PM Sunway Test July-Sept 2023 PT
PM Sunway Test July-Sept 2023 PT
PM Sunway Test July-Sept 2023 PT
3. In material flow cost accounting (MFCA), which of the following is NOT a category used?
a. Delivery and Disposal Flows
b. Output Flows
c. Material Flows
d. System Flows
4. A linear programming model has been formulated for 2 products, X and Y. the objective function
is depicted by the formula C = 5X + 6Y, where C = contribution, X = the number of product X to be
produced and Y = the number of product Y to be produced.
Each unit of X uses 2 kg of material Z and each unit of Y uses 3 kg of material Z. The standard cost
of material Z is $2 per kg.
The shadow price for material Z has been worked out and found to be $2.80 per kg.
If an extra 20kg of material Z becomes available at $2 per kg, what will the maximum increase in
contribution be?
a. Increase of $96
b. Increase of $16
c. Increase of $56
d. No change
5. A company manufactures 2 products, Collei and Dori, for which the following information is
available:
Collei Dori Total
Budgeted production (units) 1000 4000 5000
Labour hours/unit 8 10 48000
Number of production runs needed 13 15 28
Number of inspections during production 5 3 8
Total production set up cost $140,000
Total inspection cost $80,000
Other overhead costs $96,00
6. The following are all steps in the implementation of the target costing process for a product:
1) Calculate the target cost
2) Calculate the estimated current cost based on the existing product specification
3) Set the required profit
4) Set the selling price
5) Calculate the target cost gap
Which of the following represents the correct sequence if target costing were to be used?
a. 2, 3, 4, 1, 5
b. 1, 2, 3, 4, 5
c. 4, 3, 1, 2, 5
d. 4, 5, 3, 1, 2
7. The directors of Ahlbie Co are considering the introduction of activity-based costing (ABC). A
trainee manager has asked whether the following comments about the calculation of overhead
cost using ABC are correct:
i. The volume of activity has no influence on cost
ii. Each individual cost will have a unique, identifiable, cost driver
iii. The overhead cost calculated using ABC will always be significantly different to the
overhead cost calculated using absorption costing
Which of the comments are correct?
a. I and II only
b. I and III only
c. I, II and III
d. None of the comments
8. Celsor manufacturers high performance sports cars. The directors are seeking to reduce costs and
wish to identify non-value-added costs.
Which of the following is a non-value-added cost for Celsor?
a. The cost of an improved fuel injection component
b. The cost of tyres
c. Machine set up cost
d. Cost of the in-car entertainment system
11. Which of the following statements correctly describes the shadow price of a resource in linear
programming?
a. The minimum sum payable for one more unit of the scarce resource
b. The increase in total contribution if one more unit of a binding constraint is made
available
c. The maximum sum payable for one more unit of the scarce resource
d. The increase in total contribution if one more unit of a non-binding constraint is made
available
12. In which stage of the product life cycle is advertising and promotion aimed at retaining existing
customers and persuading customers to switch from competitor products?
a. Decline
b. Introduction
c. Maturity
d. Growth
14. When a firm redesigns a product to reduce the number of component parts, the firm is:
a. Decreasing product variety
b. Decreasing non-value-added costs
c. Increasing consumer value
d. Increasing the value added to the product
The price of each of model of TA, TB and TC is $2,700, $3,500 and $4,250 respectively.
The only materials’ costs relating to the production are for the battery, the cables and the
components. There are as follows:
TA TB TC
$/u $/u $/u
Battery 700 800 1000
Cables 35 40 45
Components 5.60 5.60 5.60
There are 5 members of staff employed by Tesla Co. Each works a standard 40-hour week for 47
weeks of the year, a total of 1880 hours each per annum. Their salaries are as follows:
Designer: $38,000 per annum, Technician: $45,000 per annum, Safety Office: $75,000 per annum,
Mechanic: $90,000 per annum, Production specialist: $50,000 per annum.
The only other production costs are general overheads, which include the rental costs, and
amount to $250,000 per annum.
Maximum annual demand for TA, TB and TC is 600, 800 and 1200 units respectively.
