The Chartered Institute of Management Accountants 2001Foundation LevelManagement AccountingFundamentals2FMAF 21 November 2001Day 3 afternoonINSTRUCTIONS TO CAND IDATESRead this page

e before you loo at the questionsYou are allowed three hours to answer this question paper.Answer the ONE question in section A (this has 25 sub-questions, and is on pages 2 8).Answer the ONE question in section B (this is on page 9)Answer ONE question ONLY from section C (these questions are on pag es 10 and 11).Write your examination number in the boxes provided on the front o f the answer boo .Write FMAF on the line mar ed "Subject" on the front of the an swer boo .Write your examination number on the special answer sheet for section A. Detach the sheetfrom the boo let and insert it into your answer boo before y ou hand this in.Do NOT write your name or your student registration number anywh ere on your answer boo .Tic the appropriate boxes on the front of the answer bo o to indicate which questions you haveanswered.FOR FREE CIMA, ACCA & CAT RESOUR CES VISIT: http:// a a-pa istani.blogspot.com FMAFNovember 20012 SECTION A 50 MARKSANSWERALLTWENTY-FIVE SUB-QUESTIONS 2 MARKS EACHQuestion One1.1A standard cost isAthe planned unit cost of a product, compon ent or service in a period.Bthe budgeted cost ascribed to the level of activity achieved in a budget centre in acontrol period.Cthe budgeted production cost asc ribed to the level of activity in a budget period.Dthe budgeted non-production c ost for a product, component or service in a period.1.2The term budget slac refer s to theAextended lead time between the preparation of the functional budgets an d the master budget.Bdifference between the budgeted output and the brea even ou tput.Cadditional capacity available which can be budgeted for.Ddeliberate over-e stimation of costs and under-estimation of revenues in a budget.The following in formation is required for sub-questions 1.3 and 1.4 RS Ltd is currently preparing the production budget for Product A an d the materialpurchase budget for material X for the forthcoming year. Each unit of Product Arequires 5 gs of material X.The anticipated opening stoc for Prod uct A is 5,000 units and the company wishes toincrease the closing stoc by 30% by the end of the year.The anticipated opening stoc for material X is 50,000 g s and in order to avoid stoc -outs the required closing stoc has been increased to 60,000 gs.The Sales Director has confirmed a sales requirement of 70,000 un its of Product A.1.3How many units of Product A will need to be produced?A68,500 units.B71,500 units.C76,500 units.D80,000 units.1.4What will be the purchases b udget for material X?A347,500 gs.B350,000 gs.C357,500 gs.D367,500 gs.Each of the sub-questions numbered from1.1to1.25inclusive, given below, has only ONEcor rect answer.FOR FREE CIMA, ACCA & CAT RESOURCES VISIT: http:// a a-pa istani.blo gspot.com November 2001FMAF 3 1.5S Ltd absorbs overheads on the basis of direct labour hou rs. Details of budgeted andactual figures for the latest period are as follows:B udgetActual Overheads350,000400,000Output 70,000 units 60,000 unitsLabour hours 35 ,000 hours 30,000 hoursWhich ONE of the following statements is correct?AOverhea ds were 50,000 over-absorbed.BOverheads were 50,000 under-absorbed.COverheads were 100,000 over-absorbed.DOverheads were 100,000 under-absorbed.1.6PP Ltd has record ed the following distribution costs during the last three months:MonthVolumeTota l cost units 132,000100,000240,000120,000350,000145,000What will be the distribu tion costs (to the nearest ) in month 4 when the expected activity levelis 42,500 units?A126,250.B127,500.C129,861.D132,813.The following information is required for sub-questions 1.7 and 1.8 ZK Ltd has been as ed to quote a price for a special job that must b e completed withinone wee .The job requires a total of 100 s illed labour hours and 50 uns illed labour hours. Thecurrent employees are paid a guaranteed minimu m wage of 525 for s illed wor ersand 280 for uns illed wor ers for a 35-hour wee . Currently, s illed labour has sparecapacity amounting to 75 labour hours each w ee and uns illed labour has sparecapacity amounting to 100 labour hours each we e . Additional s illed wor ers anduns illed wor ers can be employed and paid by the hour at rates based on the wagespaid to the current wor ers.The materials re quired for the job are currently held in stoc at a boo value of 5,000.The mater ials are regularly used by ZK Ltd and the current replacement cost for themateri

