s mission statement?

• The organisation’s values and beliefs
• The products or services offered by the organisation
• Quantified short term targets the organisation seeks to achieve
• The organisation’s major stakeholders

5. Which of the following best describes a controllable costs?

• A cost which arises from a decision already taken, which cannot be changed in short run.
• A cost for which the behavior pattern can be easily analysed to facilitate valid budgetary control comparisons.
• A cost which can be influenced by its budget holder.
• A specific cost of an activity or business which would be avoided if the activity or business did not exist.

6. Which of the following statements that relate to different type of data are true?

• 1 and 2 only
• 2 and 3 only
• 2 and 4 only
• 3 and 4 only

7. The total costs of a business for differing levels of output are as follows:

• Y=$30,000 + $100x
• Y=$30,000 + $110x
• Y=$10,000 + $110x
• Y=$10,000 + $100x

8. Which of the following statements describes the essence of systematic sampling?

• Each element of the population has an equal chance of being chosen
• Members of various strata are selected by interviewers up to predetermined limits
• Every nth member of the population is selected
• Every element of one definable sub-section of the population is selected

9. Manufacturing costs are also known as product costs. Which of the following best describes those costs which are considered to be manufacturing costs?

• Direct materials, direct labor and factory overhead
• Direct materials and direct labor only
• Direct materials, direct labor, factory overhead and administration overhead
• Direct labor and factory overhead

10. Which of the following statements is correct?

• Management accounting systems provide information for use in fulfilling legal requirements.
• Management accounting systems provide information for the use of decision makers within an organization.
• Management accounting systems provide information for use by shareholders.
• Management accounting systems provide information for by tax authorities.

11. The diagram represents the behaviour of a cost item as the level of output changes:

• Discounts are received on additional purchases of material when certain quantities are purchased
• Employees are paid a guaranteed weekly wage, together with bonuses for higher levels of production
• A licence is purchased from the government that allows unlimited production
• Additional space is rented to cope with the need to increase production