UEH Trắc nghiệm kế toán quản trị 2 CLC thầy Thiện

KIỂM TRA GIỮA KỲ
1. The best description of flexible budget is:
a. A budget which improved lead time between the preparation of the master budget and the
commencement of the budget period.
b. A rolling budget which is reviewed quarterly, and updated accordingly.
c. A budget which is designed to change as volume of activity changes on the basis of
analyzing the cost behavior patterns.
d. A twelve-month period budget which includes semi-variable overhead costs only.
2. Information on the static budget and actual result as follows:
Static Budget
(12,000 units)

Actual Results
(11,200 units)

Revenue

600,000

571,200

Variable costs

144,000

145,600

Fixed costs

70,000

69,500

Net income

386,000

356,100

Net income on the flexible budget is: $355,600
CM = 600,000 – 144,000 = 456,000
CM/unit = 456,000/12,000 = $38
=> fixed dựa theo số lượng thực tế = 38*11200=355,600
3.Given the following statement:
(i): ROI and RI are tools for evaluating the performance of the profit center
(ii): Net income is a tool to evaluate management performance of divisional managers.
(iii): For long-term decision about which segment should be expanded its production and sales to
achieve the highest overall target profit, the basis of making decision is the segment’s contribution
margin ratio.
Which statement(s) is/are correct?
a. (i) and (iii)
b. None of the above statements is correct.
c. (i) and (ii)
d. (i),(ii) and (iii)
4.The A company prepares a cash budget for the year 20x3. The balance in trades receivable on
1/1/20x2 is $460,000. The budgeted sales for the year 20x2 is $5,400,000, evenly estimated each
month of the year. Sales at A company are normally collected as follows: 20% in the month of sale;
80% in the month following the sales. Total cash receipts in the year 20x2 are expected to be:
$5,500,000 = 460,000 + 5,400,000 – 5,400,000/12*80%
5. Which of the following statements is/ are true? (1) - Kaizen costing method is based around
a calculation involving a desired profit margin and a competitive market price; (2)-An

important characteristic of total quality management is a focus primarily on internal customers
and continuous improvement measures. Statement (1) is true and statement (2) is false
6. If the operating asset turnover increased by 50 percent and the margin increased by 50
percent, the ROl would increase by: 125 percent. (1.5x1.5 = 2.25 => increase 1.25)
7. What is the purpose of a flexible budget?
a. To eliminate cyclical fluctuations in production reports by ignoring variable costs


b. To reduce the total time in preparing the annual budget
c. To allow management some latitude in meeting goals
d. To compare actual and budgeted results at virtually any level of production
8. The component division (Division C) of a company, CE, Widget manufactures, which it can sell
either to Division E which uses the components to make electronic goods, or externally into a
perfectly competitive market. Demand for the component is such that Division C is working at fully
capacity. Components sold to external market require addition packaging at cost of $3 per unit.
Production cost per unit before taking account of the packaging costs are: prime cost $4. variable
production cost: $6 and allocated fixed production overhead: $7. The external market price for
components s $25 per unit. What price would CE prefer Division C to use when selling components
to Division E? $22
9.Tasty Pty distributes pizza ingredients. Its ABC system has 5 activities:
Order processing : $ 40 per order
Line - item ordering : $ 3 per line item
Store deliveries : $ 50 per store delivery
Carton deliveries : $ 1 per carton
Shelf - stocking : $ 16 per stocking - hour
The controller wants to examine the individual customer profitability of two customer :
D Cafe

R Pizza

Total orders

14

11

Average line items per order

8

16

Total store deliveries

7

11

Average cartons shipped per store delivery

22

20

Average hours of shelf - stocking per store delivery

0

0.5

Average revenue per delivery

$2,400

$1,800

Average cost of goods sold per delivery

$2,100

$1,650

The carton delivery charge for D Cafe is : $154 = 7 store deliveries*22 average cartons*$1
10. The K operates a standard costing system at 200.000 units of budgeted output. The budgeted
fixed manufacturing overhead of $ 1,000,000 was $ 300,000 lower than the actual cost (U). Total
fixed manufacturing overhead variance was $100,000 unfavorable. The actual level of
production was : 240,000 units
The total FOH variance = actual cost – applied cost
= 1.300.000 – 1.000.000/200.000*X = 100.000 => X = 240.000 units
11. A budget should /can do all of the following, except
a. Become the performance standard against which firms can compare the actual results
b. Be prepared by managers from different functional areas working independently of
each other
c. Be adjusted if new opportunities become available during the year
d. Help management allocate limited resources
12. When machine hours are used as cost allocation base, the item most likely to contribute to
an unfavorable variable overhead efficiency variance is:
a. Using more machine hours than budgeted

b. More units being produced than planned
c. Unused capacity
d. Workers wastefully using variable overhead items
13. Budgeted sales of Y for June are 20,000 units. At the end of the production process for Y,
10% of the production units are scrapped as defective. Opening inventories of Y for June are
budgeted to be 11,000 units and closing inventories will be 9,000 units. All inventories of finished
goods must have successfully passed the quality control check. What is the production budget
for Y in June? 20,000 units
10% scrapped => budget phải là 22,000 để bù scap
Unit produced = 22,000 – 9,000 + 11,000 = 20,000
14. Which of the following statements about transfer pricing is not true?
a. If the selling division has spare capacity, the transfer price should be the marginal cost of
production
b. The most efficient transfer price will be the opportunity cost of the selling division
c. If the selling division has no spare capacity, the transfer price should be the marginal cost of
production, plus any lost confibution
d. The transfer price should match the selling division's cost of capital to customer
15. Tasty Pty distributes pizza ingredients. Its ABC system has 5 activities:
Order processing: $40 per order
Line-item ordering: $3 per line item
Store deliveries: $50 per store delivery
Carton deliveries: $1 per carton
Shelf-stocking: $16 per stocking-hour
The controller wants to examine the individual customer profitability of two customer.
D Cafe

R Pizza

Total orders

14

11

Average line items per order

8

16

Total store deliveries

7

11

Average cartons shipped per store delivery

22

20

Average hours of shelf stocking per store delivery

0

0.5

Average revenue per delivery

$2,400

$1,800

Average cost of goods sold per delivery

$2,100

$1,650

The line-item ordering cost for R Pizza is: $528 =11 orders*16 line items*$3
16. Which of the following is the advantage of just-in-time control system?
a. It is easier to switch suppliers
a. Labour becomes less important
b. There is a reduced reliance on suppliers
c. The quality of production improves
Câu 17: During October, 10,000 direct labor hours were worked at a standard cost of $10 per
hour. If the direct labor rate variance for October was $4,000 U, the actual cost per direct labor
hour must be: $10.40 AH(AR – SR) = 10,000*(AR – 10) = 4,000 => AR = 10.4
Câu 18:In which of the following situations would the use of the imposed budgets not be
appropriate?
a. In decentralized organizations and acting autonomously
b. In a very small business


c. During the crisis period when the organization’s survival is challenging
d. During the period of economic hardship such as Covid - 19
Câu 19:The S Import is a distributor of blank DVDs. M Record purchases blank DVDs from S
Import at $5.00 per DVD. DVDs are shipped in packages containing 25 DVDs. S Import pays
all incoming freight. M Record has an annual demand of 104,000 (d) blank DVDs. Sales are

constant at a rate of 2,000 blank DVDs per week. M Record earns 15% on is cast investment.
The purchase order lead time is 1 week. Relevant ordering costs per purchase order is $94.50
(c) and carrying costs per package per year $3.50 (h). What is the economic order quantity?
188 packeges
√

2 × 2000 × 52 ÷ 25 × 94.5
3.5 + (15% × 5 × 25)