als is 4,500. The total scrap value of the materials is 1,000.1.7What is the total relevant cost to ZK Ltd of using s illed and uns illed labour on this job?ANil. B375.C775.D1,540.1.8What is the relevant cost to ZK Ltd of using the materials in s toc on this job?A1,000.B3,500.C4,500.D5,000.FOR FREE CIMA, ACCA & CAT RESOURCES VIS IT: http:// a a-pa istani.blogspot.com FMAFNovember 20014 1.9Which ONE of the following statemen ts is true?AThe total variable cost varies with a measure of activity.BA variabl e cost is an unavoidable cost.CA variable cost is not relevant for decision-ma i ng.DA variable cost becomes fixed in the long run.1.10ABC Ltd operates an integr ated cost accounting system. The fixed production overheadaccount at 31 July 200 1, which is ABC Ltds year end, showed the following information:Fixed production overhead account Trade creditors 50,000Wor -in-progress120,000Ban 20,000? 5,000D epreciation 5,000Salaries 40,000Materials 10,000125,000125,000The 5,000 credit en try represents the value of the transfer to theAprofit and loss account for the under-recovery of fixed production overheads.Bprofit and loss account for the ov er-recovery of fixed production overheads.Cwor -in-progress account for the unde r-recovery of fixed production overheads.Dfollowing period.1.11The following bud geted information is available for a company that manufactures four types of spe cialist paints:Product WProduct XProduct YProduct Z per litreper litreper litrep er litre Selling price2000150015001750Variable overhead 960 600 960 850Fixed ove 2.10 210Profit 680 600 330 690Machine hours per unit12 10 711All four products use t he same machine.In a period when machine hours are in short supply, the product that ma es the most profitableuse of machine hours isAproduct W.Bproduct X.Cprod uct Y.Dproduct Z.FOR FREE CIMA, ACCA & CAT RESOURCES VISIT: http:// a a-pa istan i.blogspot.com November 2001FMAF 5 1.12For decision-ma ing purposes, wh ich of the following are relevant costs?(i)Avoidable cost(ii)Future cost(iii)Opp ortunity cost(iv)Differential costA(i), (ii), (iii) and (iv).B(i) and (ii) only. C(ii) and (iii) only.D(i) and (iv) only.The following information is required fo r sub-questions 1.13 to 1.15 A company produces a single product that passes th rough two processes. The detailsfor process 1 are as follows:Materials input20,0 00 g at 250 per gDirect labour15,000Production overheads150% of direct labour Nor mal losses are 15% of input in process 1 and without further processing any loss escan be sold as scrap for 1 per g.The output for the period was 18,500 g from process 1.There was no wor -in-progress at the beginning or end of the period.1. 13What value (to the nearest ) will be credited to the process 1 account in respe ct of thenormal loss?ANil.B3,000.C4,070.D5,250.1.14What is the value (to the neares t ) of the abnormal loss/gain for the period for process 1?A6,104.B6,563.C7,257.D7,45 6.1.15What is the value (to the nearest ) of the output to process 2?A88,813.B90,60 4.C91,956.D94,063.FOR FREE CIMA, ACCA & CAT RESOURCES VISIT: http:// a a-pa istani .blogspot.com FMAFNovember 20016 1.16A joint product is(i)the incid ental product produced as a result of a process.(ii)not saleable at the point of separation and must always be processed further.