These are ACCA F2 (MA/FMA) Management Accounting MCQs for Part-D of the Syllabus “Budgeting”.

These MCQs are designed in a way that students could better understand the exam format and get used to practice online. This approach will reduce exam stress and enable students to prepare better.

We request the students, Not to solve the MCQs until they have learned and finished the entire F2 (MA/FMA) Management Accounting Chapter 10a – Budgeting and Syllabus Area Part-D “Budgeting”.

All the questions are compulsory, so do not skip any.

INFORMATION ABOUT THESE CBE MCQs Test/Quiz

Course: ACCA – Associations of Chartered Certified Accountants
Fundamental Level: Knowledge, FIA – Foundation in Accounting
Subject: Management Accounting
Paper: F2 – MA/FMA
Chapter: Budgeting
Chapter Number: 10a of the Practice and Exam Kit
Syllabus Area: D – Budgeting
Questions Type: CBE MCQs
Exam Section Type: Section A

Syllabus Area

These Multiple Choice Questions (MCQs) cover the Syllabus Area Part D of the Syllabus; Budgeting of ACCA F2 (MA/FMA) Management Accounting Module.

Time

These multiple-choice questions (MCQs) are not timed, allowing students to solve them without feeling any pressure and to pay proper attention to the questions.

Result

Students can see their result at the end of the Quiz. They can also be able to see the number of correct and wrong questions. Moreover, the explanation of wrong questions.

Types of Questions

MCQs: Choose one from the given options.
Multiple choice: Choose all those answers which seem correct/ or incorrect to you, as per the requirement of the question. Keep your eye on the wording “(select all those which are correct/ or incorrect)“.
Drop-down: Select from the list provided.
Type numbers: Type your answer in numbers as per the requirement of the question.

Keywords

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F2 - Chapter 10a - Part A - MCQs

Course: ACCA - FIA
Subject: F2 (MA/FMA) Management Accounting
Chapter: 10a - Budgeting
Syllabus Area: D - Budgeting
Exam Section: Section A
Questions type: MCQs
Time: No Time Limit

INSTRUCTIONS

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1 / 14

What does the statement 'sales is the principal budget factor' mean?

The level of sales will determine the level of profit at the end of the period

The company's activities are limited by the level of sales it can achieve

Sales is the largest item in the budget

The level of sales will determine the level of cash at the end of the period

2 / 14

The standard cost card for a company’s only product is given below:

	$ per unit
Selling price	118
Direct labour 4 hours at $20 per hour	80
Direct material 3 kg at $7 per hour	21
Fixed production overhead	5
Profit	12

For a period, budgeted production and sales were 8,000 units, whilst actual production and sales were 6,000 units.

What is the flexed budget profit?

$102,000

$96,000

$72,000

$62,000

3 / 14

Budgeted costs and revenues for an output level of 4,000 units are given below. It is known that after an output level of 5,000 units there is a step up in fixed costs of $1,000:

	$ per unit
Selling price	30
Variable cost	18
Fixed cost	4
Profit	8

What is the flexed budget profit at an output level of 6,000 units?

$56,000

$48,000

$47,000

$55,000

4 / 14

	A	B	C	D	F	G
1		Jan	Feb	Mar	Apr	May
2	Sales	15,000	13,400	16,100	17,200	15,300
3	Cost of sales	11,090	10,060	12,040	13,000	11,100
4	Gross profit	3,910	3,340	4,060	4,200	4,200
5	Expenses	1,500	1,500	1,500	1,500	1,500
6	Net profit	2,410	1,840	2,560	2,700	2,700
7
8	Net profit %

What would be the formula for March net profit?

=D4–D5

=B6+C6

=D2–D3

=D3*D8

5 / 14

	A	B	C	D	F	G
1		Jan	Feb	Mar	Apr	May
2	Sales	15,000	13,400	16,100	17,200	15,300
3	Cost of sales	11,090	10,060	12,040	13,000	11,100
4	Gross profit	3,910	3,340	4,060	4,200	4,200
5	Expenses	1,500	1,500	1,500	1,500	1,500
6	Net profit	2,410	1,840	2,560	2,700	2,700
7
8	Net profit %

The formula =C2-C3 will give the contents of which cell in the drop down list?

