Page 251 - BA2 Integrated Workbook - Student 2017

Answers to supplementary objective test

questions

CHAPTER 1 – THE CONTEXT OF MANAGEMENT ACCOUNTING

1.1 D

Information for strategic management tends to be summarised and information
for operational management tends to be provided frequently

1.2 The complete sentences are:

Management accounting can be presented in any format required by
management.

Financial accounting mainly deals with historical financial information.

The main purpose of financial accounting is to produce statutory financial
statements.

1.3 E

The principle of confidentiality states that you should not disclose professional
information unless you have specific permission, or a legal or professional duty,
to do so.

CHAPTER 2 – COST IDENTIFICATION AND CLASSIFICATION

2.1 C and E

Alternatives A, B and C are all direct labour.

A stores assistant and a cook in the factory canteen are examples of indirect
labour as they are not working directly on producing the organisation’s output.

2.2 The correct sentences are:

Prime cost is the total of direct costs

Variable costs are conventionally deemed to be constant per unit of activity

Fixed costs vary per unit of activity where activity levels change

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