(iii)one of two or more product s separated during processing, each having asignificant sales value.Which of the above is/are correct?A(iii) only.B(i) and (iii) only.C(ii) and (iii) only.D(i), (ii) and (iii).1.17BH Ltd is currently underta ing a contract to build an apart ment bloc . The contractcommenced on 1 January 2001 and is expected to ta e thir teen months to complete.The contract value is 54 million. The contractors financia l year ends on30 September.The contract account for the building of the apartmen t bloc indicates the followingsituation at 30 September 2001:Value of wor cert ified30 millionCosts incurred to date20 millionFuture costs to completion28 million The amount of profits to be recognised is based on the value of wor certified t o date.It is company policy not to recognise profit on contracts unless the valu e certified is atleast 50% of the total contract value.The maximum amount of pro fit/loss for the contract that can be ta en to the profit andloss account for th e year ended 30 September 2001 isAnil.B199 million.C333 million.D555 million.1.18XX Lt d absorbs overheads based on units produced. In one period, 23,000 units werepro duced, actual overheads were 276,000 and there was 46,000 under-absorption.The bud geted overhead absorption rate per unit wasA10.B12.C13.D14.FOR FREE CIMA, ACCA & CAT RESOURCES VISIT: http:// a a-pa istani.blogspot.com November 2001FMAF 7 1.1

9RD Limited uses the LIFO system for valuing material issues from stores to prod uction.The Materials account had an opening value of 850 on 1 October 2001:500 un its at 120 purchased 12 September 2001200 units at 125 purchased 27 September 2001Th e following receipts and issues were recorded during October:8 October 2001Recei pts 600 units130 per unit20 October 2001Receipts 600 units150 per unit29 October 200 1Issues1,500 unitsWhat was the total value (to the nearest ) of the issues on 29 October?A1,930.B1,969.C1,997.D2,050.1.20During a period of rising prices, which ONE of the following statements is correct?AThe LIFO method will produce lower profi ts than the FIFO method, and lower closingstoc values.BThe LIFO method will pro duce lower profits than the FIFO method, and higher closingstoc values.CThe FIF O method will produce lower profits than the LIFO method, and lower closingstoc values.DThe FIFO method will produce lower profits than the LIFO method, and hi gher closingstoc values.1.21The economic order quantity isAthe order quantity w hich minimises the total of stoc ordering and holding costs.Bthe order quantity used for special ordering purposes.Cthe order quantity used for buffer stoc .Dt he order quantity used to avoid stoc outs.1.22In a standard cost boo eeping sy stem, when the actual material price exceeds thestandard price, the double entry to record the difference in price isAdebit the material price variance account and credit the raw material control account.Bcredit the material price variance account and debit the raw material control account.Cdebit the material price var iance account and credit the wor -in-progress account.Dcredit the material price variance account and debit the wor -in-progress account.FOR FREE CIMA, ACCA & C AT RESOURCES VISIT: http:// a a-pa istani.blogspot.com FMAFNovember 20018 1 .23An overhead absorption rate is used toAallocate overhead costs to cost centre s.Battribute overheads to products.Cspread indirect cost across a number of cost centres.Dcontrol overheads.1.24A company operates a premium bonus system by whi ch employees receive a bonus of 75% of the time saved compared with a standard t ime allowance (at the normal hourlyrate).Details relating to employee X are show n below:Employee X Actual hours wor ed42 hoursHourly rate of pay10Output achieved 400 units of product YStandard time allowed (per unit of Y)7 minutesThe bonus pa yable (to the nearest ) to employee X isA35.B47.C70.D82.1.25HD Ltd currently uses abs orption costing to calculate profit.During the last period, the fixed production overhead absorption rate was 25 per unit.There were 500 units of opening stoc f or the period and 350 units of closing stoc .If marginal costing principles had been used, the profit for the period compared to the absorptioncosting profit wo uld have beenA3,750 lower.B3,750 higher.C8,750 lower.D8,750 higher.