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DPBS 1170

Term 2 2023

Sample Final Exam 

MCQ (Accounting topics)

1. Which of the following is NOT a component of the operating budget?

A. Revenue budget

B. Production budget

C. Direct materials budget

D. Support department budget

E. Cash budget

2. United Security manufactures security cameras. Tom Kramer, CEO of United Security, recently fout out that one of his managers deliberately sets a low (and therefore easier to achieve) sales target when participating in the budgeting process. This behaviour is most likely an example of which of the following?

A. utilising local knowledge to improve resource management

B. empire building

C. creating budget slack

D. improved managerial buy-in with the budgeting process.

3. At the end of 2020, Hape Engineering prepared its master budget for 2020. Selected amounts from Hape Engineering’s flexible budget, along with actual results for 2020, are presented below.  

Which items in the table have unfavourable variances?

A. Marketing costs and interest revenue

B. Marketing costs and costs of goods sold only

C. Interest revenue, cost of goods sold and marketing costs only

D. People development costs and interest revenue only

4. Betty’s Burger makes and sells burgers. Its most famous burgers is “Betty’s premium angus steak burger with the lot”, which sells for $20 each. When determining the cost of this burger, the cost of oil is most appropriately described as:

A. A direct cost and a prime cost

B. An indirect cost

C. A direct cost but not a prime cost

D. An unexpected cost

5. Big Data Analytics has two operations departments (Data Security, and Cyber Security), and two support departments (Human Resources (HR), Information Technology (IT)). Prior to allocation of any support department costs, the total cost of HR Department is $600,000, and the total cost of Information Technology department is $450,000.  Big Data Security uses the number of employees to allocate HR Department’s costs, and the number of computer devices to allocate IT Department’s cost. The following additional information is available:

Using the Direct Method of support cost allocation, what is the amount of HR cost allocated to Data Security?

A. $160,000

B. $180,500

C. $225,000

D. 138,462

6. Lola is preparing the Quarter 2 (April, May and June) budget for her company, Lola’s Beauty Warehouse. Lola has calculated that the expected cash disbursement for Quarter 2 is $180,000. However, just as Lola is about to go home for the day, her assistant provides her with three pieces of new information that Lola is not previously aware of. The new information is as follow:

(1) The rent for the Warehouse, payable at the beginning of each month, will increase by $2,000 per month, starting from April.

(2) An advisory fee paid to their product engineer of $15,000 is due in two instalments: 50% is to be paid in June, and 50% to be paid in July.

(3) Lola’s assistant has miscalculated the monthly machine depreciation, which should be $5,500 rather than $5,000 per month.

Based on the above new information, what is Lola’s Beauty Warehouse’s budgeted cash disbursement in Quarter 2?

A. $189,500

B. $193,500

C. $201,000

D. $194,500

7. Currawong Cushions has projected sales for the next three months as follows.

Beginning inventory for the year is 47 000 units. Ending inventory for each month should be 30% of the next month’s sales. How many units should the Currawong produce in January?

A. 44,000

B. 50 000

C. 97 000

D. 70 000

E. 90 000

8. Cassowary Cookware expects to sell 34 000 units of finished goods over the next 6-month period. The company has 10 000 units on hand and its managers want to have 14 000 units on hand at the end of the period. To produce one unit of finished product, two units of direct materials are needed. Cassowary Cookware has 100 000 units of direct material on hand and has budgeted for an ending inventory of 110 000 units.

What is the amount of direct material to be purchased (in units)?

A. 35,000

B. 38 000

C. 66 000

D. 86 000

E. 76 000

9. Dollarbird Ltd. projects sales for its first three months of operation as follows.

After interviewing the sales team, the CFO of Dollarbird Ltd finds that 50% of credit sales will be collected in the month following sale, 30% in the second month following the sale and the balance the third month. A 5% discount is given if payment is received in the month following sale. Based on the above information only, what is the anticipated cash receipt for February?

A. $71 250

B. $107 500

C. $121 250

D. $144,000

E. $238 000

10. Dollarbird Ltd. projects sales for its first three months of operation as follows.

Dollarbird Ltd.’s inventory on 1st January is $40 000. Subsequent beginning inventories should be 40% of that month’s cost of goods sold. Goods are priced at 140% of their cost. 50% of purchases are paid for in the month of purchase; the balance is paid in the following month. Based on the above information only, what is the total anticipated cash disbursement for January?

A. $178 000

B. $150 000

C. 133,000

D. $89 000

E. $68 000