 Question 1

0 out of 4 points
Which ONE of the following best describes 'zero-based budgeting'?

Selected
Answer:
A method of budgeting where the sum of costs and revenues for
each budget centre equals zero
Answers: A budget method where an attempt is made to make expenditure
under each cost heading as close to zero as possible.

A method of budgeting whereby all activities are re-evaluated each

time a budget is formulated.
A method of budgeting where the sum of costs and revenues for
each budget centre equals zero
A method of budgeting that distinguishes fixed and variable cost
behaviour with respect to changes in output and the budget is
designed to change appropriately with such fluctuations.
 Question 2
0 out of 4 points
An investment of £4,000 now would allows me to draw £________ every year for the next 9
years if the interest rate is 10%.

Fill in the blank with the right value.

Selected Answer:
£596
Answers: £965

£695
£579
£596
Response Feedback: 4000/5.759= 695

 Question 3
0 out of 4 points
what is the present value of £2500 received in 5 years time? cost of capital is 10%.

Selected Answer:
1050
Answers:
 1553
1050
1000
1949
Response Feedback: 2500*0.621= 1552.5

 Question 4
0 out of 4 points

Product X has a selling price of £110 per unit and the following demand and inventory:

Month January February March

Sales demand 400 300 600

Opening inventory 50 30 80
(stock)
Closing Inventory (stock) 30 80 60

What is the production budget for February?

Selected Answer:
580

Answers: 400
380

580

350

 Question 5
0 out of 4 points
 Which one of the following is best applied to the NPV method of investment
appraisal?

Selected
Answer:
Nominal Profit Variable

Answers:
An investment appraisal method that uses discounting
techniques to differentiate between investment projects

Most managers are only interested in a short-term solution

Nominal Profit Variable

None of the above

 Question 6
4 out of 4 points
Which of the following can be classified as production costs?

Selected Answer:
Direct Expenses
Answers: Distribution costs

Direct Expenses
Selling costs
Admin Costs

 Question 7
0 out of 4 points
A company has fixed costs of £90,000 per annum. It makes one product which
it sells for £43 per unit. Its variable cost per unit is £25.

The break-even point in units is:

Selected Answer:
7,000 units
 Answers: 6,000 units

5,000 units

4,000 units

7,000 units
 Question 8
4 out of 4 points
A business makes three plastic toys: Alpha, Gemma and Beta. Sales and
production data is as follows;
Product Alpha Gemma Beta
Sales demand 2500 3400 5100

Time required on moulding machine (Hours) 1 1 0.5

Time required on Packaging machine

0.5 1 0.5
(hours)

All three products require the use of two types of machines: moulding
machine and packaging machine. Moulding Machine has a total capacity
of 8,000 hours per year and packaging machine has a capacity of 5,000
hours per year.
Which machine is a limiting factor?
Selected Answer:
Both machines

Answers: Packaging machine

Moulding machine

Both machines

None of the machines

 Question 9
0 out of 4 points
 In January 2020, Electricity bill for producing 2000 units was £10,000. In February 2020, same
factory produced 5000 units and electricity bill was £19,000. What is the fixed cost of
electricity?

Selected Answer:
£13
Answers: £5
£25

£4,000
£13
 Question 10
0 out of 4 points
Which one of the following is NOT usually a feature of NPV?

Selected
Answer:
Is considered by academics to be the best investment appraisal
method
Answers: Is considered by academics to be the best investment appraisal
method
Can be used to assess all projects

Uses profits to rank projects

Recognises the time value of money

 Question 11
0 out of 4 points
The Board of Directors of Henderson Ltd, which operates solely in the
UK, has recently made the following decisions:

1- To move the company’s operations within five years from the

distribution of goods to the manufacture of goods.
2- To carry out repairs to the car park surrounding the head office
following a recent flood.
3- To begin a sales drive in France, following the success of a recent
sales drive in the north of the UK.

Which of the decisions would you classify as a strategic objective?