(Total = 50 mar s )FOR FREE CIMA, ACCA & CAT RESOURCES VISIT: http:// a a-pa istani.blogspot.com November 2001FMAF 9 SECTION B 25 MARKSANSWER THIS QUESTIONQuestion TwoSS Ltd ma es and sells a single product "PP". The company uses a standard absorption co stingsystem.The budgeted production and sales for the year ended 31 October 2001 were 59,500 units with aselling price of 2 each unit. The standard time for prod ucing each unit was 3 minutes. Thestandard labour rate was 10 an hour. The standa rd material cost for one unit of PP was 075per unit.Production overhead absorption rates were based on direct labour cost and were as follows:Variable overhead35% of direct labour costFixed overhead40% of direct labour costFor the year under review, the actual results were as follows:Production and sales of PP62,000 unit s Selling price for one unit200Labour cost incurred for 3,500 hours38,500Material cost for each unit075Variable production overhead incurred9,500Fixed production o verhead incurred9,500There were no changes in any stoc levels during the period .Required: (a)Prepare a statement that reconciles budgeted profit with actual pr ofit for the year ended31 October 2001, showing the analysis of variances in as much detail as possible from theinformation given.(14 mar s)(b)Referring to your analysis in part(a), suggest two possible reasons for the labour efficiencyvari ance and two possible reasons for the labour rate variance that you have calcula ted.(4 mar s)(c)Explain the factors that should be considered when selecting the most appropriate base touse for an overhead absorption rate. Your answer should include a discussion of themethod used by SS Ltd.(7 mar s)(Total = 25 mar s)FOR FREE CIMA, ACCA & CAT RESOURCES VISIT: http:// a a-pa istani.blogspot.com FM AFNovember 200110 SECTION C 25 MARKSANSWER ONE QUESTION ONLYQuestion ThreeT Ltd is a newly-formed company that designs customised computer programs for its clie

nts.The capital needed to fund the company will be provided by a venture capital ist who will invest150,000 on 1 January 2002 in exchange for shares in T Ltd.The Directors are currently gathering the information needed to help in the preparat ion of thecash budget for the first three months of 2002. The information that t hey have is given below.Budget details The budgeted sales (that is, the value of the contracts signed) for the first quarter of 2002 areexpected to be 200,000. H owever, as the company will only just have commenced trading, it isthought that sales will need time to grow. It is therefore expected that 15% of the first qua rter ssales will be achieved in January, 30% in February and the remainder in Ma rch. It is expectedthat sales for the year ending 31 December 2002 will reach 1,0 00,000.Clients must pay a deposit of 5% of the value of the computer program whe n they sign thecontract for the program to be designed. Payments of 45% and 50% of the value are then paidone and two months later respectively. No bad debts ar e anticipated in the first quarter.There are six people employed by the company, each earning an annual gross salary of 45,000, payable in arrears on the last da y of each month.Computer hardware and software will be purchased for 100,000 in J anuary. A deposit of 25%is payable on placing the order for the computer hardwar e and software, with the remainingbalance being paid in equal amounts in Februar y and March. The capital outlay will bedepreciated on a straight-line basis over three years, assuming no residual value.The company has decided to rent offices that will require an initial deposit of 13,000 and anongoing cost of 6,500 per mo nth payable in advance. These offices are fully serviced and therent is inclusiv e of all fixed overhead costs.Variable production costs are paid in the month in which they are incurred and are budgeted asfollows:January 1,200 February 4,200 March 8,000A mar eting and advertising campaign will be launched in January at a cost of 10,000 with afurther campaign in March for 5,000, both amounts being payab le as they are incurred.Administration overhead is budgeted to be 500 each month: 60% to be paid in the month of usage and the balance one month later.Tax and in terest charges can be ignored.Required: (a)Prepare the cash budget by month and in total for the first quarter of 2002.