CPA EXAM 2025/2026 ACTUAL ACCOUNTING
MANAGEMENT QUESTIONS AND ANSWERS GRADED A+
If the total cost of a job is $4200
a) When profit is 25% of sales, the correct selling price is
b) When profit is 25% of cost, the correct selling price is
a) 4200 * (100/75) = $5600
b) 4200 * 25% = $5250
A company manufactures chemical X in a single process. At the start of the month there was
no work-in-process. During the month 300 litres of raw material were input into the process
at a total cost of $6000. Conversion costs during the month amounted to $4500. At the end
of the month 250 litres of chemical X were transferred to finished goods inventory. The
remaining work-in-process was 100 percent complete with respect to materials and 50 per
cent complete with respect to conversion costs. There were no losses in the process.
The equivalent units for closing work-in-process at the end of the month would have been
Material Conversion costs
A 25 litres 25 litres
B 25 litres 50 litres
,C 50 litres 25 litres
D 50 litres 50 litres
2. If there had been a normal process loss of 10 per cent of input during the month the
value of this loss would have been
A nil.
B $450.
C $600.
D $1050.
1=C
2=A
3. 3 In a process account, abnormal losses are valued
A at zero.
B at their scrap value.
C at the cost of raw materials.
D the same as good production. D
,3.4 A company needs to produce 340 litres of chemical Y. There is a normal loss of 10
per cent of the material input into the process. During a given month the company did
produce 340 litres of good production, although there was an abnormal loss of 5 per cent
of the material input into the process.
How many litres of material were input into the process during the month?
A 357 litres
B 374 litres
C 391 litres
D 400 litres D
3.5 &6 A company produces a certain food item in a manufacturing process. On 1
November, there was no opening inventory of work in process. During November, 500 units
of material were input to the process, with a cost of $9000. Direct labour costs in November
were $3840. Production overhead is absorbed at the rate of 200 per cent of direct labour
costs. Closing inventory on 30 November consisted of 100 units which were 100 per cent
complete as to materials and 80 per cent complete as to labour and overhead. There was
no loss in process.
5 The full production cost of completed units during November was
A $10 400.
B $16 416.
C $16 800.
D $20 520.
, 6 The value of the closing work in process on 30 November is
A $2440.
B $3720.
C $4104.
D $20 520.
5=C
6=B
3.7 How is revenue from scrap treated?
A as a bonus to all employees
B as an addition to sales revenue
C as a reduction in costs of processing
D as a bonus to production employees C
REV 1.1 Possum Ltd is now engaged solely in a service industry having previously been
involved in manufacturing. Its chief accountant is considering which of the following
management accounting
processes the company needs to retain
I. capacity planning.
II. inventory valuation.
MANAGEMENT QUESTIONS AND ANSWERS GRADED A+
If the total cost of a job is $4200
a) When profit is 25% of sales, the correct selling price is
b) When profit is 25% of cost, the correct selling price is
a) 4200 * (100/75) = $5600
b) 4200 * 25% = $5250
A company manufactures chemical X in a single process. At the start of the month there was
no work-in-process. During the month 300 litres of raw material were input into the process
at a total cost of $6000. Conversion costs during the month amounted to $4500. At the end
of the month 250 litres of chemical X were transferred to finished goods inventory. The
remaining work-in-process was 100 percent complete with respect to materials and 50 per
cent complete with respect to conversion costs. There were no losses in the process.
The equivalent units for closing work-in-process at the end of the month would have been
Material Conversion costs
A 25 litres 25 litres
B 25 litres 50 litres
,C 50 litres 25 litres
D 50 litres 50 litres
2. If there had been a normal process loss of 10 per cent of input during the month the
value of this loss would have been
A nil.
B $450.
C $600.
D $1050.
1=C
2=A
3. 3 In a process account, abnormal losses are valued
A at zero.
B at their scrap value.
C at the cost of raw materials.
D the same as good production. D
,3.4 A company needs to produce 340 litres of chemical Y. There is a normal loss of 10
per cent of the material input into the process. During a given month the company did
produce 340 litres of good production, although there was an abnormal loss of 5 per cent
of the material input into the process.
How many litres of material were input into the process during the month?
A 357 litres
B 374 litres
C 391 litres
D 400 litres D
3.5 &6 A company produces a certain food item in a manufacturing process. On 1
November, there was no opening inventory of work in process. During November, 500 units
of material were input to the process, with a cost of $9000. Direct labour costs in November
were $3840. Production overhead is absorbed at the rate of 200 per cent of direct labour
costs. Closing inventory on 30 November consisted of 100 units which were 100 per cent
complete as to materials and 80 per cent complete as to labour and overhead. There was
no loss in process.
5 The full production cost of completed units during November was
A $10 400.
B $16 416.
C $16 800.
D $20 520.
, 6 The value of the closing work in process on 30 November is
A $2440.
B $3720.
C $4104.
D $20 520.
5=C
6=B
3.7 How is revenue from scrap treated?
A as a bonus to all employees
B as an addition to sales revenue
C as a reduction in costs of processing
D as a bonus to production employees C
REV 1.1 Possum Ltd is now engaged solely in a service industry having previously been
involved in manufacturing. Its chief accountant is considering which of the following
management accounting
processes the company needs to retain
I. capacity planning.
II. inventory valuation.
