Organisation : Association of Chartered Certified Accountants
Exam : ACCA Exam
Document Type : Sample Question Paper
Category or Subject : Performance Management
Year : 2016
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ACC Performance Management Questions Paper
Time allowed Reading and planning: 15 minutes
Writing: 3 hours
This question paper is divided into two sections :
Section A – ALL 20 questions are compulsory and MUST be attempted
Related : National Senior Certificate Exam Sample Question Paper : www.southafricain.com/1696.html
** Section B – ALL FIVE questions are compulsory and MUST be attempted
** Formulae Sheet is on page 7.
** Do NOT open this question paper until instructed by the supervisor.
** During reading and planning time only the question paper may be annotated.
** You must NOT write in your answer booklet until instructed by the supervisor.
** Do NOT record any of your answers on the question paper.
** This question paper must not be removed from the examination hall.
Section B : ALL FIVE questions are compulsory and MUST be attempted
Please write your answers to all parts of these questions on the lined pages within the Candidate Answer Booklet.
1 Jewel Co is setting up an online business importing and selling jewellery headphones. The cost of each set of headphones varies depending on the number purchased, although they can only be purchased in batches of 1,000 units. It also has to pay import taxes which vary according to the quantity purchased.
(a) Calculate how many batches Jewel Co should import and sell. (6 marks)
(b) Explain why Jewel Co could not use the algebraic method to establish the optimum price for its product.(4 marks)
(a) State the breakeven sales revenue for Swim Co and estimate, to the nearest $10,000, the company’s profit if 500 athletes attend a training course. (2 marks)
(b) Using the chart above, explain the cost and revenue structure of the company. (8 marks)
3 Shoe Co, a shoe manufacturer, has developed a new product called the ‘Smart Shoe’ for children, which has a built-in tracking device. The shoes are expected to have a life cycle of two years, at which point Shoe Co hopes to introduce a new type of Smart Shoe with even more advanced technology. Shoe Co plans to use life cycle costing to work out the total production cost of the Smart Shoe and the total estimated profit for the two-year period.
Applying the principles of life cycle costing, calculate the total expected profit for Shoe Co for the two-year period. (10 marks)
4 A manufacturing company, Man Co, has two divisions: Division L and Division M. Both divisions make a single standardised product. Division L makes component L, which is supplied to both Division M and external customers. Division M makes product M using one unit of component L and other materials. It then sells the completed product M to external customers. To date, Division M has always bought component L from Division L.
(a) Calculate the incremental profit/(loss) per component for the group if Division M accepts the new supplier’s offer and recommend how many components Division L should sell to Division M if group profits are to be maximised. (3 marks)
(b) Using the quantities calculated in (a) and the current transfer price, calculate the total annual profits of each division and the group as a whole. (6 marks)
(c) Discuss the problems which will arise if the transfer price remains unchanged and advise the divisions on a suitable alternative transfer price for component L. (6 marks)
5 Glove Co makes high quality, hand-made gloves which it sells for an average of $180 per pair. The standard cost of labour for each pair is $42 and the standard labour time for each pair is three hours. In the last quarter, Glove Co had budgeted production of 12,000 pairs, although actual production was 12,600 pairs in order to meet demand. 37,000 hours were used to complete the work and there was no idle time. The total labour cost for the quarter was $531,930.
(a) Calculate the total labour rate and total labour efficiency variances for the last quarter. (2 marks)
(b) Analyse the above total variances into component parts for planning and operational variances in as much detail as the information allows. (6 marks)
(c) Assess the performance of the production manager for the last quarter. (7 marks)