Time spent by each staff on the models: Hours per unit:
TA TB TC
Designer 0.6 0.5 0.8
Technician 0.4 0.3 0.5
Safety Officer 0.2 0.2 0.2
Mechanic 0.75 1.00 1.25
Which of the following is/are the bottleneck process?
17. Calculate the total factory cost per bottleneck hour (2 decimal points)
18. Calculate the throughput accounting ration for product TC (2 decimal point)
19. Based on the throughput accounting, what should be the order of ranking to manufacture. Type
Eg: TM,TZ,TY (no space)
20. The following statements have been made about throughput accounting:
1) Non-bottleneck process production level should be based on bottleneck process capacity
2) If machine time is the bottleneck resource, there is no value in taking measures to
improve direct labour efficiency
Which of the above statements is/are true? Type eg: 1 or 2 or 1,2 (no space)
21. (Q21 to Q25)
Venti Co generates and sells electricity. It operates 2 types of power station: nuclear and wind.
The costs and output of the 2 types of power station are detailed below:
Nuclear station:
A nuclear station can generate 9,000 gigawatts of electricity in each of its 40 yeas of useful life.
Operating costs are $486m per year. Operating costs include a provision for depreciation of $175
million per year to recover the $7000 million cost of building the power station.
Each nuclear station has an estimated decommissioning cost of $12,000 million at the end of its
life. The decommissioning cost relates to the cost of safety disposing of spent nuclear fuel.
Wind station:
A wind station can generate 1,750 gigawatts of electricity per year. It has a life-cycle cost of
$55,000 per gigawatt and an average operating cost of $40,000 per gigawatt over its 20-year life.
What is the life-cycle cost per gigawatt of the nuclear station (to the nearest $000)?
a. $54,000
b. $73,000
c. $87,000
d. $107,000
22. Which of the following will decrease the total life-cycle cost of a nuclear station?
1) Increasing the useful life of the station
2) Reducing the decommissioning cost
a. 1 only
b. 2 only
c. Both 1 and 2
d. Neither 1 nor 2
23. How would the disposal cost of spent nuclear fuel be categorised in environmental management
accounting (EMA)?
a. A prevention cost
b. A detection cost
c. An internal failure cost
d. An external failure cost
24. If Vento Co sets a price to earn an operating margin of 40% over the life of a wind station, what
will be the total lifetime profit per station (to the nearest $m)?
a. $35 million
b. $408 million
c. $560 million
d. $933 million
25. Which of the following are benefits of life-cycle costing for Venti Co?
1) It facilitates the signing out of costs at the product development stage
2) It can encourage better control of operating costs over the life cycle
3) It gives a better understanding of the causes of overhead costs
4) It provides useful data for short-term decision making
a. 1, 2 and 3
b. 1 and 2 only
c. 1 and 4
d. 2, 3 and 4
Market research shows that the maximum demand for products L and M during December 2021
will be 400 units and 700 units respectively.
At a recent meeting of the purchasing and production managers to discuss the company’s
production plans for December 2021 to maximise profit, the following resource availability for
December 2021 was identified:
28. Which of the following constrains are valid based on the above scenario? Just type the correct
number(s): eg: 1 or 1,2 or 1,2,3 (no space)
1) 24L + 14M ≤ 2500
2) 10L + 45M ≤ 6000
3) 10L + 20M ≤ 1500
4) 4L + 2M ≤ 2500
5) 2L + 9M ≤ 6000
6) L + 2M ≥ 1500
7) L ≥ 400
8) M ≥ 700
29. The following statements have been made about solving linear programming problems for
budgeting purposes using the graphical method.
1) When the objective function to minimise total variable cost, the optimal solution is at the
point where the objection function line touches the feasible region at a point nearest to
the origin of the graph
2) A constraint that may have an effect on the optimal solution is shown by a line on the
graph that helps to determine the shape of the feasible region.