Câu 20:which of the following is the best description of an investment centre?
a. a centre in which managers has control over only for finacial outputs in form of generating
sales revenue
b. a centre in which managers has control over for profit
c. a centre in which managers has control over only for costs
d. a centre in which mangers has control over for costs, revenues and current as well non current operating assets.
Câu 21: During September, 40,000 units of product were produced. The standard quantity of
material allowed per unit was 4 pounds at a standard cost of £ 6.00 per pound. If there was a
unfavorable materials usage variance of £ 30,000 for September, the actual quantity of
materials used must be:
165,000 pounds: SP*(AQ – SQ) = 6*(AQ – 4*40,000) = 30,000 => AQ = 165,000
Câu 22: The following dates apply to a specific order processed by B Ltd: Order placed by
customer: 27 June; Order received: 2 July; Order placed on production: 5 July; Production
commenced: 11 July; Order completed: 17 July; Order delivered to customer: 20 July. What is
the order receipt time and the waiting time?
The order receipt time: 5 days - the waiting time: 6 days
27/6 – 2/7: 5 days – order receipt time; 5/7 – 11/7: 6 days – waiting time
Câu 23: Company AA uses the residual income method to appraise the performance of
divisional managers. From the options below, select the FALSE statement in this context.
a. Residual income can be adjusted to account for different levels of risk
b. It is a profit-based measure, so may be subject to accounting manipulation

c. It encourages divisional managers to be focused on long-term results
d. It favours divisions which have older asset bases
Câu 24: Division Z manufactures chemicals. It sells chemicals to the external market at a price
of $22 per litre. This provides a contribution/sales ratio of 40%. Division X (a separate part of
the same group company) requires a regular supply of chemicals in order to manufacture their
own products. For external sales, variable cost includes $1.20 per litre for extra courier charges.
These are not applicable to internal sales. Z has sufficient capacity to meet all internal and
external demand. Which price range would maximise profit from the company's perspective?
a. $1.20 - $22
b. $22 - $23.20
c. $12 - $22
d. $13.20 - $22
Câu 25: Mike is the newly appointed management accountant of an engineering company. The
company has three key customers. He wants to undertake customer profitability analysis. The
following information is available for the three key customers:


D

E

F

Gross margin

2,500,000

1,500,000

1,550,000

Sales visits

70

95

400

Orders placed

3,000

3,000

1,700

Invoices raised

1,900

1,200

1,700

Additional information:
Sales visits

$450 per visit

Order processing

$30 per order placed

Dispatch costs

$45 per order placed

Credit control costs

$160 per invoice

How would Mike rank the three customers?
a. Rank 1 - Customer F, Rank 2 - Customer D, Rank 3 - Customer E
b. Rank 1 - Customer D, Rank 2 - Customer E, Rank 3 - Customer F
c. Rank 1 - Customer F, Rank 2 - Customer E, Rank 3 - Customer D
d. Rank 1 - Customer D, Rank 2 - Customer F, Rank 3 - Customer E
Câu 26: Jacko Ltd uses standard absorption costing and the following information was
recorded by the company for April:
Budget

Actual

Output and sales (units)

6,500

6,000

Selling price per unit

€22

€26

Variable cost per unit

€8

€8

Total fixed overheads

€29,250

€33,000

The fixed overhead volume variance for April was: €2,250 adverse
FOH/u (budget) = $4.5; sales variance = 500 (A) => 500*4.5 = 2,250 (A)
Câu 27: R Plc is preparing its cash budget for next year. The estimated accounts payable
balance at the beginning of next year is $54,000. The budgeted purchases for next year are
$680,000, occurring evenly throughout the year. It is estimated that 75% of purchases will be
on credit and the remainder will be for cash. The company pays for credit purchases in the
month following purchase. The budgeted cash payments to suppliers next year are:
$691,500 = 54,000 + 680,000 – 680,000/12*75%
Câu 28: Which of the following statements about the fixed production overhead volume
variance is true?
a. It does not exist in a standard marginal costing system
b. It is the same in a standard marginal costing system as in a standard absorption costing system
c. It is the difference between budgeted overhead expenditure and actual overhead expenditure

d. It does not exist in a standard absorption costing system


Câu 29: Select the one which would not be an example of an internal failure cost for an
organisation.
a. Re-inspection of goods after defects have been found in production
b. Scrap of materials and work-in-progress
c. Failure analysis and correction of defects found in production
d. Training staff to reduce defects during the production process (prevention cost)
Câu 30: From the options below, select the best explanation of a favourable labour rate
variance.
a. A strike occurred during the production
b. All are possible explanations
c. There was a general increase in wages
d. A lower grade of worker was used
Câu 31: Choose the correct term for the below definition: “A budget set prior to the control
period, and not subsequently changed in response to changes in activity or costs or revenues.”
a. Participative budget
b. Flexible budget
c. Fixed budget
d. Top-down budget
Câu 32: From the options below, choose the ONE feature that is a possible downside of both
Residual Income (RI) and Return On Investment (ROI) in measuring divisional performance.
a. Both measures can encourage divisional managers to manipulate both profit and capital
employed figures
b. Both figures do not facilitate comparisons among different divisions
c. Both figures do not take into account the cost of capital of an organisation
d. Both measures encourage divisional managers to keep a hold of old and possibly inefficient
assets
RI and ROI can be manipulated by divisional managers either by manipulating the capital employed or profit figure for a

division.
ROI encourages managers to keep a hold of old assets, however RI does not have this issue.
RI takes into consideration the firm’s cost of capital but the ROI does not.
RI does not facilitate comparisons with other divisions or organisations because it is an absolute figure. ROI is a relative
measure so it can be used to compare the performance of a division against other divisions in the firm.

Câu 33: N Plc is a company manufacturing graphics cards for computers and laptops. The
organisation has recently discovered a new material that significantly increases the capacity of
the firm’s cards. The organisation has recently filed to get this new technology patent protected.
From the options below, select the category of the balanced scorecard within which this
development fits.
a. Learning and growth
b. Financial
c. Internal business process
d. Customer
Câu 34: Sara Ltd operates a standard marginal costing system. An extract from the standard
cost card for the labour costs of one of its products is as follows: Labour cost (standard): 5
hours x £12 = £60. Actual results for the period were as follows: Production: 11,500 units;
Labour rate variance: £45,000 adverse; Labour efficiency variance: £30,000 adverse. Calculate
the actual rate paid per direct labour hour. £12.75
SR(AH – SH) = 12(AH – 5) = 30,000 => AH = 60,000
AH(AR– SR) = 45,000 = 60,000(AR– 12) => AR = 12.75
Câu 35: Companies employ the strategy of Just-in-Time (JIT) inventory to increase efficiency
and decrease waste by receiving goods only as they are needed in the production process,
thereby reducing inventory costs. From the options below, select the ONE cost that a company
is likely to reduce by introducing a JIT system.


a. Inventory holding costs
b. Purchasing costs

c. Informational system costs
d. Ordering costs
Câu 36: E Ltd has the following information available concerning its inventory items, as
follows: Relevant ordering costs per purchase order: $450; Relevant carrying costs per year for
each package includes the opportunity cost of 15% return on investment and the other costs of
$4 per year. Annual demand is 30,000 packages per year. The purchase price per package is
$48. What is the annual relevant carrying costs at the economic order quantity? $8,695
𝑄=√

2 ∗ 30,000 ∗ 450
= 1552 (𝑝𝑎𝑐𝑘𝑎𝑔𝑒𝑠)
4 + (15% ∗ 48)

annual relevant carrying costs = Q/2*(4 + 15%*48) = 8,695
Câu 37: Thomas is the manager of Division Z in a big conglomerate Win Inc. Division Z is
operating at full capacity and can sell everything produced either internally or externally. From
the options below, select the basis on which Thomas will fix the transfer price of Division Z.
a. Current selling price plus opportunity costs
b. Full cost plus a mark-up
c. Market price
d. Variable costing
Câu 38: A Ltd is preparing the master budget for one of their products, the KING product, for
the forthcoming year, as follows: Sales demand in units: 50,000; Material usage per unit: 8 kgs;
Estimated opening inventory: 10% sales demand; Required closing inventory: 40% higher than
opening inventory. How many units of the KING product will need to be produced? 52,000
Opening = 5,000; closing = 7,000 => produced = 50,000 + 7,000 – 5,000 = 52,000
Câu 39: The following budgeted information comes from the accounting records as follows:
Sales units

