ACCA Applied Knowledge (BT, MA, FA) · Management Accounting (MA)

Cost accounting methods

10 practice questions, each with the answer and an explanation.

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Random questions from this topic, one at a time. You see the answer and the explanation straight after each one.

All 10 questions

  1. In a process, 10,000 units were started and 8,000 completed. The closing work in progress of 2,000 units is 100% complete for materials and 50% complete for conversion costs. There was no opening inve…
  2. Using the process data (10,000 units started, 8,000 completed, 2,000 in progress that are 100% complete for materials and 50% for conversion; materials cost £60,000 and conversion costs £44,000), what…
  3. In a process, 5,000 kg of input cost £47,500. Normal loss is 10% of input and can be sold as scrap at £2 per kg. Actual output was 4,300 kg. What is the cost per kg of expected output (to 4 decimal pl…
  4. Using the same data (cost per expected kg £10.3333, 5,000 kg input, normal loss 500 kg, actual output 4,300 kg), how many kg of abnormal loss are there and what is its value?
  5. A job used materials costing £3,200 and 40 direct labour hours at £15 per hour. Production overheads are absorbed at £8 per direct labour hour. The firm adds a 25% mark-up on total cost. What is the s…
  6. A batch of 500 units has set-up costs of £1,200, direct materials of £4,000, direct labour of £3,000 and variable overheads of £800. What is the cost per unit?
  7. A transport company runs a bus service and incurs £74,400 total costs in a month. Buses carried 12,000 passengers over an average journey of 15 miles each. What is the cost per passenger-mile?
  8. Which costing method is most appropriate for a firm that makes a single customised piece of furniture to each customer's specification?
  9. In a process, 1,000 kg of input cost £9,000. Normal loss is 10% of input and has no scrap value. Actual output was 920 kg. What is the value of the abnormal gain and the cost per kg of good output?
  10. An employee is paid a basic rate of £8 per hour for a 40-hour week and works 46 hours in one week, with overtime paid at time and a half. The overtime arose from general pressure of work and not becau…

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