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Also addresses treatment of by-products in joint processes, sales and material cost variances, labour efficiency ratios, and departmental overhead absorption rates.",{"@graph":14,"@context":66},[15,34,49],{"@type":16,"itemListElement":17},"BreadcrumbList",[18,23,27,31],{"item":19,"name":20,"@type":21,"position":22},"https://docshare.wps.com","Home","ListItem",1,{"item":24,"name":25,"@type":21,"position":26},"https://docshare.wps.com/document/","Document",2,{"item":28,"name":29,"@type":21,"position":30},"https://docshare.wps.com/document/exam/","Exam",3,{"item":32,"name":10,"@type":21,"position":33},"https://docshare.wps.com/document/ma2-specimen-exam-answers-marking-answers/181187/",4,{"url":32,"name":10,"@type":35,"author":36,"headline":10,"publisher":39,"fileFormat":42,"inLanguage":8,"description":12,"dateModified":43,"datePublished":43,"encodingFormat":42,"isAccessibleForFree":44,"interactionStatistic":45},"DigitalDocument",{"name":37,"@type":38},"Dozel","Person",{"url":19,"name":40,"@type":41},"DocShare","Organization","application/pdf","2026-09-02",true,{"@type":46,"interactionType":47,"userInteractionCount":4},"InteractionCounter",{"@type":48},"ViewAction",{"@type":50,"mainEntity":51},"FAQPage",[52,58,62],{"name":53,"@type":54,"acceptedAnswer":55},"Why would accountancy firms use job costing instead of service costing?","Question",{"text":56,"@type":57},"Each customer typically has different needs, so each job must be costed separately, making job costing most appropriate.","Answer",{"name":59,"@type":54,"acceptedAnswer":60},"How can a scatter graph and moving averages be used to estimate a line of best fit or trend?",{"text":61,"@type":57},"If the time series is approximately linear, estimate the line of best fit from a scatter graph. If it is not approximately linear, moving averages can still estimate the trend even without an obvious linear relationship.",{"name":63,"@type":54,"acceptedAnswer":64},"What causes a favourable or adverse material cost variance in the answers?",{"text":65,"@type":57},"An unexpected bulk discount or a reduction in actual material required leads to a favourable variance. A general shortage causing price increases or more wastage due to inexperience leads to an adverse variance.","https://schema.org",{"og:url":32,"og:type":68,"og:title":10,"og:site_name":40,"og:description":12},"article",{"robots":70,"canonical":32},"index,follow",{"doc_id":72,"site_id":7},181187,1788343697,{"code":4,"msg":75,"data":76},"success",[77,81,85,88,93,98,103,108,113,116,120],{"id":22,"doc_module":4,"doc_module_name":25,"category_name":78,"show_sort_weight":79,"slug":80},"Story & Novel",90,"story-novel",{"id":26,"doc_module":4,"doc_module_name":25,"category_name":82,"show_sort_weight":83,"slug":84},"Literature",80,"literature",{"id":33,"doc_module":4,"doc_module_name":25,"category_name":29,"show_sort_weight":86,"slug":87},70,"exam",{"id":89,"doc_module":4,"doc_module_name":25,"category_name":90,"show_sort_weight":91,"slug":92},5,"Comic",60,"comic",{"id":94,"doc_module":4,"doc_module_name":25,"category_name":95,"show_sort_weight":96,"slug":97},6,"Technology",50,"technology",{"id":99,"doc_module":4,"doc_module_name":25,"category_name":100,"show_sort_weight":101,"slug":102},7,"Healthcare",40,"healthcare",{"id":104,"doc_module":4,"doc_module_name":25,"category_name":105,"show_sort_weight":106,"slug":107},8,"Research & Report",30,"research-report",{"id":109,"doc_module":4,"doc_module_name":25,"category_name":110,"show_sort_weight":111,"slug":112},9,"Religion & Spirituality",20,"religion-spirituality",{"id":111,"doc_module":4,"doc_module_name":25,"category_name":114,"show_sort_weight":111,"slug":115},"World Cup","world-cup",{"id":117,"doc_module":4,"doc_module_name":25,"category_name":118,"show_sort_weight":117,"slug":119},10,"Lifestyle","lifestyle",{"id":121,"doc_module":4,"doc_module_name":25,"category_name":122,"show_sort_weight":89,"slug":123},19,"General","general",{"code":4,"msg":75,"data":125},{"doc_id":72,"user_id":126,"nickname":37,"user_avatar":127,"doc_module":4,"category_id":33,"category_name":29,"doc_title":10,"doc_description":12,"doc_content":128,"file_id":129,"file_url":130,"file_type":131,"file_size":132,"view_count":4,"is_deleted":4,"is_public":22,"is_downloadable":22,"audit_status":22,"page_count":99,"language":133,"language_code":8,"site_id":7,"html_lang":8,"table_of_contents":134,"faqs":135,"seo_title":136,"seo_description":12,"update_tm":73,"read_time":137},962085662650,"https://ap-avatar.wpscdn.com/davatar_29158cc5080c5b710cf443261637dec0","| Question | Correct Answer |\n| --- | --- |\n| 1 | Service costing\u003Cbr>Job costing\u003Cbr>Accountancy firms provide a service and are most likely to use job costing as each of their customers have different needs and each job will have to be costed separately. |\n| 2 | Where the time series is approximately linear, the line of best