Miscellanous Exam Qs

Question 1

How do you out a payables payment period?

Answer 1

Average payables / cost of sales x365

Question 2

What is the two bin system?

Answer 2

It is a type of re-order level system

Question 3

What should be included in a division’s residual income calculation?

Answer 3

Only controllable things

Question 4

What is residual income?

Answer 4

It is net profit after economic cost of investment is taken into account

Question 5

What is the high-low method of cost estimation useful for?

Answer 5

Calculating the budgeted cost for the actual activity

Question 6

How do you work out a cash operating cycle figure?

Answer 6

Inventory days + receivables days - payables days

Question 7

How do you work out cash operating cycle?

Answer 7

Add all part from creditors which you take away

Question 8

BREAKEVEN SALES REVENUE = FIXED COSTS / CONTRIBUTION RATIO

Answer 8

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Question 9

Why is accounting rate of return good?

Answer 9

It takes account of returns over the entire project life and is familiar as a %