1,200

Sales revenue

$120,000

Direct material

48,000

Direct labour

24,000

Variable overhead

18,000

Fixed overhead

12,000

Profit

18,000

In a period where the actual sales were 1,900 units, what would be the flexed budget?
$35,500 (chia rồi tính lại tất cả cost theo 1,900 units)
Câu 40: One of the leading managers in Pantheon Ltd is Kari. Kari is known for her ability to
motivate employees and drive sales in any area she is responsible for. Kari’s bonus for this year
will depend on her ability to increase the residual income of her area of responsibility. What

responsibility structure is Kari most likely the manager of? Investment centre
Câu 41: K Corporation has provided the following summary of its quality cost report for the
last two years:


This year

Last year

Prevention costs

$200,000

$300,000

Appraisal costs

210,000

315,000

Internal failure costs

190,000

114,000

External failure costs

800,000

621,000

On the basis of this report, which one of the following statements is most likely correct?
a. All statements are incorrect
b. Quality costs such as scrap and rework increased by 29%
(190,000/114,000 = 167% => increase 67%)
c. A decrease in internal and external failure costs resulted in less need for prevention and
appraisal costs (thực tế là increase)
d. An decrease in prevention and appraisal costs resulted in fewer defects, and therefore, resulted
in a decrease in internal and external failure costs
 An decrease in prevention and appraisal costs resulted in HIGHER defects, and therefore,
resulted in a INCREASE in internal and external failure costs
CHƯƠNG 1
1. A company manufactures a single product, M. Budgeted production output of product M
during August is 200 units. Each unit of product M requires 6 labour hours for completion and
PR Co anticipates 20 per cent idle time. Labour is paid at a rate of $7 per hour. What is the
direct labour cost budget for August? $10,500
Active hours required = 200*6 = 1,200
20% idle time = 25% active time = 1,200*25% = 300 => total cost = (1,200 + 300)*7 = 10,500
2. Using linear regression, the relationship between the monthly quantity produced (x) and total
production cost Có was found to be y = 10,000 + 216x. The only variable costs are raw materials
and labour. Last month, 700 units were made and raw materials cost $150 per unit. Labour is
paid at $15 per hour. Estimate the variable production cost if output is 500 units.
$108,000 = 216*500 (vì 10,000 là fixed costs)
3. Each unit of product Echo takes five direct labour hours to make. Quality standards are high,
and 8% of units are rejected after completion as sub-standard. Next month’s budgets are as
follows: Opening inventories of finished goods: 3,000 units. Planned closing inventories of
finished goods: 7,600 units. Budgeted sales of Echo: 36,800 units. All inventories of finished
goods must have successfully passed the quality control check. What is the direct labour hours

budget for the month? 225,000 hours
Budgeted produced = 36,800 + 7,600 – 3,000 = 41,400
92% of total production, allowing for an 8% rejection rate => 41,400/0.92 = 45,000
direct labour hours budget = 45,000*5 = 225,000 hrs
4. Budgeted sales of X for December are 18,000 units. At the end of the production process for
X, 10% of production units are scrapped as defective. Opening inventories of X for December
are budgeted to be 15,000 units and closing inventories will be 11,400 units. All inventories of
finished goods must have successfully passed the quality control check. What is the production
budget for X for December? 16,000 units
Budgeted produced = 18,000 + 11,400 – 15,000 = 14,400
10% of production units are scrapped = 1/9 của output = 14,400/9 = 1,600
=> total = 14,400 + 1,600 =16,000


5. The finance manager for Halfway Ltd is responsible for preparing the following reports for
the firm:
(I) Statement of profit or loss
(II) Statement of financial position
(III) Cash flow forecast for the next 5 years
(IV) Sales budget for the next 5 years
(V) Monthly operating statements for 3 of Halfway’s divisions.
Which of these is/are an example of feedforward control? III & IV only
6. Furniture, Inc., estimates the following number of mattress sales for the first four months of
20x6: January: 22,000; February: 30,800; March: 28,600; April: 35,200. Finished goods
inventory at the end of December is 6,600 units. Target ending finished goods inventory is 20%
of the next month’s sales. How many mattresses should be produced in the first quarter of 20x6?
81,840 mattresses = 22,000 + 30,800 + 28,600 + 35,200*20% - 6,600
7. R Plc. Is preparing its cash budget for next year. The accounts receivable at the beginning of
next year are expected to be $46,000. The budgeted sales are $540,000 and will occur evenly
throughout the year. 80% of the budgeted sales will be on credit and the remainder will be cash

sales. Credit customers pay in the month following sale. The budgeted cash receipts from
customers next year are: $550,000 = 540,000 + 46,000 – 540,000/12*80%
8. From the options below, select the purpose of a monthly cash budget.
a. to determine whether there will be sufficient cash in the bank to meet requirements
b. to determine next month’s sales volumes
c. to determine the amount of inventory to purchase in the following month
d. to determine when to pay workers’ wages
9. Projected sales for Sommers, Inc., for next year and beginning and ending inventory data
are as follows: Sales: 50 000 units; Beginning inventory: 4 000 units; Desired ending inventory:
8,000 units. The selling price is £40 per unit. Each unit requires four pounds of material which
costs £6 per pound. The beginning inventory of raw materials is 12 000 pounds. The company
wants to have 3000 pounds of material in inventory at the end of the year. Sommers’ budgeted
total purchase cost of direct materials would be: £1,242,000
Unit produced = 50,000 + 8,000 – 4,000 = 54,000
=> total materials need = 54,000*4 + 3,000 – 12,000 = 207,000
=> total purchase cost = 207,000*6 = 1,242,000
10. B Corporation is working on its direct labor budget for the next two months. Each unit of
output requires 0.05 direct labor-hours. The direct labor rate is $7.50 per direct labor-hour.
The production budget calls for producing 9,100 units in May and 8,800 units in June. If the
direct labor work force is fully adjusted to the total direct labor-hours needed each month, what
would be the total combined direct labor cost for the two months?
$6,712.50 = (9,100 + 8,800)*0.05*7.5
11. Which of the following is true of master budgets?
a. They aid in quantifying the expectations of all stakeholders
b. They include only financial aspects of a plan and exclude nonfinancial aspects
c. They aid in coordinating what needs to be done to implement a plan
d. They must be administered rigidly after they are committed to
12. Which of the following are most likely to lead to ethical issues when setting and using a
budget?
a. The use of interdivisional trade to reduce the tax liability budget for the entire organisation

b. Internal politics leading to some divisions having more challenging targets than others
c. Reducing the quality of the organisation’s products in order to increase profits for the budget
period
d. Incentivising managers with rewards based on the achievement of non-financial targets
e. Reducing learning and development costs in order to satisfy shareholder’s demands for profit
maximization
13. From the options below, ONE item that should not be included in the cash budget.
a. Gain on the disposal of a piece of machinery
b. Receipt of interest from short term investments
c. Payment of tax due on last year’s profits
d. Repayment of the capital amount of a loan
18. The Waverly Company has budgeted sales for next year as follows: Sales in units: 1st
Quarter – 12,000; 2nd Quarter – 14,000; 3rd Quarter – 18,000; 4th Quarter – 16,000. The
ending inventory of finished goods for each quarter should equal 25% of the next quarter’s
budgeted sales in units. The finished goods inventory at the start of the year is 3,000 units.
Scheduled production for the third quarter should be:
17,500 = 18,000 + 16,000*25% - 18,000*25%
19. the one that shows the right combination of financial statements that would be included in
a master budget: A budgeted profit and loss account, balance sheet and cash flow statement
20. The S Company makes and sells a single product, Product R. Budgeted sales for May are
$300,000. Gross Margin is budgeted at 30% of sales dollars. If the net income for May is
budgeted at $40,000, the budgeted selling and administrative expenses are:
$50,000 = 300,000*30% - 40,000
21. From the options below, select the best definition of a flexible budget: A budget which shows
costs and revenues at different activity levels
22. The below details have been extracted from the accounts payable records of Q Plc:
- Invoices paid in the month of purchase*: 15% of total value;
- Invoices paid in the first month after purchase: 65% of total value;

