ca_exm_ma1_2005-06 - CGA-CANADA MANAGEMENT ACCOUNTING 1...

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EMA1J05 ©CGA-Canada, 2005 Page 1 of 8 CGA-CANADA MANAGEMENT ACCOUNTING 1 EXAMINATION June 2005 Marks Time: 3 Hours Note: Except for multiple-choice questions, all calculations must be shown to obtain full marks. 30 Question 1 Select the best answer for each of the following unrelated items. Answer each of these items in your examination booklet by giving the number of your choice. For example, if the best answer for item (a) is (1), write (a)(1) in your examination booklet. If more than one answer is given for an item, that item will not be marked. Incorrect answers will be marked as zero. Marks will not be awarded for explanations. Note: 2 marks each a. Produce Ltd. has approached Farmers’ Supply Co. with a proposal to build a greenhouse supply warehouse. Farmers’ Supply would provide a building to store supplies and would handle all record- keeping. Farmers’ Supply has a storage barn that is not currently in use. Shelving would be required for stacking the product and a special concrete pad would be added for delivery truck access. The existing Farmers’ Supply accountant would assume the additional accounting duties and would receive an additional $5,000 per annum. Farmers’ Supply would be paid a fee based on the volume of product stored. Which of the following items is not a relevant consideration in deciding whether to establish a greenhouse supply warehouse? 1) Book value of storage barn 2) Cost of special concrete pad 3) Farmers’ Supply accountant’s raise 4) Projected volume of product for storage b. Scantle Inc. has received an offer from an outside supplier to supply Scantle’s annual needs of 10,000 component parts used in the manufacture of one of its products. Information on making versus buying is as follows: Cost to Make Cost to Buy (per unit) (per unit) Direct materials $10.00 Direct labour 8.00 Variable overhead 2.00 Allocated overhead 3.00 Production supervisor’s salary 7.00 Outside supplier price $24 The production supervisor will be transferred to another department if the production of the component part is discontinued. Which of the following is the appropriate decision and related cost? 1) Produce internally, based on a positive margin of $10,000 2) Purchase externally, based on a positive margin of $30,000 3) Produce internally, based on a positive margin of $40,000 4) Purchase externally, based on a positive margin of $60,000 Continued. ..
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EMA1J05 ©CGA-Canada, 2005 Page 2 of 8 Note: Use the following information to answer parts (c) to (e): Marsa Co. uses a weighted-average process costing system. The following data are for the production department for the month of February. Materials Conversion Units (% complete) (% complete) Work in process, beginning 2,000 $ 4,500 $ 4,800 (60%) (60%) Units started into production 34,000 Costs added in February $ 70,000 $ 70,000 The February ending work-in-process inventory was 75% complete with respect to both materials and conversion costs. c.
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This note was uploaded on 11/15/2010 for the course CGA ma1 taught by Professor ... during the Spring '10 term at York Tech.

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ca_exm_ma1_2005-06 - CGA-CANADA MANAGEMENT ACCOUNTING 1...

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