CAPE Accounting Unit 2 · 2016 · Paper 2

18 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)10 marksState the classification for EACH of the 10 listed cost items.
2. 1(b)(i)2 marksExplain what happens to the cost of material issued.
3. 1(b)(ii)2 marksExplain what happens to the value of closing inventory.
4. 1(b)(iii)2 marksExplain what happens to profit.
5. 1(c)(i)6 marksAdvise management whether it would be profitable to make or buy Component ABC.
6. 1(c)(ii)9 marksAdvise management whether to accept a special offer of $1750 per unit from an outside company for Product XYZ, providing justification.
7. 1(d)(i)2 marksCompute the predetermined production overhead rate for 2015.
8. 1(d)(ii)2 marksCalculate the over/under applied overhead for December 2015.
9. 2(a)(i)8 marksCompute the activity rate for EACH activity in the law firm.
10. 2(a)(ii)14 marksCompute the legal bill for Hope McKay using the activity-based costing (ABC) method, given the direct costs, indirect cost usage, and a profit margin of 33 1/3% on the legal bill.
11. 2(b)5 marksBriefly outline the FIVE steps involved in preparing the process costing worksheet.
12. 2(c)(i)4 marksSuggest an appropriate cost driver for EACH activity.
13. 2(c)(ii)4 marksState TWO merits and TWO demerits of the ABC system employed by Janet.
14. 3(a)8 marksPrepare an inventory purchase budget for EACH of the months October, November and December.
15. 3(b)6 marksPrepare a schedule of expected cash disbursement for inventory purchases for EACH of the months October, November and December (final quarter).
16. 3(c)6 marksPrepare a schedule of budgeted cash collections for sales for EACH of the months October, November and December (final quarter).
17. 3(d)9 marksBriefly discuss THREE uses of the budget in a typical organization.
18. 3(e)6 marksBriefly describe the THREE styles of budgeting.