- Invoices paid in the second month after purchase: 20% of total value.
This pattern of payments is expected to continue in the future and has been used to produce the
company’s cash budget for October to December.
Purchases for October to December are budgeted as follows: October: $140,000; November:
$125,000; December: $150,000. *) A settlement discount of 5% is taken on invoices paid in the month
of purchase.
The amount budgeted to be paid to suppliers in December is:
$130,625
24. Tucker’s sales budget is as follows: January: €182,000, February: €320,000, March:
€354,000. 20% of sales are paid for immediately in cash. Of the credit customers, 40% in the
month following the sale and are entitled to a 2% discount. The remaining customers pay two
months after the sale is made. What is the value of sales receipts shown in the company’s cash
budget for March?
€258,512
25. Which of the below statements are TRUE? (ii) and (iv)
(i) Bottom up budgeting is sometimes referred to as non-participatory budgeting;
(ii) The level of employee involvement in bottom up budgeting is compatible with attitudes towards
staff within a traditional just-in-time philosophy;


(iii) Management are less likely to be motivated by involvement when consulted in setting their
department targets;
(iv) Bottom up budget figures are more likely to be realistic and take into account any new
information at the operational level;
(v) Bottom up budgeting is an ideal approach to use when budgeting must be planned and
implemented quickly.
26. From the options below, select the best definition of the term ZBB (Zero Based Budgeting):
It is a method of budgeting whereby all activities are re-evalulated each time a budget is formulated
27. Castil Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 2.5
kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the next five months

is as follows: August: 20,00 units, September: 20,900 units, October: 20,800 units; November: 20,600
units, December: 21,300 units. The company wants to maintain monthly ending inventories of
Jurislon equal to 20% of the following month’s production needs. On July 31, this requirement was
not met since only 9,700 kilograms of Jurislon were on hand. The cost of Jurislon is $5.00 per
kilogram. The company wants to prepare a Direct Materials Purchase Budget for the next five months.
The total cost of Jurislon to be purchased in August is: $253,750
28. The budget where managers must justify all costs based on need is a/ an: zero-based budget
29. R Plc is a specialist manufacturer of a particular type of valve used in pumps. Analysis for
the year shows that, when the budgeted level of sales was 15,000 units with a selling price of £250 a
unit, the margin of safety was 25%. The budgeted contribution to sales ratio of the product was 60%.
Budgeted fixed costs for the year were: £1,687,500
30. J Ltd has budgeted production for the next budget period at 50,000 units. Each production
unit requires 3 direct labour hours and the budgeted labour hour rate is $10 per hour excluding the
overtime. The company expects idle time at 20% of the total hours available. Due to a labour shortage,
the company expects that 30% of the hours paid (including the idle time) will be paid at an overtime
rate of time and a half. The budgeted labour cost for the period is: $2,156,250
31. Castil Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 2.5
kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the next five months
is as follows: August: 20,00 units, September: 20,900 units, October: 20,800 units; November: 20,600
units, December: 21,300 units. The company wants to maintain monthly ending inventories of
Jurislon equal to 20% of the following month’s production needs. On July 31, this requirement was
not met since only 9,700 kilograms of Jurislon were on hand. The cost of Jurislon is $5.00 per
kilogram. The company wants to prepare a Direct Materials Purchase Budget for the next five months.
The desired ending inventory of Jurislon for the month of September is:$52,000
32. E Plc is preparing its cash forecast for the next three months. From the options below, select
the ONE item that should be left out of its calculations.
a. Receipt of a new bank loan raised for the purpose of purchasing new machinery
b. Tax payment due, that relates to last year’s profits
c. Expected gain on the disposal of a piece of land
d. Rental payment on a leased vehicle

33. A problem with feed-forward control is that control reports should be produced regularly, which
means that forecasts must be updated regularly. TO implement a/ an efficient feed-forward control
system, it is therefore necessary to have an efficient forecasting system.


CHƯƠNG 2
1. An unfavorable variance indicates that ________.
a. the actual units sold are less than the budgeted units
a. the actual costs are less than the budgeted costs
b. the budgeted contribution margin is more than the actual amount
c. the actual revenues exceed the budgeted revenues
2. An unfavorable price variance for direct materials might indicate ________.
a. that the market had an unexpected oversupply of those materials
b. that the purchasing manager skillfully negotiated a better purchase price
c. that the purchasing manager purchased in smaller quantities due to a change to just-intime inventory methods
d. congestion due to scheduling problems
3.When a flexible budget is used, a decrease in the actual production level within a range of
activity would:
a. increase variable cost per unit
b. decrease variable cost per unit
c. decrease total variable costs
d. decrease fixed cost per unit
4.Lesinski Snow Removal’s cost formula for its vehicle operating cost is $1,770 per month plus
$483 per snow-day. For the month of February, the company planned for activity of 19 snow-days,
but the actual level of activity was 24 snow-days. The actual vehicle operating cost for the month was
$13,070. The spending variance for vehicle operating cost in February would be closest to:
$292 F
5. Standahl Air uses two measures of activity, flights and passengers, in the cost formulas in its
budgets and performance reports. The cost formula for plane operating costs is $39,590 per month
plus $2,649 per flight plus $4 per passenger. The company expected its activity in August to be 82

flights and 294 passengers, but the actual activity was 85 flights and 297 passengers. The actual cost
for plane operating costs in August was $255,690. The activity variance for plane operating costs
in August would be closest to:
$7,959 U
6.Variance analysis should be used ________.
a. to punish employees that do not meet standards
b. to understand why variances arise and to improve future performance
c. to set the standards which are very easy to achieve to encourage employees to focus on
meeting standards
d. as the sole source of information for performance evaluation
7. Lander Corporation used the following data to evaluate their current operating system. The
company sells items for $18 each and used a budgeted selling price of $18 per unit. Units sold: 41,000
units (Actual), 40,000 units (Budgeted); Variable costs: $164,000 (Actual), $156,000 (Budgeted);
Fixed costs: $46,000 (Actual), $48,000 (Budgeted). What is the static-budget variance of
revenues?
$18,000 favorable
8.A company has a policy “investigate all variances exceeding $3,000 or 15% of the budgeted
cost, whichever is lower.” There is a variance of $2,000 in repair and maintenance costs of
$12,000. What does the company do in the given situation?
a. It should be considered an in-control occurrence.
b. It should be investigated as all variances are equally important.
c. It should be ignored as it is less than $3,000.


d. It deserves more attention as it is more than 15% of total repair cost.
9.Buckson Framing’s cost formula for its supplies cost is $1,350 per month plus $18 per frame. For
the month of June, the company planned for activity of 716 frames, but the actual level of activity
was 713 frames. The actual supplies cost for the month was $14,820. The supplies cost in the flexible
budget for June would be closest to:
$14,184

