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Cost and management accounting practice

Cost and management accounting practice

Test break-even, contribution and cash budgets on questions you have not seen.

Find your child's Principles of Accounting teacher

Try each question on paper first. The businesses and figures are invented for practice on the skills in SPM Accounting cost and management accounting.

For a timed run, set one up with the timed original practice session builder.

Questions

Q1. A furniture maker pays: (a) wood per table, (b) RM3 000 monthly workshop rent, (c) a carpenter paid RM40 per table made. Classify each as fixed or variable, and direct or indirect.

Answer

(a) Wood: variable, direct. (b) Rent: fixed, indirect. (c) Carpenter paid per table: variable, direct.

Q2. Each unit sells for RM60 and uses RM38 of variable items. Find contribution per unit.

Answer

60 − 38 = RM22 per unit.

Q3. The fixed items total RM13 200, and the contribution is from Q2. Find the break-even units and break-even sales.

Answer

Units = 13 200 ÷ 22 = 600. Sales = 600 × 60 = RM36 000.

Q4. Actual sales are 800 units. Find the margin of safety and the profit.

Answer

Margin of safety = 800 − 600 = 200 units, or RM12 000 in sales.

Profit = 800 × 22 − 13 200 = 17 600 − 13 200 = RM4 400. Check: 200 × 22 = RM4 400.

Q5. How many units are needed to earn a profit of RM8 800?

Answer

(13 200 + 8 800) ÷ 22 = 22 000 ÷ 22 = 1 000 units.

Q6. Variable items rise to RM41 per unit. Find the new break-even units.

Answer

New contribution = 60 − 41 = RM19. Break-even = 13 200 ÷ 19 = 694.7, so 695 units, rounded up.

Q7. A shop starts April with cash of RM2 000. April receipts are RM6 500 and payments are RM7 200.

May receipts are RM5 900 and payments are RM4 800. Find closing cash for each month.

Answer

April: 2 000 + 6 500 − 7 200 = RM1 300. May: 1 300 + 5 900 − 4 800 = RM2 400.

Q8. A shop records depreciation of RM400 for the month and pays RM1 500 in cash for a new shelf. Which belongs in the monthly cash budget?

Answer

The shelf payment of RM1 500 is a cash payment and goes in. Depreciation is an accounting charge with no cash leaving, so it stays out.

If you got these wrong

Label slips (Q1) go back to fixed, variable, direct and indirect costs. Contribution and break-even slips (Q2 to Q5) go to calculating contribution and break-even point.

Scenario slips (Q6) go to interpreting cost-volume-profit scenarios. Budget slips (Q7 and Q8) go to preparing a simple cash budget.

If you want a teacher to go through your working, see online one-to-one Accounting tuition.

Tools for this page

Common questions

How should I use this practice set?

Write your full working before opening each answer. Compare the method, not just the final figure, because a right answer from a wrong method can fail on the next question.

Are the questions from past SPM papers?

No. They are original questions with invented businesses and figures. They practise the skills in the four lessons.

Can I use a calculator?

Yes. The figures are kept simple, so a calculator helps check arithmetic while the reasoning stays yours.

What should I do after finishing?

Note each wrong answer with its cause, such as a cost label or rounding slip, in the mistake log. Repeat the skill where you slipped most.

Keep going

If break-even or budget answers differ from yours, a one-to-one Accounting lesson can find whether the gap is in classification, contribution or timing.

  • Online one-to-one lessons for your child with an experienced teacher.
  • Your first class is a one-hour trial, from RM50. The fee is agreed before you book.
  • Happy with the teacher? Continue with lessons of about 1.5 hours. If not, ask for another teacher.
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