21. When opening inventory was 6000 units and closing inventory was 5000 units, a firm had a profit of $25,000 using marginal costing. If the fixed overhead absorption rate was $5 per unit, what would be the profit using absorption costing?
22. Which three of the following make up the 3E’s?ww
A . Economy
23. An investment centre has a profit of $400,000 and controllable assets of $5,000,000. The notional cost of capital is 10%. What is the residual income for this centre?
24. Calculate the gross profit margin if Revenue was $400,000 and profit was $30,000 and expenses for the period accounted for $70,000.
25. Due to poor wages being paid, many staff at Kaylot Ltd had left their jobs. Newer staff were hired, despite them being low skilled and less experienced. What will happen as a result of this with regards to the variances on labour rate?
1. Huang PLC sells imported rice. The following information is available;ww
2015 January February March
Total Sales $400,000 $390,000 $420,000
Total Sales consists of cash and credit sales. 10% of sales are made in cash, whilst 70% of sales are paid in the following month and 95% of the remainder is settled in 2 months. The remaining 5% is treated as irrecoverable debts.
A. Calculate the amount of cash to be received in February.
B. Calculate the amount of cash to be received in March.
C. If an index for sales was used on a monthly basis, with 2013 January = 100, and 2015 January being 133, what will be the index figure for February?
D. Huang’s Marketing team has noticed that customers tend to purchase new products from multiple rice brands and devised a strategy to change its packaging design once in every 12 months. The development of a new packaging starts 3 months prior to its introduction. So based on the product life cycle, the last 3 months before a new packaging is introduced is known as what stage?
E. If a discount of 2% is offered, it has been noted that cash sales within the month will rise to 25%. If this happens, what will be the cash received for the month of March?
2. The following is an extract from the financial statements for Moddy’s Private Limited.ww
Year 2005 2004
Revenue $200,000 $120,000
Gross Profit $120,000 $70,000
Net Profit $30,000 ($12,000)
Current Assets $50,000 $20,000
Current Liabilities $30,000 $10,000
Closing Inventory $20,000 $6,000
Non-Current Liabilities $100,000 $140,000
Equity consists of 100,000 shares of $2 each.
A. Calculate the Return on Capital Employed for 2005.
B. What is the gross profit margin for 2004?
C. What is the Net Profit margin for 2005?
D. What is the current ratio for 2005?
E. Calculate the gearing ratio for 2005?
F. It has been noted that the there was a net loss for the period of 2004. Which of the following assumptions could be a reason for the loss?
3. Remo Limited is a construction company and takes up jobs for customers in the locality. The information below relates to a room renovation for a customer Jonas.
500 tiles @ $4 per tile
100Kg Cement @ $90 per 50KG bag
10KG Tile Grout @ $16 per KG
40 Hours skilled labour @ $25 per hour
Fixed Production Overheads are absorbed at $30 per Labour Hour
Remo adds a 25% mark up to price all services.
B. What will be the selling price of the job to Jonas?
C. What would be the most suitable measure of the quality of work provided to Jonas?
D. What would be the impact on the price if there was a 25% profit margin rather than a 25% mark up?
E. What is the most threatening disadvantage to Remo of using low skilled labour on the job from a management accounting perspective?