10.Which of the following can be a reason for a favorable price variance for direct materials?
a. workers taking less time to produce the products
b. a decrease in the price of materials due to an oversupply of materials
c. an unexpected increase in the price of materials
d. less amount of material used during production than planned for actual output
11.Loughry Catering uses two measures of activity, jobs and meals, in the cost formulas in its
budgets and performance reports. The cost formula for catering supplies is $530 per month plus $114
per job plus $16 per meal. A typical job involves serving a number of meals to guests at a corporate
function or at a host’s home. The company expected its activity in October to be 25 jobs and 234
meals, but the actual activity was 20 jobs and 233 meals. The actual cost for catering supplies in
October was $6,600. The catering supplies in the flexible budget for October would be closest
to: $6,538
12.The activity measure for overhead allocation should be one:
a. that follows a fixed pattern
b. that has a magnitude that never changes
c. that is always based on units produced, not on hours used
d. that varies in a similar pattern to the way that variable overhead varies
13.Regier Company had planned for operating income of $10 million in the master budget but
actually achieved operating income of only $7 million.
a. The static-budget variance for operating income is $3 million unfavorable.
b. The flexible-budget variance for operating income is $3 million favorable.
c. The static-budget variance for operating income is $3 million favorable.
d. The flexible-budget variance for operating income is $3 million unfavorable.
14.Gladstone Footwear Corporation’s flexible budget cost formula for supplies, a variable cost, is
$2.83 per unit of output. The company’s flexible budget performance report for last month showed a
$9,555 unfavorable spending variance for supplies. During that month, 19,500 units were produced.
Budgeted activity for the month had been 19,300 units. The actual cost per unit for indirect
materials must have been closest to: $3.32
15.Velten Corporation’s flexible budget performance report for last month shows that actual indirect
materials cost, a variable cost, was $45,198 and that the spending variance for indirect materials cost

was $9,114 favorable. During that month, the company worked 18,600 machine-hours. Budgeted
activity for the month had been 19,000 machine-hours. The cost formula per machine-hour for
indirect materials cost must have been closest to:
$2.92
16.Reuer Midwifery’s cost formula for its wages and salaries is $2,900 per month plus $475 per
birth. For the month of March, the company planned for activity of 116 births, but the actual
level of activity was 117 births. The actual wages and salaries for the month was $56,270. The
activity variance for wages and salaries in March would be closest to:


$475 U
17. The static budget is always:
a. based on a range of activity within which the firm may operate
b. based on maximum capacity
c. the same as a flexible budget
d. based on a specific planned activity level
18. Which of the following statements is true?
a. In a normal costing system, standard costs are used for cost control and normal costs are used
for product costing.
b. In a standard costing system, standard costs can only be used for product costing.
c. In a standard costing system, standard costs are used for both cost control and product
costing.
d. In a standard costing system, standard costs can only be used for cost control.
19. An unfavorable efficiency variance for direct manufacturing labor might indicate that
a. there is unexpected increase in direct labor rates
b. lower-quality materials were purchased
c. more higher-skilled workers were scheduled than planned
d. work is scheduled inefficiently
20. Lander Corporation used the following data to evaluate their current operating system. The
company sells items for $18 each and used a budgeted selling price of $18 per unit. Units sold: 41,000

units (Actual), 40,000 units (Budgeted); Variable costs: $164,000 (Actual), $156,000 (Budgeted);
Fixed costs: $46,000 (Actual), $48,000 (Budgeted). What is the static-budget variance of variable
costs?
$8,000 unfavorable
21. Dunklin Medical Clinic measures its activity in terms of patient-visits. Last month, the budgeted
level of activity was 1,620 patient-visits and the actual level of activity was 1,540 patient-visits. The
cost formula for administrative expenses is $3.20 per patient-visit plus $14,300 per month. The actual
administrative expense was $21,050. In the clinic’s flexible budget performance report for last month,
the spending variance for administrative expenses was:
$1,822 U
CHƯƠNG 3
1.From the options below, select the statement that best describes a basic standard.
a. All are incorrect.
b. A standard which is based on current price levels.
c. A standard which assumes an efficient level of operation, but which includes allowances for
factors such as normal loss, waste and machine downtime.
d. A standard which is kept unchanged over a period of time.
e. A standard set at an ideal level, which makes no allowance for normal losses, waste and
machine downtime.
2. K has the following budget and actual data:
- Budget fixed overhead cost: $1,248,480
- Budget production (units): 20,400
- Budget labour hours: 104,040
- Actual fixed overhead cost: $1,366,620
- Actual production (units): 20,000
- Actual labour hours: 100,000


The favourable fixed overhead efficiency variance is - $___24,000____
3. Harvey LTD uses standard absorption costing and in September, the below information was

recorded.
Budget

Actual

Output and sales (units)

13,600

12,400

Selling price per unit

$30

$32

Variable cost per unit

$12

$12

Total fixed overhead

$29,600

$30,200

The sales price variance for September was: $24,800 Favourable

4. 4Es Ltd. repairs and refinishes antique furniture. Manufacturing overhead at 4Es is applied
to production on the basis of standard direct labor-hours.
Which overhead variance(s) at 4Es would be unfavorably affected if a significant amount of glue is
being wasted by inexperienced direct labor workers? - variable overhead spending variance
Which overhead variance(s) at 4Es would be unfavorably affected if the cost of solvents used to strip
the old paint and varnish from the furniture unexpectedly doubles in price? - variable overhead
spending variance
Which overhead variance(s) at 4Es would be favorably affected if the actual direct labor-hours
incurred are less than the standard direct labor-hours allowed for output? - variable overhead
efficiency variance
5. The materials price variance for the month of January was $2,000 (F) and the usage variance
was $450 (F). The standard material usage per unit is 6 kg, and the standard material price is $3.00
per kg. 600 units were produced in the period and there was no change in inventory levels during the
period. Material purchases in the period were 3450kg
6. A company operates a standard absorption costing system. The following fixed production
overhead data are available for the latest period:
- Budgeted Output: 6,000 units
- Budgeted Fixed Production Overhead: £30,000
- Actual Fixed Production Overhead: £39,000
- Fixed Production Overhead Total Variance: £3,000 adverse
The actual level of production for the period was nearest to:
a. All are incorrect
b. 9,700 units
c. 12,000 units
d. 7,000 units
e. 7,400 units
7. Which of the statement(s) below is/ are correct? (Chọn nhiều đáp án)
a. Responsibility for the overhead efficiency variance should be assigned to whoever is
responsible for control of the activity base underlying the flexible budget.
b. A favorable variable overhead efficiency variance indicates that overhead has been used

efficiently.
c. In a standard cost system, overhead is applied on the basis of the actual level of activity rather
than the standard level of activity allowed for the output of a period.
d. The budget variance for fixed overhead represents the difference between actual fixed
overhead costs incurred and the amount of fixed overhead applied to work in process.


e. The activity base for a flexible budget should usually be expressed in units of activity
rather than in dollars.
f. The volume variance for fixed overhead is an activity-related variance based on the
difference between the denominator level of activity and the standard level of activity
allowed for the output of a period.
8. Match the variance with its most likely cause: (nối cột trái với 1 trong các đáp án cột phải)
Labour rate variance - Unexpected pay award
Material price variance - standardIncrease in costs charged by a supplier
Favourable labour efficiency variance - Improved operating procedures for assembling
workers
Material usage variance - Increased wastage due to a machine malfunction
Adverse variable overhead efficiency variance - Less experienced employees were used than
standard
9. L uses a standard costing system. The standard cost card for one of its products shows that the
product should use 6 kgs of material P per finished unit, and that the standard price per kg is $6.75.
L values its inventory of materials at standard prices.
During November x1, when the budgeted production level was 2,000 units, 2,192 units were made.
The actual quantity of material P used was 13,050 kgs and material L inventories were reduced by
500 kgs. The cost of the material L which was purchased was $72,900.
The material price and usage variances for November x1 were:
Price variance: -11,812.50 (F) - Usage variance: -688.50 (F)

10.