Which of the above statements is/are true?
a. 1 only
b. 2 only
c. Neither 1 nor 2
d. Both 1 and 2
30. The following statements have been made about solving linear programming problems for
budgeting purposes:
1) Slack occurs when less than the maximum available of a limited resource is required
2) When the linear programming problem includes a constraint for minimum sales demand
for a product, there may be a surplus for sales demand in the optimal solution
Which of the above statements is/are true?
a. 1 only
b. 2 only
c. Neither 1 nor 2
d. Both 1 and 2
1. D. All of the above
2. D. The cost driver for materials handling & despatch costs is likely to be the number of orders
handled
3. B. Output Flow
4. C. Increase of $56
5. 46.25
6. C. 4, 3, 1, 2, 5
7. D. None of the comments
8. C. Machine set up cost
9. D. Target costing is used in new product development, and kaizen costing is used once
production has commenced
10. 16.95
11. B. The increase in total contribution if one more unit of a binding constraint is made available
12. C. Maturity
13. B. Professional accountancy bodies are encouraging the development of environmental reporting
14. B. Decreasing non-value-added costs
15. A. Capitalized and allocated over the life cycle
16. Mechanic
17. 291.49
18. 8.78
19. TB,TA,TC
20. 1,2
21. C. $87,000
22. B. 2 only
23. C. An internal failure cost
24. B. $408 million
25. B. 1 and 2 only
26. B. 22L + 11M
27. D. All
28. 4,5
29. D. Both 1 and 2
30. D. Both 1 and 2
QUESTION 31
BRK Co operates an absorp on cos ng system and sells three products, B, R and K which are
dependent for each other. The following standard selling price and cost data relate to these three
products:
Product Selling price per unit Direct material per unit Direct labour per unit
B $14 3·00 kg at $1·80 per kg 0·5 hrs at $6·50 per hour
R $15 1·25 kg at $3·28 per kg 0·8 hrs at $6·50 per hour
K $18 1·94 kg at $2·50 per kg 0·7 hrs at $6·50 per hour
Budgeted fixed produc on overhead for the last period was $80,000. This was absorbed on a
machine hour basis. The standard machine hours for each product and the budgeted levels of
produc on and sales for each product for the last period are as follows:
Product B R K
Standard machine hours per unit 0·3 hrs 0·6 hrs 0·8 hrs
Budgeted produc on and sales (units) 10,000 13,000 9,000
REQUIRED:
a) Calculate the total break-even point in value and for each product. (8m)
b) Calculate the break even point in value assuming products are sold based on most profitable.
(4m)
c) The company wish to improve its process efficiency. This will involve an addi onal fixed cost
of $20,000. These changes expected to increase its weighted contribu on by $2.00 per unit.
BRK wish to achieve a target profit of $195,000 with these changes. Calculate the addi onal
total budgeted sales units required to achieve its target? (4m)
d) Briefly explain the drawbacks of CVP analysis (4m)
Ques on 32
The McIntyre Resort (MR), which is privately owned, is a world famous luxury hotel and golf
complex. It has been chosen as the venue to stage ‘The Robyn Cup’, a golf tournament which is
contested by teams of golfers from across the globe, which is scheduled to take place during July
2009. MR will offer accommoda on for each of the five nights on which guests would require
accommoda on.
Hotel data:
Room mix:
Double rooms 2
Single rooms 1
Family rooms 4
When occupied, all rooms will contain the number of guests as above.
1. Cost data:
Required:
(a)
(i) Calculate the profit-maximising fee per double room that MR should charge per night
during the Tournament; (6 marks)
(ii) Calculate how much profit would be earned from staging the tournament because of
charging that fee. (4 marks)
(b) The management of the hotel are concerned by the level of variable costs per guest night to
be incurred in respect of the tournament. A recent review of proposed opera onal ac vi es
has concluded that variable cost per guest per night in all rooms in the hotel would be
reduced by 20% if proposed changes in opera onal ac vi es were made. However, this
would result in addi onal a ributable fixed costs amoun ng to $200 000 in respect of the
five day period.
Required:
Advise management whether, on purely financial grounds, they should make the proposed
changes in opera onal ac vi es. (6 marks)
(c) Discuss TWO ini a ves that management might consider in order to further improve the
profit from staging the golf tournament. (4 marks)