(15 mar s)(b)Identify and comment on thos e areas of the cash budget that you wish to draw to theattention of the Director s of T Ltd, and recommend action to improve cash flow.(7 mar s)(c)Briefly explai n three advantages for T Ltd of using a spreadsheet when preparing a cashbudget. (3 mar s)(Total = 25 mar s)FOR FREE CIMA, ACCA & CAT RESOURCES VISIT: http:// a a-pa istani.blogspot.com November 2001FMAF 11Question FourP Ltd manufactures a specialist photocopier. Increased competition from a new manufacturer has mean t that P Ltd has been operating below full capacity for the last two years.Thebu dgeted information for the last two years was as follows:Year 1Year 2 Annual sal es demand (units)7070Annual production (units)7070Selling price (for each photoc opier)50,00050,000Direct costs (for each photocopier)20,00020,000Variable production overheads (for each photocopier)11,00012,000Fixed production overheads525,000525,00 0Actual results for the last two years were as follows:Year 1Year 2 Annual sales demand (units)3060Annual production (units)4060Selling price (for each photocop ier)50,00050,000Direct costs (for each photocopier)20,00020,000Variable production o verheads (for each photocopier)11,00012,000Fixed production overheads500,000530,000T here was no opening stoc at the beginning of year 1.Required: (a)Prepare the ac tual profit and loss statements for each of the two years using:(i)absorption co sting;(ii)marginal costing.(14 mar s)(b)Calculate the budgeted brea even point i n units and the budgeted margin of safety as apercentage of sales for year 1 and then again for year 2.(6 mar s)(c)Explain how the change in cost structure (as detailed in the budgeted information) hasaffected the values you have calculated in your answer to part(b).(5 mar s)(Total = 25 mar s)End of paper FOR FREE CIMA , ACCA & CAT RESOURCES VISIT: http:// a a-pa istani.blogspot.com ExaminationQu estion andAnswer Boo Write here your full examination number Centre Code:Hall Co de:Des Number:Foundation LevelManagement Accounting Fundamentals2FMAF 22 May 20 02Day 3 afternoonINSTRUCTIONS TO CANDIDATESRead this page before you loo at the questionsTHIS QUESTION PAPER BOOKLET IS ALSO YOUR ANSWER BOOKLET.Sufficient spa ce has been provided for you to write your answers, and also for wor ings where questionsrequire them. For section B questions, you must write your answers in t he shaded space provided.Additional blan pages (19-22) are included towards the

bac of this boo let if you require more space for notes or wor ings. Please no te that you will NOT receive mar s for your wor ings. Do NOT remove anysheets fr om this boo let: cross through neatly any wor that is not to be mar ed. Avoid t he use of correction fluid.You are allowed three hours to answer this question p aper. All questions are compulsory.Answer the ONE question in section A (this ha s 25 sub-questions and is on pages 2-12)Answer the THREE questions in section B (these are on pages 14-18)You are advised to spend 10 minutes reading through th e paper before starting to answer the questions.You should spend no more than 85 minutes in total answering the ONE question in section A, which has25 sub-quest ions.You should spend no more than 85 minutes in total answering the THREE quest ions in section B.Hand this entire boo let to the invigilators at the end of the examination. You are NOT permitted to leavethe examination hall with this boo l et.Do NOT write your name or your student registration number anywhere on this b oo let.TURN OVERFor office use only TotalOneTwoThreeFourMar s awarded (First mar er) for each questionMar s awarded (Second mar er) for each question The Charter ed Institute of Management Accountants 2002 FOR FREE CIMA, ACCA & CAT RESOURCES VISIT: http:// a a-pa istani.blogspot.com FMAF2May 2002 SECTION A 50 MARKSA NSWERALLTWENTY-FIVE SUB-QUESTIONS 2 MARKS EACHQuestion One1.1Which ONE of the fo llowing would be classified