CAPE Accounting Unit 2 · 2010 · Paper 2

20 questions and parts from this paper. Open one to see it in full, then practise it on Quelpr and get it marked against the mark scheme.

1. 1(a)(i)7.5 marksClassify EACH of the listed costs (items 2 to 16) as either variable or fixed with respect to volume or activity level.
2. 1(a)(ii)7.5 marksClassify EACH of the listed costs (items 2 to 16) as either a selling and administrative cost or a product cost.
3. 1(b)(i)3 marksAssuming the employee is idle for 5 hours due to machine breakdowns and 4 hours due to material shortages in a 40-hour week with no overtime, allocate the wages between direct labour cost and manufacturing cost.
4. 1(b)(ii)3 marksAssuming the employee works 48 hours in the following week with no idle time, allocate the wages between direct labour cost and manufacturing overhead cost.
5. 1(b)(iii)4 marksExplain TWO ways the company could classify the cost of fringe benefits for direct labour workers in its cost records.
6. 1(c)10 marksCalculate the total service department costs that should be allocated to EACH production department using the direct method.
7. 2(a)(i)2 marksCalculate the total shop overhead applied to jobs in August.
8. 2(a)(ii)3 marksDetermine by how much shop overhead was over- or under-applied during August.
9. 2(a)(iii)10 marksCompute the cost of the completed jobs (Jobs 811, 813, and 814) for the month.
10. 2(a)(iv)4 marksCompute the total cost of jobs in process on August 31.
11. 2(b)(i)2 marksDescribe the MAIN difference between traditional costing systems and activity-based costing systems.
12. 2(b)(ii)a)4 marksCompute the activity application rate for EACH activity centre for 2009.
13. 2(b)(ii)b)4 marksCompute the total overhead cost assigned to EACH product in 2009 using activity-based costing.
14. 2(b)(ii)c)2 marksCompute the total cost to manufacture ONE unit of EACH product in 2009 using activity-based costing.
15. 2(b)(ii)d)4 marksBased on your previous calculations, explain why the company's profitability has been declining since the introduction of the premium product.
16. 3(a)(i)6 marksCompute the payback period for EACH investment project.
17. 3(a)(ii)15 marksCompute the net present value for EACH investment project.
18. 3(a)(iii)3 marksCompute the profitability index for EACH investment project.
19. 3(b)3 marksRank the three investment projects based on the three measures computed in (a)(i) to (iii).
20. 3(c)8 marksBriefly describe FOUR non-financial benefits that may accrue to the company if it decides to proceed with investment project B (emission reduction equipment).