ca_exm_ma1_2008-12

ca_exm_ma1_2008-12 - CGA-CANADA MANAGEMENT ACCOUNTING...

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EMA1D08 ©CGA-Canada, 2008 Page 1 of 6 CGA-CANADA MANAGEMENT ACCOUNTING FUNDAMENTALS [MA1] EXAMINATION December 2008 Marks Time: 3 Hours Note: Except for multiple-choice questions, all calculations must be shown to obtain full marks. 21 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. In the context of making a decision, which of the following statements regarding relevant costs is incorrect ? 1) An opportunity cost is a relevant cost. 2) A traceable fixed cost is a relevant cost. 3) A variable cost is relevant cost. 4) A sunk cost is a relevant cost. b. Which of the following statements comparing the weighted-average method with the FIFO method of accounting for cost flows is incorrect ? 1) When there are never any beginning inventories or ending inventories, both methods will provide identical results. 2) The fact that there are 2 different methods suggests that it is not possible to state which method provides more accurate results. 3) The weighted-average method averages the costs associated with the work done in the previous period with the costs incurred in the current period. 4) The FIFO method averages the costs incurred during a period with the units worked on during the period, which includes the units in beginning inventory. c. Grate Frozen North Company produces 2 lines of frozen dessert: sweet and decadent. Analysis of the annual sales and profit performance for 2008 reveals the following: Actual price of both product lines was less than budgeted price Actual sales volume of each product line increased Actual market volume increased for both product lines Each product line preserved its share of the corresponding market volume Based on the above information, which of the following statements is correct? 1) There is an unfavourable total sales price variance and a favourable market volume variance. 2) There is an unfavourable total sales price variance and an unfavourable market volume variance. 3) There is a favourable sales volume variance and an unfavourable market volume variance. 4) There is a favourable sales volume variance and a favourable market share variance. Continued. ..
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EMA1D08 ©CGA-Canada, 2008 Page 2 of 6 d. Sweats Company produces 2 styles of t-shirts and is selling an equal number of each style. Sales of the product at current prices are limited only by production capacity. The following data is available: Style Crewneck V-neck Total Price per unit $2.75 $3.25 Unit variable cost $1.25 $1.75 Contribution margin ratio 0.545455 0.461538 Sales (units) 1,000,000 1,000,000 Fixed costs $ 875,000
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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_2008-12 - CGA-CANADA MANAGEMENT ACCOUNTING...

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