ca_exm_ma1_2007-03

ca_exm_ma1_2007-03 - CGA-CANADA MANAGEMENT ACCOUNTING 1...

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EMA1M07 ©CGA-Canada, 2007 Page 1 of 5 CGA-CANADA MANAGEMENT ACCOUNTING 1 EXAMINATION March 2007 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: 3 marks each a. Prime cost is always which of the following? 1) Variable and direct 2) Fixed and direct 3) Variable and indirect 4) Fixed and indirect b. Which of the following is true? 1) Normal and abnormal spoilage both arise under efficient operating conditions. 2) Neither normal nor abnormal spoilage is expected to arise under efficient operating conditions. 3) Normal spoilage is controllable and abnormal spoilage is not. 4) Abnormal spoilage is controllable and normal spoilage is not. c. Which of the following statements regarding the use of variable costing versus absorption costing is true? 1) Absorption costing treats all costs of production as product costs, regardless of whether the costs are variable or fixed. 2) Absorption costing treats only variable costs of production as product costs. 3) Absorption costing treats only fixed costs of production as product costs. 4) Absorption costing harmonizes fully with the contribution approach and cost-volume-profit concepts. d. How does the accounting treatment of selling and administration costs differ between absorption and variable costing if more units are produced than are sold? 1) The variable portion is added to the cost of ending inventory based on a pro rata portion of units produced to those sold. 2) The fixed portion is added to the costs of ending inventory based on a pro rata portion of units produced to those sold. 3) There is no difference in the treatment. 4) Both fixed and variable portions are added to the cost of ending inventory based on a pro rata portion of units produced to those sold. Continued. ..
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EMA1M07 ©CGA-Canada, 2007 Page 2 of 5 e. Which of the following statements is false ? 1) Using standard costs is appropriate for both profit-oriented and not-for-profit companies. 2) Using standard costs is appropriate only for companies concerned with making a profit. 3) Management by exception is a system of management that depends on standard costs. 4) Standards must be reviewed periodically to ensure that they remain appropriate. Note: Use the following information to answer parts (f) and (g).
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ca_exm_ma1_2007-03 - CGA-CANADA MANAGEMENT ACCOUNTING 1...

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