Cima C02 Exam Question No 22

Question No 22:

At the beginning of the year GHI, had opening work-in-progress of $240,000. During the year, the following expenditure was incurred: $ Prime cost 720,000 Factory/production overheads 72,000 Closing work-in-progress 350,000
What was the factory/production cost of goods completed during?

A. $538,000
B. $610,000
C. $682,000
D. $902,000

Answer: C

Cima C02 Exam Question No 21

Question No 21:

SSG bought a machine for $40,000 in January year 1. The machine had an expected useful life of six years and an expected residual value of $10,000. The machine was depreciated on the straight-line basis where a full year’s charge in made in the year of purchase and none in the year of sale. In December year 4, the machine was sold for $15,000. The company has a policy in its internal accounts of combining the depreciation charge with the profit or loss on disposal of assets. Its year end is 31 December.
What is the total amount of profit/loss charged to the income statement over the life of the machine?

A. $15,000
B. $20,000
C. $25,000
D. $30,000

Answer: C

Cima C02 Exam Question No 20

Question No 20:

Which ONE of the following expenses should be included in prime cost in a manufacturing account?

A. Repairs to factory machinery.
B. Direct production wages.
C. Office salaries.
D. Factory insurance.

Answer: B

Cima C02 Exam Question No 19

Question No 19:

N purchased a machine for $15,000. The transportation costs were $1,500 and installation costs were $750. The machine broke down at the end of the first month in use and cost $400 to repair. N depreciates machinery at 10% each year on cost, assuming no residual value.
What is the net book value of the machine after one year?

A. $13,500
B. $14,850
C. $15,525
D. $15,885

Answer: C