The difference between budgeted and actual fixed overhead expenditure. F
The difference between the standard fixed overhead cost specified in the original budget and the same
volume of fixed overheads, but at the actual prices incurred. F
The difference between the standard fixed overhead cost specified for the production achieved, and
the actual fixed overhead cost incurred. F
The difference between the budgeted value of the fixed overheads and the standard fixed overheads
absorbed by actual production. T
11. ABC Ltd's standard cost of material X which is used to assemble their final product is as
follows: 4kg @ £3.25 = £13.00. 1,500 units were produced for the period. This gave a material
usage variance of £2,438 adverse, with material stock for the period rising by 800kg.
The quantity of material purchased for this period was 7550.. kg.
12. A labor efficiency debit balance indicates that less labor time was spent on production than was
called for by the standard. F
If variable manufacturing overhead is applied based on direct labor-hours, it is impossible to have a
favorable labor efficiency variance and unfavorable variable overhead efficiency variance for the
same period. T
An unfavorable materials quantity variance occurs when the actual quantity used in production is less
than the standard quantity allowed for the actual output of the period. F
There can be no volume variance for variable overhead. T
Ideal standards may be better than practical standards when managers seek continual improvement.
F
13. RBK Ltd operates a standard absorption costing system. Details of budgeted and actual
figures are as follows:
Budget

Actual


Sales volume (units)

100,000

110,000

Selling price per unit $24

$21

Selling price per unit $17

$13

Total cost per unit

$19

$18

The favourable sales volume profit variance for the period was $60000
14. Nitche Enterprises has a standard cost system in which manufacturing overhead is applied to
units of product on the basis of standard direct labor-hours (DLHs). The company has provided the
following data concerning its fixed manufacturing overhead costs for last year:
- Total actual fixed overhead cost incurred: $42,000
- Fixed overhead cost overapplied: $6,000
- Number of units produced: 12,500
- Volume variance, unfavorable: $3,600
- Standard labor-hours per unit: 1.6 DLHs
The fixed portion of the predetermined overhead rate last year was __$2.40 per DLH___
The budgeted fixed overhead cost last year was __$51,600___
The budget variance for fixed overhead last year was __$9,600 F____

15. Saracens Ltd operates a standard marginal costing system. An extract from the standard
cost card for the labour costs of one of its products is as follows:
Labour cost (standard): 5 hours x 12 = $60
Actual results for the period were as follows:
Production: 11,500 units
Labour rate variance: $45,000 adverse
Labour efficiency variance: $30,000 adverse
The actual rate paid per direct labour was $__12.75_____
16. The following data has been extracted from the budget of XL Plc:
Activity (Machine hours)
Overhead cost (£)
2,000
£5,000
2,400
£5,800
3,600
£8,200
In November 2018, the actual activity was 2,550 machine hours and the actual overhead cost
incurred was £6,512.
The overhead expenditure variance was £ 412 Adverse.
17. The definition of the “variable production overhead efficiency variance” is set out below
with blank sections:
“Measures the difference between the variable overhead cost budget __flexed on actual labour hours
and the variable overhead cost absorbed by_output produced___.”
18. From the options below, select the one good reason NOT to investigate a variance.
a. Cost caused by the variance is less than the cost of the investigation.
b. It would investigate a £15,000 variance if the investigation itself would cost £5,000.
c. The variation is unexpected and large.
d. Cost of the investigation is less than the cost caused by variance.
e. The variation is unexpected and controllable.

19. 4Es Ltd., uses a standard cost system in which it applies manufacturing overhead to units
of product on the basis of standard direct labor-hours. During the month of September, the
company applied $52,000 in fixed manufacturing overhead cost to units of product. At the end of the


month, manufacturing overhead was overapplied by $3,000. If there was no volume variance in
September, then the budgeted fixed manufacturing overhead cost for the month was $___52,000____
20. At C Company, maintenance is a variable cost that varies directly with machine hours. The
performance report for June showed that actual maintenance costs totaled $9,600 and that the
associated spending variance was $400 unfavorable. If 8,000 machine-hours were actually
worked during June, the budgeted maintenance cost per machine-hour was:
$1.15
21. J007 is one of many items produced by H's manufacturing division. Its standard cost is based
on estimated production of 10,000 units per month. The standard cost schedule for one unit of J007
shows that 4 hours of direct labour are required at $10 per labour hour. The variable overhead rate is
$3.50 per direct labour hour. During November 2018, 11,000 units were produced:
● 56,000 direct labour hours were worked and charged;
● $504,000 was spent on direct labour;
● $220,000 was spent on variable overheads.
The direct labour rate variance for the month is $56,000 (F)
22. The budgeted selling price of one of BIS Plc’s range of cookies was $12.00 per packet of
cookies. At the beginning of the budget period market prices of sugar increased significantly and BIS
Plc decided to increase the selling price of the cookie packet by 10% for the whole period.
BIS Plc also decided to increase the amount spent on marketing and as a result actual sales volumes
increased to 31,500 packets which was 5% above the budgeted volume. The standard contribution
per packet was $4.00. However, a contribution of $4.50 per packet was actually achieved.
The sales price variance for the period was:
a. $31,400 A
b. $37,800 F
c. All are incorrect

d. $31,400 F
e. $37,800 A
23. K uses a standard costing system and has the following labour cost standard in relation to
its products : 10 hours skilled labour at $ 9.50 per hour = $ 95.00 .
During March 20x9 , 6,200 of these products were made which was 250 units less than budgeted. The
labour cost incurred was $ 596,412 and the number of direct labour hours worked was 62,890 .
The direct labour rate variance was__ 1,043 ( F )__
The direct labour efficiency variance was____8,455 ( A )__
24. Variable production overhead efficiency variance
The variable overhead cost of any change from the standard level of labour efficiency,
assuming that labour hours are being used the recovery base for variable overheads
Variable production overhead expenditure variance
The variable overhead cost of any change from the standard labour rate per hour, assuming
that labour hours are being used as the recovery base for variable overheads.
Varibale production averhead total variance
the difference between the variable overhead that should be used for actual output and
variable production overhead actually used
25. From the options below, select the statement which is not a limitation of standard costing.
a. Standard costing can not be used in a service environment
b. It focuses on quantitative measures rather than qualitative measures
c. It can result in a blame culture as department managers are held responsible for variances
d. Standard costing can not be used in a service environment


26. Which of the following statements about the fixed production overhead volume variance is
true?
a. It is the difference between budgeted overhead expenditure and actual overhead expenditure
b. It does not exist in a standard absorption costing system
c. It is the same in a standard marginal costing system as in a standard absorption costing system
d. It does not exist in a standard marginal costing system

e. All are incorrect
27. J Ltd operates a standard absorption costing system. The following fixed production
overhead data is available for one month:
● Budgeted output: 200,000 units
● Budgeted fixed production overhead: £1,000,000
● Actual fixed production overhead: £1,300,000
● Total fixed production overhead variance: £100,000 Adverse
The actual level of production was 240,000 units.
CHƯƠNG 4
1. From the options below, choose the statements which will be true when performance
measurement is most effective.
a. Internal and external aspects are evaluated together
b. Both long-term and short-term objectives are considered
c. Managers and divisions are evaluated together
d. Only aspects which can be controlled by the manager are evaluated
e. Managers and divisions are evaluated separately
2.Which of the following statements are valid criticisms of return on investment (ROI) as a
performance measure?
a. Its use may discourage investment in new or replacement assets
b. The figures needed are not easily available
c. ROI performance indicators are less likely to be manipulated than non-financial ones
d. It is misleading if used to compare departments with different levels of risk
e. It is misleading if used to compare departments with assets of different ages
3.The following information relates to last year's operations at the Paper Division of Double A
Corporation: Minimum required rate of return: 15%
Return on investment (ROI): 18%
Sales: $810,000
Turnover (on operating assets): 5 times
What was the Paper Division's net operating income last year?
ROI = margin x turnover => 18% = margin x 5 => margin = 3.6%