Selected Answer:
 Decision 2

Answers: Decision 2

Decision 1

Decision 3
None of the above
 Question 12
4 out of 4 points
The cost of making 5,000 units is £14,000 and the cost of making 10,000 units
in the same manner is £17,000.
What are the fixed costs of the business?
Selected Answer:
£11,000
Answers: £5,000

£7,000

£11,000
£9,000

 Question 13
0 out of 4 points
To decrease net present value, the discount rate should be adjusted:
Selected Answer:
downward
Answers:
upward

none of the above

downward
remain constant

 Question 14
0 out of 4 points
 Which of the following is a direct cost?

Selected Answer:
Administration salaries
Answers: Depreciation on machinery

Manufacturing wages

Factory heating bill

Administration salaries
 Question 15
0 out of 4 points

Which of the following statements about Net Present Value (NPV) are correct?
i- An investment with a positive NPV is viable.
ii- NPV is a superior appraisal method to Internal Rate of Return.
iii- NPV is the present value of expected future net cash receipts
less the cost of the investment.

Selected Answer:
(i) and (iii) only
Answers: (i) and (ii) only
(i) and (iii) only
(i) only

(i), (ii) and (iii)

 Question 16
0 out of 4 points
What is present Value at T0 for £100 at T1 and £125 at T2? Cost of
capital is 15%.

Selected Answer:
228.3
 Answers: 228.3

198.5

200

181.5

 Question 17
4 out of 4 points
Debt finance is a cheaper source of finance than Equity Finance. True or false?

Selected Answer:
True
Answers:
True
False
 Question 18
0 out of 4 points
The cost of making 5,000 units is £14,000 and the cost of making 10,000 units
in the same manner is £17,000.
What is the variable cost of making one unit?
Selected Answer:
50 pence
Answers: 40 pence

60 pence

30 pence

50 pence
 Question 19
4 out of 4 points
Which of the following can be classified as Semi_ variable costs?

Selected Answer:
Electricity Bill
 Answers:
Electricity Bill

Rent
Direct material

Direct labour

 Question 20
4 out of 4 points
A salesperson is paid a basic salary plus commission for each sale made. This
wage cost is:

Selected Answer:
A semi-variable cost.

Answers:
A semi-variable cost.

A production cost
A fixed cost.

A variable cost.
 Question 21
0 out of 4 points
Finance Cost can be classified as Non-Production cost. True or False?

Selected Answer:
[None Given]
Answers:
True
False
 Question 22
4 out of 4 points
A four year project requires investment of £6,750 at the start and produces positve net
cashflows of £3,000 for the life of the project every year. What is the net present value of the
project if the ocst of capital is 5%.
 Selected Answer:
£3,888
Answers: £3,883
£3,833
£3,388

£3,888
 Question 23
0 out of 4 points
A business makes three plastic toys: Alpha, Gemma and Beta. Sales and production data
is as follows;

Product Alpha Gemma Beta

Sales demand 2500 3400 5100

Time required
1 1 0.5
on moulding machine (Hours)

Time required
0.5 1 0.5
on Packaging machine (hours)

All three products require the use of two types of machines: moulding
machine and packaging machine. Moulding Machine has a total capacity
of 8,000 hours per year and packaging machine has a capacity of 5,000
hours per year.

Which machine is a limiting factor?

Selected Answer: [None Given]

Answers:
Both machines

None of the machines

Moulding machine
 Packaging machine

 Question 24
0 out of 4 points
The Board of Directors of Henderson Ltd, which operates solely in the
UK, has recently made the following decisions:

1- To move the company’s operations within five years from the

distribution of goods to the manufacture of goods.
2- To carry out repairs to the car park surrounding the head office
following a recent flood.
3- To begin a sales drive in France, following the success of a recent
sales drive in the north of the UK.

Which of the decisions would you classify as an operational matter?

Selected Answer: [None Given]

Answers: Decision 3

Decision 1

Decision 2
None of the above

 Question 25
0 out of 4 points
Which of the following best describes a variable cost? A cost which:
Selected Answer:
Represents a fixed proportion of total costs

Answers:
Has a direct relationship with output
Remains at the same level year after year
Remains at the same level when output increases
 Represents a fixed proportion of total costs

Sunday, 28 November 2021 18:35:47 o'clock GMT