Paper F2
Fundamentals Level – Knowledge Module
Management
Accounting
Specimen Exam applicable from June 2014
Time allowed: 2 hours
This paper is divided into two sections:
Section A – ALL 35 questions are compulsory and MUST
be attempted
Section B – ALL THREE questions are compulsory and MUST
be attempted
Formulae Sheet, Present Value and Annuity Tables are on
pages 16, 17 and 18.
Do NOT open this paper until instructed by the supervisor.
This question paper must not be removed from the examination hall.
The Association of Chartered Certified Accountants
,Section A – ALL 35 questions are compulsory and MUST be attempted
Please use the space provided on the inside cover of the Candidate Answer Booklet to indicate your chosen answer to
each multiple choice question.
Each question is worth 2 marks.
1 A manufacturing company benchmarks the performance of its accounts receivable department with that of a leading
credit card company.
What type of benchmarking is the company using?
A Internal benchmarking
B Competitive benchmarking
C Functional benchmarking
D Strategic benchmarking
2 Which of the following BEST describes target costing?
A Setting a cost by subtracting a desired profit margin from a competitive market price
B Setting a price by adding a desired profit margin to a production cost
C Setting a cost for the use in the calculation of variances
D Setting a selling price for the company to aim for in the long run
3 Information relating to two processes (F and G) was as follows:
Process Normal loss as Input Output
% of input (litres) (litres)
F 8 65,000 58,900
G 5 37,500 35,700
For each process, was there an abnormal loss or an abnormal gain?
Process F Process G
A Abnormal gain Abnormal gain
B Abnormal gain Abnormal loss
C Abnormal loss Abnormal gain
D Abnormal loss Abnormal loss
4 The following budgeted information relates to a manufacturing company for next period:
Units $
Production 14,000 Fixed production costs 63,000
Sales 12,000 Fixed selling costs 12,000
The normal level of activity is 14,000 units per period.
Using absorption costing the profit for next period has been calculated as $36,000.
What would be the profit for next period using marginal costing?
A $25,000
B $27,000
C $45,000
D $47,000
2
, 5 The Eastland Postal Service is government owned. The government requires it to provide a parcel delivery service to
every home and business in Eastland at a low price which is set by the government. Express Couriers Co is a privately
owned parcel delivery company that also operates in Eastland. It is not subject to government regulation and most of
its deliveries are to large businesses located in Eastland’s capital city. You have been asked to assess the relative
efficiency of the management of the two organisations.
Which of the following factors should NOT be allowed for when comparing the ROCE of the two organisations to
assess the efficiency of their management?
A Differences in prices charged
B Differences in objectives pursued
C Differences in workforce motivation
D Differences in geographic areas served
6 Under which sampling method does every member of the target population has an equal chance of being in the
sample?
A Stratified sampling
B Random sampling
C Systematic sampling
D Cluster sampling
7 A Company manufactures and sells one product which requires 8 kg of raw material in its manufacture. The budgeted
data relating to the next period are as follows:
Units
Sales 19,000
Opening inventory of finished goods 4,000
Closing inventory of finished goods 3,000
Kg
Opening inventory of raw materials 50,000
Closing inventory of raw materials 53,000
What is the budgeted raw material purchases for next period (in kg)?
A 141,000
B 147,000
C 157,000
D 163,000
3 [P.T.O.
Fundamentals Level – Knowledge Module
Management
Accounting
Specimen Exam applicable from June 2014
Time allowed: 2 hours
This paper is divided into two sections:
Section A – ALL 35 questions are compulsory and MUST
be attempted
Section B – ALL THREE questions are compulsory and MUST
be attempted
Formulae Sheet, Present Value and Annuity Tables are on
pages 16, 17 and 18.
Do NOT open this paper until instructed by the supervisor.
This question paper must not be removed from the examination hall.
The Association of Chartered Certified Accountants
,Section A – ALL 35 questions are compulsory and MUST be attempted
Please use the space provided on the inside cover of the Candidate Answer Booklet to indicate your chosen answer to
each multiple choice question.
Each question is worth 2 marks.
1 A manufacturing company benchmarks the performance of its accounts receivable department with that of a leading
credit card company.
What type of benchmarking is the company using?
A Internal benchmarking
B Competitive benchmarking
C Functional benchmarking
D Strategic benchmarking
2 Which of the following BEST describes target costing?
A Setting a cost by subtracting a desired profit margin from a competitive market price
B Setting a price by adding a desired profit margin to a production cost
C Setting a cost for the use in the calculation of variances
D Setting a selling price for the company to aim for in the long run
3 Information relating to two processes (F and G) was as follows:
Process Normal loss as Input Output
% of input (litres) (litres)
F 8 65,000 58,900
G 5 37,500 35,700
For each process, was there an abnormal loss or an abnormal gain?
Process F Process G
A Abnormal gain Abnormal gain
B Abnormal gain Abnormal loss
C Abnormal loss Abnormal gain
D Abnormal loss Abnormal loss
4 The following budgeted information relates to a manufacturing company for next period:
Units $
Production 14,000 Fixed production costs 63,000
Sales 12,000 Fixed selling costs 12,000
The normal level of activity is 14,000 units per period.
Using absorption costing the profit for next period has been calculated as $36,000.
What would be the profit for next period using marginal costing?
A $25,000
B $27,000
C $45,000
D $47,000
2
, 5 The Eastland Postal Service is government owned. The government requires it to provide a parcel delivery service to
every home and business in Eastland at a low price which is set by the government. Express Couriers Co is a privately
owned parcel delivery company that also operates in Eastland. It is not subject to government regulation and most of
its deliveries are to large businesses located in Eastland’s capital city. You have been asked to assess the relative
efficiency of the management of the two organisations.
Which of the following factors should NOT be allowed for when comparing the ROCE of the two organisations to
assess the efficiency of their management?
A Differences in prices charged
B Differences in objectives pursued
C Differences in workforce motivation
D Differences in geographic areas served
6 Under which sampling method does every member of the target population has an equal chance of being in the
sample?
A Stratified sampling
B Random sampling
C Systematic sampling
D Cluster sampling
7 A Company manufactures and sells one product which requires 8 kg of raw material in its manufacture. The budgeted
data relating to the next period are as follows:
Units
Sales 19,000
Opening inventory of finished goods 4,000
Closing inventory of finished goods 3,000
Kg
Opening inventory of raw materials 50,000
Closing inventory of raw materials 53,000
What is the budgeted raw material purchases for next period (in kg)?
A 141,000
B 147,000
C 157,000
D 163,000
3 [P.T.O.