Margin = NOI/sales => NOI = 4.6% x 810,000 = $29,160
4. From the options below, select the ONE statement which is NOT a disadvantage of nonfinancial performance measures.
a. Non-financial performance measures can be quantified
b. They can be hard to measure
c. The causation between non-financial factors and company performance may be incorrectly
interpreted
d. They can lack comparability due to a diverse range of measures
5. An investment centre has capital employed of $1,500,000 and made a profit before interest
of $280,000. The notional cost of capital is 12%. The investment centre has an opportunity to invest
in a new project that requires an investment of $350,000. The project has a life of 5 years and expects


cash profits of $80,000 each year. It is assumed to charge depreciation on a straight line basis. In the
light of the above information, what would be the average ROI with and without the investment
and would the investment centre manager wish to undertake the investment if performance is
judged on the ROI of year 1? Option B

6. From the options below, choose the THREE potential problems associated with the balanced
scorecard approach.
a. Difficulty in interpreting the different figures from the analysis
b. It ignores the financial aspects of the business
c. It does not provide a single overall measure to assess performance
d. Difficulty in deciding on what to measure for non-financial aspects
e. It only focuses on the financial aspect of the business.
7. General Insurance Corporation (GIC) wants to monitor the customer perspective.
From the options below, select the appropriate criteria for GIC to measure and monitor the
customer perspective in the context of the balanced scorecard approach.
a. New insurance products launched in the past 6 months
b. Percentage of sales which is repeat business
c. The percentage of customers complaining

d. Staff turnover percentage
e. Earnings per share
Others: Average time to settle insurance claims; Average of satisfaction ratings from customers e.g.
quality of service from 1-5 (5 being the highest); Percentage market share
8. The R Company's income statement for May is given below:

If sales for Division L increase $30,000 with a $9,000 increase in the Division's traceable fixed
expenses, the overall company net operating income should: increase by $3,000
variable expense mới của L = 99,000*(165,000 + 30,000)/165,000 = 117,000
=> total variable expense mới = 117,000 + 54,000 = 171,000
Total Traceable fixed expense mới = 97,000 + 9,000 = 106,000
NOI mới = (300,000 + 30,000) – 171,000 – 106,000 – 25,000 = 28,000
=> NOI tăng 3,000
9. Division A of Aigburth Co is considering a project which will increase annual net profit after
tax by $30,000 but will require average inventory levels to increase by $200,000. The current
target rate of return on investments is 13% and the imputed interest cost of capital is 12%.
Based on the ROI and/or RI criteria would the project be accepted?
Chọn cả ROI và RI vì ROI mới = 30/200 = 15% > ROI bđau và > min rate of return = 12%


10. Chan Company has two divisions, S and T. The company's overall contribution margin
ratio is 30% when sales in the two divisions total $750,000. If variable expenses are $450,000 in
Division S, and if Division S's contribution margin ratio is 25%, then sales in Division T must
be: $ 150000
Sales của S: 25%*x = x – 450,000 => x = 600,000 => sales của T = 750,000 – 600,000 = 150,000
11. The Committee of Company X is meeting to talk about the different ways of measuring
performance within the company. Half of the members feel that their obligation is to provide
the best return for shareholders and so should only be looking at the financial ratios.
The other half feel that it would be better to look at the company as a whole (including all of
the non-financial aspects) using the balanced scorecard.

Match the advantages and disadvantages of each.
Advantage of balanced scorecard: Raises innovation and process improvement methods to a corporate
goal; Highlights important information in a simple form quickly
Disadvantage of balanced scorecard: Closing one gap can widen another elsewhere; Mutes the voice
of the customer
12. A company has a net profit margin of 13% and an asset turnover of 0.8 times. What is the
company’s return on investment? 10.4 % = 13%*0.8
13. From the options below, select the factor/s that would be classified under the innovation and
learning perspective of the balanced scorecard. (nhiều đáp án)
a. New products launched compared to competitors
b. Share price growth (financial perspective)
c. Percentage market share (financial perspective)
d. Economic Value Added (financial perspective)
e. Percentage of sales which is repeat business
f. Health and safety training days per employee
g. Percentage of staff suggestions for improvement used by management
14. Carrot Company had the following results during June: net operating income $2,500;
turnover 4; and ROI 20%. Carrot Company's average operating assets were: $12500
ROI = NOI – AOA => 20% = 2,500 – AOA => AOA = 12,500
15. MYP Inc has a target rate of return of 20% and divisional managers will receive a bonus
each time their ROI exceeds this figure. X division has profits of $750,000 and currently has
capital employed of $3,000,000. A new, commercially-desirable project will increase profits by
$55,000 and add $150,000 to the asset value.
The divisional manager is likely to accept the project.
ROI ban đầu = 750,000/3,000,000 = 25%; ROI sau = (750 + 55)/(150 + 3,000) = 25.5%

16. Which of the following are examples of non-financial performance indicators?
a. Residual income (RI)
b. Number of patents filed in a period
c. Return on investment (ROI)

d. Number of customer complaints
e. Quantity of returned items in a period
f. Economic value added (EVA)
g. Net profit before tax
17. HNM Ltd has set a target ROI of 14% for its divisions based on its cost of capital. One of
the divisions achieved a ROI of 8% last year. In the current year, the company’s management
expects no major change in the division’s operations. The divisional manager suggests that the


division can save on costs of $100,000 per annum if it invests in the update of one of the major
production processes. The update requires an investment of $800,000.
The manager will reject the proposal, because the ROI (12.5%) is less than the target ROI of 14%. F
The manager will accept the proposal, because the ROI (12.5%) is greater than the division’s ROI of
the previous year i.e. 8%. T
The return of 12.5% is beneficial for the company, because it is greater than the previous year’s ROI
of the division, therefore the company will gain benefits from the acceptance of the proposal. T
18. Ben Company has two stores, P and Q. During April, Store P had a segment margin of
$8,000 and variable expenses equal to 65% of sales. Traceable fixed expenses for Store Q were
$18,000. Ben Company as a whole had a contribution margin ratio of 40%, a combined segment
margin of $20,000, and sales of $180,000. Sales for store Q were: $___60000_____
Total CM = 180,000*40% = 72,000 => total traceable FC = 72,000 – 20,000 = 52,000
traceable FC store P = 52,000 – 18,000 = 34,000 => CM store P = 34,000 + 8,000 = 42,000
sales store P = 42,000/(1 – 0.65) = 120,000 => sales store Q = 180,000 – 120,000 = 60,000
19. Holdings Inc. consists of two districts, A and B. The company as a whole had sales of
$400,000, a contribution margin ratio of 25% and a combined segment margin totaling $35,000.
District A had sales of $90,000 during May, a contribution margin ratio of 45%, and a segment
margin of $16,000. If the net operating income of Holdings Inc. for May is $12,000, the traceable
fixed expenses in District B must have been: $__40,500_____
Total CM = 400,000*25% = 100,000 => traceable FC = 100,000 – 35,000 = 65,000
CM của A = 90,000*45% = 40,500 => traceable FC của A = 40,500 – 16,000 = 24,500

=> traceable FC của B = 65,000 – 24,500 = 40,500
20. IL Ltd. is a software company that provides solutions to businesses around the world.
The directors are aware that low standards of efficiency compared to competitors have
contributed to the recent poor performance of the company. The CEO is very keen to use the
balanced scorecard approach to setting performance targets, and has set a target of providing
at least 70 hours of training each year for all its employees. From the options below, choose the
perspective of the Balanced Scorecard approach reflected by this target.
a. Innovation and learning perspective
b. Internal perspective
c. Ethical perspective
d. Finance perspective
e. Customer perspective
21. Select the potential consequences of divisional managers using Return on Investment (ROI)
targets as a performance measure.
a. Lack of comparability
b. Accepting investment projects that should be rejected and vice versa
c. Lack of understanding from divisional managers
d. Profit manipulation
e. Lack of goal congruence
CHƯƠNG 5
1/ Division Z manufactures chemicals. It sells chemicals to the external market at a price of $22
per litre. This provides a contribution/sales ratio of 40%. Division X (a separate part of the
same group company) requires a regular supply of chemicals in order to manufacture their
own products. For external sales, variable cost includes $1.20 per litre for extra courier charges.
These are not applicable to internal sales. Z has sufficient capacity to meet all internal and
external demand. Which price range would maximise profit from the company's perspective?
$12 - $22 (opportunity cost = 22*60% = 13.2; TP min = 13.2 – 1.2 = 12)