as direct labour?APersonnel manager in a company ser vicing cars.BBric layer in a construction company.CGeneral manager in a DIY shop .DMaintenance manager in a company producing cameras.1.2The principal budget fac tor is theAfactor which limits the activities of the organisation and is often t he starting point in budget preparation.Bbudgeted revenue expected in a forthcom ing period.Cmain budget into which all subsidiary budgets are consolidated.Dover estimation of revenue budgets and underestimation of cost budgets, which operate s as a safetyfactor against ris .For office use only Total1.11.2Mar s awarded (F irst mar er) for each sub-questionMar s awarded (Second mar er) for each sub-que stionEach of the sub-questions numbered from1.1to1.25inclusive, given below, has only ONE correctanswer.REQUIRED: Place a circle O around the letter A,B,Cor Dthat gives the correct answer to each sub-question.If you wish to change your mind a bout an answer, bloc out your first answer completely and then circleanother le tter. You will NOT receive mar s if more than one letter is circled.Please note that you will NOT receive mar s for any wor ings to these sub-questions. Suffici ent spacehas been provided for you to do your wor ings where these sub-questions require them.FOR FREE CIMA, ACCA & CAT RESOURCES VISIT: http:// a a-pa istani.b logspot.com May 20023FMAF 1.3R Ltd absorbs overheads based on units produce d. In one period 110,000 units were produced andthe actual overheads were 500,000 . Overheads were 50,000 over-absorbed in the period.The overhead absorption rate wasA400 per unit.B450 per unit.C500 per unit.D550 per unit.Space for wor ings to 1.31 Ltd operates an integrated cost accounting system. The Wor -in-Progress Account at the end of theperiod showed the following information:Wor -in-Progress Accou nt Stores ledger a/c100,000?200,000Wage control a/c75,000Factory overhead a/c50, 000Balance c/d25,000225,000225,000The 200,000 credit entry represents the value o f the transfer to theACost of sales account.BMaterial control account.CSales acc ount.DFinished goods stoc account.TURN OVERFor office use only Total1.31.4Mar s awarded (First mar er) for each sub-questionMar s awarded (Second mar er) for e ach sub-questionFOR FREE CIMA, ACCA & CAT RESOURCES VISIT: http:// a a-pa istani .blogspot.com FMAF4May 2002 1.5X Ltd operates a standard costing system and absorbs overheads on the basis of standard machinehours. Details of budgeted and actual figures are as follows:BudgetActual Overheads1,250,0001,005,000Output2 50,000 units220,000 unitsMachine hours500,000 hours450,000 hoursWhich ONE of the following statements is correct?AOverheads were 95,000 over-absorbed.BOverheads were 95,000 under-absorbed.COverheads were 120,000 over-absorbed.DOverheads were 12 0,000 under-absorbed.Space for wor ings to 1.5For office use only Total1.5Mar s awarded (First mar er) for each sub-questionMar s awarded (Second mar er) for ea ch sub-questionFOR FREE CIMA, ACCA & CAT RESOURCES VISIT: http:// a a-pa istani. blogspot.com May 20025FMAF The following information is required for Question s 1.6and 1.7P Ltd uses the FIFO system for valuing material issues from stores t o production.The Materials Account had an opening value of 12,000 on 1 April 2002 :1,000 units@580 Purchased 22 March 20021,000 units@620 Purchased 23 March 2002The f

ollowing receipts and issues were recorded during April:2 April 2002Receipts5,00 0 units630 per unit15 April 2002Receipts8,000 units625 per unit30 April 2002Issues9, 000 unitsSpace for wor ings to 1.6 and 1.71.6Using the FIFO method, what was the value of the closing stoc on 30 April?A37,200B37,400C37,500D37,6001.7If P Ltd had used LIFO, instead of FIFO, the value of the material issued would have beenA100 lower.B100 higher.C300 lower.D300 higher.1.8In an integrated boo eeping system, wh en the actual production overheads exceed the absorbedproduction overheads, the accounting entries to close off the production overhead account at the endof the period would beAdebit the production overhead account and credit the