ALL 50 questions are compulsory and MUST be attempted

Please use the space provided on the inside cover of the Candidate Answer Booklet to indicate your chosen answer to

each multiple choice question.

Each question is worth 2 marks.

1    A manufacturing company benchmarks the performance of its accounts receivable department with that of a leading

credit card company.

What type of benchmarking is the company using?

A     Internal benchmarking

B    Competitive benchmarking

C     Functional benchmarking

D    Strategic benchmarking

2    Which of the following BEST describes target costing?

A    Setting a cost by subtracting a desired profit margin from a competitive market price

B    Setting a price by adding a desired profit margin to a production cost

C    Setting a cost for the use in the calculation of variances

D    Setting a selling price for the company to aim for in the long run

3    Information relating to two processes (F and G) was as follows:

Process          Normal loss as             Input                Output

% of input              (litres)              (litres)

F                       8                 65,000                58,900

G                       5                 37,500                35,700

For each process, was there an abnormal loss or an abnormal gain?

Process F                 Process G

A    Abnormal gain              Abnormal gain

B    Abnormal gain              Abnormal loss

C    Abnormal loss              Abnormal gain

D    Abnormal loss              Abnormal loss

4    The following budgeted information relates to a manufacturing company for next period:

Units                                                               $

Production                     14,000          Fixed production costs                            63,000

Sales                          12,000          Fixed selling costs                               12,000

The normal level of activity is 14,000 units per period.

Using absorption costing the profit for next period has been calculated as $36,000.

What would be the profit for next period using marginal costing?

A    $25,000

B    $27,000

C    $45,000

D    $47,000