fit can be estimated on a scatter graph – True\u003Cbr>Where the time series is not approximately linear, moving averages can be calculatedTrue\u003Cbr>Scatter graphs can be used to estimate a line of best fit, but only where the relationship shown is approximately linear. Where no obvious linear relationship exists, moving averages can still be used to estimate the trend. |\n| 3 | Line J\u003Cbr>At the level of activity shown, Line J represents the total contribution, At the breakeven point the total contribution will equal the total fixed costs. Below this level, the activity will make a loss and above this level the activity will make a profit. |\n| 4 | Has low sales value relative to joint products\u003Cbr>Accounted for by crediting the net realisable value to the work-in-progress account\u003Cbr>By-products are products which are produced as part of a process, but which are incidental and have an insignificant value compared to the main product or products from the process. They are accounted for by treating their net realisable value as a deduction in costs which is a credit to the work-in-progress account. The by-product does not pick up a share of the joint costs. |\n| 5 | $5,200 favourable\u003Cbr>Sales price variance is the difference between the actual sales revenue and the actual sales units at the standard selling price. The standard selling price is 50,000 / 5,000 =$10. The sales price variance is ((57,200 –(5,200 x 10) = $5,200 . The actual sales are higher; therefore, the variance is favourable. |\n| 6 | $375\u003Cbr>The total annual inventory holding cost is calculated as ((order quantity / 2) x holding cost per unit) . ((250 / 2) x 3) = $375. |\n| 7 | Based on machine hours for Cutting and labour hours for Finishing\u003Cbr>The basis for overhead absorption is generally based on the most important element for each department. In this case, machine hours are the most significant element for the Cutting cost centre and labour hours are the most significant element for the Finishing cost centre. |\n| 8 | 32240\u003Cbr>The depreciation will be based on the cost of the machine less the residual value ($166,200- $5,000) = $161, 200. Year 4 will pick up 20% of the total depreciation. (0 .20 x 161,200) = $32,240 . |\n\n\n| 9 | Unexpected bulk discount offered by current supplier Less material needed due to change in product design\u003Cbr>A general shortage of material causing price increases or inexperienced staff causing more material wastage would result in an adverse material cost variance. An unexpected bulk discount or a reduction in the actual material required for production would result in a favourable material cost variance. |\n| --- | --- |\n| 10 | Sales price variance – Favourable\u003Cbr>Sales activity (volume) variance – Adverse\u003Cbr>Sales of 20,000 were budgeted for, but actual sales were 19,000 resulting in an adverse sales activity (volume) variance. The budgeted sales price was $6 per unit but the actual sales price was ($133,000/19,000) = $7, resulting in a favourable sales price variance. |\n\n\n|  |  |\n| --- | --- |\n| 11 | 19250\u003Cbr>The project requires 400kg of material. The 150kg in inventory can be used as part of this. The alternative use for this is to sell it at $40/kg which is the relevant cost. For the remaining 250kg, these will have to be purchased at the current purchase price of $53/kg. The total relevant cost for the project is (150 x 40) + (250 x 53) = $19,250 |\n| 12 | Department C\u003Cbr>\u003Cbr>Dept A 60,000 / 10,000 = 6\u003Cbr>Dept B 90,000 / 15,000 = 6 Dept C 120,000 / 12,500 = 9.6 Dept D 80,000 / 10,000 = 8\u003Cbr>Therefore, Department C has the highest absorption rate. |\n| 13 | $83,000\u003Cbr>Using the High Low method, the variable cost = ($72,00","cbCaiixXZLGB52vI","https://ap.wps.com/l/cbCaiixXZLGB52vI","pdf",201874,"English","# Questions and correct answers\n## Costing, variances, and budget calculations\n## Trend estimation and accounting concepts","[{\"question\":\"Why would accountancy firms use job costing instead of service costing?\",\"answer\":\"Each customer typically has different needs, so each job must be costed separately, making job costing most appropriate.\"},{\"question\":\"How can a scatter graph and moving averages be used to estimate a line of best fit or trend?\",\"answer\":\"If the time series is approximately linear, estimate the line of best fit from a scatter graph. If it is not approximately linear, moving averages can still estimate the trend even without an obvious linear relationship.\"},{\"question\":\"What causes a favourable or adverse material cost variance in the answers?\",\"answer\":\"An unexpected bulk discount or a reduction in actual material required leads to a favourable variance. A general shortage causing price increases or more wastage due to inexperience leads to an adverse variance.\"}]","MA2 Specimen exam answers - Marking answers | PDF",18]