wor -in-pr ogress account.Bdebit the wor -in-progress account and credit the production ove rhead account.Cdebit the production overhead account and credit the profit and l oss account.Ddebit the profit and loss account and credit the production overhea d account.TURN OVERFor office use only Total1.61.71.8Mar s awarded (First mar er ) for each sub-questionMar s awarded (Second mar er) for each sub-questionFOR FR EE CIMA, ACCA & CAT RESOURCES VISIT: http:// a a-pa istani.blogspot.com FMAF6May 2002 1.9X Ltd currently uses marginal costi ng to calculate profit. There were 10,000 units of opening stoc and12,000 units of closing stoc for the period.If absorption costing principles had been used and the fixed overhead absorption rate was 30 per unit, the absorption costing pr ofit for the period compared to the marginal costing profit would havebeenA30,000 lower.B30,000 higher.C60,000 lower.D60,000 higher.The following information is req uired for Questions 1.10to 1.12The following data relate to stoc item PR7:Avera ge usage1,000 units per dayMinimum usage600 units per dayMaximum usage1,300 unit s per dayAverage lead time75 daysMinimum lead time5 daysMaximum lead time10 daysE OQ40,000 units1.10The reorder level isA3,000 units.B7,500 units.C9,750 units.D13 ,000 units.1.11The maximum stoc level isA40,000 units.B44,500 units.C46,750 uni ts.D50,000 units.1.12The minimum stoc level isA2,250 units.B3,000 units.C5,500 units.D8,000 units.For office use only Total1.91.101.111.12Mar s awarded (First mar er) for each sub-questionMar s awarded (Second mar er) for each sub-question Space for wor ings to 1.10 to 1.12Additional space for wor ings to 1.10 to 1.12F OR FREE CIMA, ACCA & CAT RESOURCES VISIT: http:// a a-pa istani.blogspot.com Ma y 20027FMAF 1.13A company operates a differential piece-rate system and the foll owing wee ly rates have been set:1 500 units020 per unit in this band501 600 units02 5 per unit in this band601 units and above055 per unit in this bandDetails relatin g to employee A are shown below:Employee AActual output achieved800 unitsActual hours wor ed45There is a guaranteed minimum wage of 5 per hour for a 40-hour wee paid to all employees.The amount payable (to the nearest ) to employee A isA200B23 5C435D440Space for wor ings to 1.131.14Overtime premium isAthe additional amount p aid for hours wor ed in excess of the basic wor ing wee .Bthe additional amount paid over and above the normal hourly rate for hours wor ed in excess of thebasi c wor ing wee .Cthe additional amount paid over and above the overtime rate for hours wor ed in excess of the basicwor ing wee .Dthe overtime rate.TURN OVERFor office use only Total1.131.14Mar s awarded (First mar er) for each sub-questionM ar s awarded (Second mar er) for each sub-questionFOR FREE CIMA, ACCA & CAT RESO URCES VISIT: http:// a a-pa istani.blogspot.com FMAF8May 2002 The following information is required for Questions 1.15and 1.16X Ltd has two production depar tments, Assembly and Finishing, and one service department, Stores.Stores provid e the following service to the production departments: 60% to Assembly and 40% t o Finishing.The budgeted information for the year is as follows:Budgeted fixed p roduction overheads:Assembly100,000Finishing150,000Stores 50,000Budgeted output100, 000 unitsSpace for wor ings to 1.15 and 1.161.15The budgeted fixed production ov erhead absorption rate for the Assembly Department will beA100 per unit.B130 per uni t.C250 per unit.D300 per unit.1.16At the end of the year, the total of all of the fi xed production overheads debited to the FinishingDepartment Fixed Production Ove rhead Control Account was 130,000, and the actual outputachieved was 100,000 unit s.The overheads for the Finishing Department wereA20,000 under-absorbed.B20,000 ov er-absorbed.C40,000 under-absorbed.D40,000 over-absorbed.For office use only Total 1.151.16Mar s awarded (First mar er) for each sub-questionMar s awarded (Second mar er) for each sub-questionFOR FREE CIMA, ACCA & CAT RESOURCES VISIT: http://

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