CAPE Accounting Unit 2 · 2021 · Paper 2

24 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)6 marksOutline THREE differences between the FIFO and the LIFO inventory valuation methods.
2. 1(a)(ii)8 marksCompute EACH of the following costs at 30 May 2019 using the FIFO method: • Ending inventory cost • Cost of goods sold
3. 1(a)(iii)4 marksCompute the gross profit for Trelawney Inc. using the FIFO method if the items sold during May were at a sales price of $11 per unit.
4. 1(b)4 marksCompare the impact on the gross profit of an enterprise using the FIFO and LIFO methods during periods of inflation.
5. 1(c)4 marksOutline the TWO main differences between 'cost allocation' and 'cost apportionment'.
6. 1(d)9 marksCalculate the amount of overhead cost that will be assigned to EACH production department.
7. 2(a)6 marksExplain EACH of the following costing methods, giving ONE example of a type of business that may use each method: • Job-order costing • Process costing
8. 2(b)(i)2 marksCalculate the predetermined overhead rate used by Phillips Electrical.
9. 2(b)(ii)4 marksCalculate the total cost of the ending work-in-process inventory for both February and March.
10. 2(b)(iii)2 marksCalculate the total prime cost incurred during the month of March.
11. 2(b)(iv)3 marksCalculate the cost of goods manufactured for March.
12. 2(c)(i)2 marksCalculate the cost per unit of EACH of the following chocolate varieties, using the traditional costing system: • Decadent • Monumental
13. 2(c)(ii)4 marksDetermine the activity cost driver rate for set-up costs and inspection costs.
14. 2(c)(iii)8 marksFor the smooth chocolate variety, compute the estimated overhead cost per unit using the activity-based costing system.
15. 2(d)(i)1 markComplete the sentence: 'Absorption costing income will equal variable costing income if ..........'
16. 2(d)(ii)1 markComplete the sentence: 'Absorption costing, expenses all of the current period fixed overhead costs, as well as, ..........'
17. 2(d)(iii)1 markComplete the sentence: 'Absorption costing income will be greater than variable costing income if ..........'
18. 2(d)(iv)1 markComplete the sentence: 'The total amount of fixed overhead cost is expensed as ..........'
19. 3(a)(i)2 marksDefine the term 'standard costing'.
20. 3(a)(ii)6 marksOutline the THREE steps in the process of establishing direct materials standards.
21. 3(b)5 marksDiscuss the following statement in relation to the use of budgets in an organization: "A budget assists managers in managing and controlling the activities for which they are responsible."
22. 3(c)11 marksPrepare a purchases budget for the three months ending April 2021. (Use kg for the unit of the products.)
23. 3(d)(i)7 marksCalculate the net present value of the machine purchase.
24. 3(d)(ii)4 marksDetermine the discounted payback period.