6 / 14

QT Co manufactures a single product and an extract from their flexed budget for production costs is as follows.

Activity level

Customer	80%	90%
	$	$
Direct material	2,400	2,700
Labour	2,120	2,160
Production overhead	4,060	4,080
	8,580	8,940

What would the total production cost allowance be in a budget flexed at the 83% level of activity? (to the nearest $)

7 / 14

Which of the following may be considered to be objectives of budgeting?

Co-ordination
Communication
Expansion
Resource allocation

All of them

(ii) and (iv)

(i), (ii) and (iv)

(ii), (iii) and (iv)

8 / 14

Misty Co's budgetary control report for last month is as follows:

	Fixed budget	Flexed budget	Actual results
	$	$	$
Direct costs	61,100	64,155	67,130
Production overhead	55,000	56,700	54,950
Other overhead	10,000	10,000	11,500
	126,100	130,855	133,580

What was the volume variance for last month?

$2,725 (F)

$4,755 (F)

$4,755 (A)

$2,725 (A)

9 / 14

The following spreadsheet shows the calculation of a company’s profit.

	A	B
1		$
2	Sales revenue	20,000
3	Variable production costs	5,000
4	Fixed production costs	3,000
5	Gross profit	12,000
6	Variable selling costs	1,000
7	Fixed selling costs	500
8	Profit	10,000

Which formula would calculate contribution?

B2 – B3

B8 + B7 + B4

B8 + B7

B5 – B6

10 / 14

A company manufactures a single product. In a computer spreadsheet the cells F1 to F12 contain the budgeted monthly sales units for the twelve months of next year in sequence, with January sales in cell F1 and finishing with December sales in F12. The company policy is for the closing inventory of finished goods each month to be 10% of the budgeted sales units for the following month.

Which of the following formulae will generate the budgeted production (in units) for March next year?

=[(0.9*F3) + (0.1*F4)]

=[(1.1*F3) – (0.1*F4)]

=[F3 – (0.1*F4)]

=[F3 + (0.1*F4)]

11 / 14

Which of these statements is untrue?

Spreadsheets make the calculation and manipulation of data easier and quicker

Spreadsheets are useful for plotting graphs

Spreadsheets are very useful for word-processing

Budgeting can be done very easily using spreadsheets

12 / 14

The following spreadsheet shows a profit centre's variances against budget for a period. Some figures have been omitted (omitted figures are labelled ????).

	A	B	C	D	E
1		Fixed budget	Flexed budget	Actual	Variance
2	Sales/production units	1,200	1,500	1,500	300
3		$	$	$	$
4	Sales revenue	60,000	75,000	74,000	-1,000
5	Direct material	21,600	???	24,000	???
6	Direct labour	14,400	18,000	22,000	-4,000
7	Contribution	24,000	???	28,000	???
8	Fixed costs	17,000	17,000	16,500	500
9	Profit	7,000	13,000	11,500	na

What figure should appear in cell E5?

-2,400

-3,000

3,000

2,400

13 / 14

Misty Co's budgetary control report for last month is as follows:

	Fixed budget	Flexed budget	Actual results
	$	$	$
Direct costs	61,100	64,155	67,130
Production overhead	55,000	56,700	54,950
Other overhead	10,000	10,000	11,500
	126,100	130,855	133,580

What was the expenditure variance for last month?

$7,480 (F)

$7,480 (A)

$2,725 (A)

$2,725 (F)

14 / 14

	A	B	C	D	F	G
1		Jan	Feb	Mar	Apr	May
2	Sales	15,000	13,400	16,100	17,200	15,300
3	Cost of sales	11,090	10,060	12,040	13,000	11,100
4	Gross profit	3,910	3,340	4,060	4,200	4,200
5	Expenses	1,500	1,500	1,500	1,500	1,500
6	Net profit	2,410	1,840	2,560	2,700	2,700
7
8	Net profit %

What would be the formula for March net profit?

=G4/100*G6

=G6/G2*100

=G2/G6*100

=G6/G4*100

Your score is

F2 (MA/FMA) – Chapter 10a – PART D – CBE MCQs – ACCA