2/ In the Bombadier Company, Division A has a product that can be sold either to outside

customers or to Division B. Information about these divisions is given below:
Case 1

Case 2

Capacity in units

100,000

100,000

Number of units sold externally

100,000

60,000

Market selling price

$90

$75

Variable costs per unit

73

58

Fixed costs per unit based on capacity

10

10

Number of units needed for production

40,000

40,000

Purchase price per unit from external supplier

$86

$74

Division A:

Division B:

The company uses the opportunity cost approach to transfer pricing. What is the minimum
transfer price in Case 2?
$58 (vì có đủ capacity để transfer internally nên opportuinity cost = VC = 58)
3/ Division X makes a part that it sells to customers outside of the company. Data concerning this
part appear below: Selling price to outside customers: $75. Variable cost per unit: $50. Total fixed
costs: $400,000. Capacity in units: 25,000. Division Y of the same company would like to use the
part manufactured by Division X in one of its products. Division Y currently purchases a similar part
made by an outside company for $70 per unit and would substitute the part made by Division X.
Division Y requires 5,000 units of the part each period. Division X has ample excess capacity to

handle all of Division Y's needs without any increase in fixed costs and without cutting into outside
sales of the part. What is the lowest acceptable transfer price from the standpoint of the selling
division? $50 (vì có đủ capacity để transfer internally nên opportuinity cost = VC = 50)
4/ Division S of Kracker Company makes a part that it sells to other companies. Data on that
part appear below: Selling price on the intermediate market: $30. Variable costs per unit: $22. Fixed
costs per unit (based on capacity): $7. Capacity in units: 50,000. Division B, another division of
Kracker Company, presently is purchasing 10,000 units of a similar product each period from an
outside supplier for $28 per unit, but would like to begin purchasing from Division S. Suppose that
Division S can sell all that it can produce to outside customers. If Division S sells to Division B at a
price of $28 per unit, the company as a whole will be:
a. worse off by $70,000 each period
b. worse off by $80,000 each period
c. better off by $20,000 each period
d. worse off by $20,000 each period
Vì transfer internally nên bỏ mất 10,000 units bán ra ngoài
Transfer pricing min = opportunity cost = selling price = 30 (B cần 10000 nhưng A khơng có free
capacity) => cost incurred = income decreases = (30-28)*10000 = 20,000
5/ Rags-to-Riches Corporation has two divisions, X and Y. Division X sells its product to
Division Y. Standard costs for Division X are as follows:


Direct materials

$ 4 per unit

Direct labor

2 per unit

Variable overhead

5 per unit

Fixed overhead

3 per unit

Total

$14 per unit

What is the transfer price for Division X based on standard variable cost plus a markup of 25 percent?
$13.75 = (4+2+5)*1.25
6/ When there is an outside market for an intermediate product that is perfectly competitive, the most
equitable method of transfer pricing is: market price.
7/ The transfer price that would leave the selling division no worse off if the good is sold to an internal
division is(are) called: The minimum transfer price
8/ The transfer price that would leave the buying division no worse off if an input is purchased from
an internal division is(are) called: The maximum transfer price
9/In the Bombadier Company, Division A has a product that can be sold either to outside
customers or to Division B. Information about these divisions is given below: (đề như câu 3)
The company uses the opportunity cost approach to transfer pricing. What is the minimum transfer
price in Case 1? $90 (vì khơng có dư capacity => Market selling price)
10/ OBTC Company has two divisions OB and TC. OB manufactures a special part for a games
console that is manufactured and sold by TC division. There is no external market for this
component. The final selling price of the games console received by TC is $800. The variable cost of
producing a console to TC division (excluding the component) is $250. The variable cost to OB of
manufacturing the component is $150. Transfer prices will be calculated using a 35% markup on
variable cost. Select which of the following states the correct value of contribution earned by
OBTC from each tablet? $400

11/In the Bombadier Company, Division A has a product that can be sold either to outside
customers or to Division B. (đề như câu 3)
The company uses the opportunity cost approach to transfer pricing. What is the maximum transfer
price in Case 1? $91 (Purchase price per unit from external supplier của division B)
12. A transfer price is the price charged by one division of a company to another company: Sai.
13/ Division A of Tripper Company produces a part that it sells to other companies. Sales and
cost data for the part follow: Capacity in units: 60,000. Selling price per unit: $40. Variable costs
per unit: $28. Fixed costs per unit at capacity: $9. Division B, another division of Tripper Company,
would like to buy this part from Division A. Division B is presently purchasing the part from an
outside source at $38 per unit. If Division A sells to Division B, $1 in variable costs can be avoided.
Assume that Division A has ample idle capacity to handle all of Division B's needs without any
increase in fixed costs and without cutting into outside sales. According to the formula in the text,
what is the lowest acceptable transfer price from the viewpoint of the selling division?
27 (vì có đủ free capacity => VC – avoided cost)
14/Which of the following statements about transfer pricing is not true?


a. If the selling division has no spare capacity, the transfer price should be the marginal cost of
production, plus any lost contribution
b. The most efficient transfer price will be the opportunity cost of the selling division
c. The transfer price should match the selling division’s cost of capital to customer
d. If the selling division has spare capacity, the transfer price should be the marginal cost of
production
15/ DR Ltd has two divisions, D and R. Division D makes a component which it can sell only to
Division R. It has no external market. The current information for the divisions is as follows:
Incremental cost for Division D is £150. Incremental cost for Division R is £250. Transfer price for
one component is £202.50. Selling price of the final product is £600. The transfer price is based on a
35% mark up on incremental costs. What is the profit per component for DR Ltd?
200 = 600 – (150 + 250)
16/Negotiated prices are transfer prices

a. negotiated with external customers.
b. determined between a division and corporate headquarters.
c. used when supplying and buying divisions independently agree on a price.
d. agreed to by division management and employees.
17/Mar Company has two decentralized divisions, X and Y. Division X has always purchased
certain units from Division Y at $75 per unit. Because Division Y plans to raise the price to $100 per
unit, Division X is seeking an outside supplier of the part for the old price of $75 per unit. Division
Y's costs follow: Y’s variable costs per unit: $70. Y’s annual fixed costs: $15,000. Y’s annual
production of these units for X: 1,000 units. If Division X buys from an outside supplier, the facilities
Division Y uses to manufacture these units would be idle. What would be the result if the top
management of Mar Company insists that Division X purchase from Division Y at a transfer
price of $100 per unit?
a. it would provide higher overall company net operating income than the old transfer price of
$75 per unit
b. it would be more profitable for the company than allowing X to buy from outside
suppliers at $75 per unit
c. it would provide lower overall company net operating income than the old transfer price of
$75 per unit
d. it would reduce the company's overall profit because Division X should buy from outside
suppliers at $75 per unit if possible
18/In the Bombadier Company, Division A has a product that can be sold either to outside
customers or to Division B. Information about these divisions is given below:
The company uses the opportunity cost approach to transfer pricing. Which case should not be
transferred internally? Case 1 (đề giống câu 3)
19/ Hydroxide Company has two divisions, the Blending Division and Canning Division. The
Blending Division sells chemicals to the Canning Division.
Standard costs for the Blending Division are as follows:
Direct materials

$3.00 per gallon

Direct labor

2.40 per gallon

The Canning Division uses the following predetermined overhead rate:
Variable overhead

$3.60 per gallon