F5_ACCA英国注册会计师考试试题及答案P3-新东方在线职业题库

This objective test question contains a question type which will only appear in a computer-based exam, but this question provides valuable practice for all students whichever version of the exam they are taking.

Pro is a division of Mo and is an investment centre. The head office controls finance, HR and IT expenditure but all other decisions are devolved to the local centres.

The statement of financial position for Pro shows net value of all assets and liabilities to be $4,500m. It carries no debt itself although the group has debt liabilities.

The management accounts for income read as follows:

$m

Revenue 3,500

Cost of sales 1,800

Local administration 250

IT costs 50

Distribution 80

Central administration 30

Interest charges 90

Net profit 1,200

Ignore taxation.

If the cost of capital is 12%, what is the division’s residual income?

This objective test question contains a question type which will only appear in a computer-based exam, but this question provides valuable practice for all students whichever version of the exam they are taking.

Pro is a division of Mo and is an investment centre. The head office controls finance, HR and IT expenditure but all other decisions are devolved to the local centres.

The statement of financial position for Pro shows net value of all assets and liabilities to be $4,500m at the start of the year and $4,890m at the end. It carries no debt itself although the group has debt liabilities.

The management accounts for income read as follows:

$m

Revenue 3,500

Cost of sales 1,800

Local administration 250

IT costs 50

Distribution 80

Central administration 30

Interest charges 90

Net profit 1,200

Ignore taxation.

What is the divisional ROI to the nearest % point?

This objective test question contains a question type which will only appear in a computer-based exam, but this question provides valuable practice for all students whichever version of the exam they are taking.

At the end of 20X1, an investment centre has net assets of $1m and annual operating profits of $190,000. However, the bookkeeper forgot to account for the following:

A machine with a net book value of $40,000 was sold at the start of the year for $50,000, and replaced with a machine costing $250,000. Both the purchase and sale are cash transactions. No depreciation is charged in the year of purchase or disposal. The investment centre calculates return on investment (ROI) based on closing net assets.

Assuming no other changes to profit or net assets, what is the return on investment (ROI) for the year?

This objective test question contains a question type which will only appear in a computer-based exam, but this question provides valuable practice for all students whichever version of the exam they are taking.

TM plc makes components which it sells internally to its subsidiary RM Ltd, as well as to its own external market.

The external market price is $24.00 per unit, which yields a contribution of 40% of sales. For external sales, variable costs include $1.50 per unit for distribution costs, which are not incurred on internal sales.

TM plc has sufficient capacity to meet all of the internal and external sales. The objective is to maximise group profit.

At what unit price should the component be transferred to RM Ltd?

A division with capital employed of $400,000 currently earns an ROI of 22%. It can make an additional investment of $50,000 for a five year life with nil residual value. The average net profit from this investment would be $12,000 after depreciation. The division's cost of capital is 14%.

What are the residual incomes before and after the investment?

The transfer pricing system operated by a divisional company has the potential to make a significant contribution towards the achievement of corporate financial objectives.

Required

Explain the potential benefits of operating a transfer pricing system within a divisionalised company.

Choose the correct words from those highlighted.

ROI based on profits as a % of net assets employed will (a) increase/decrease as an asset gets older and its book value (b) increases/reduces. This could therefore create an (c) incentive/disincentive to investment centre managers to reinvest in new or replacement assets.

An investment centre with capital employed of $570,000 is budgeted to earn a profit of $119,700 next year. A proposed fixed asset investment of $50,000, not included in the budget at present, will earn a profit next year of $8,500 after depreciation. The company's cost of capital is 15%. What is the budgeted ROI and residual income for next year, both with and without the investment?

ROI Residual income

Without investment ……………….. ………………..

With investment ……………….. ………………..

Fill in the blanks.

Ideally, a transfer price should be set that enables the individual divisions to maximise their profits at a level of output that maximises ……………………. .

The transfer price which achieves this is unlikely to be a ……………….. transfer price or a ……………. transfer price.

If optimum decisions are to be taken, transfer prices should reflect …………………. .

There are two profit centres, A and B. Profit centre A transfers a product to profit centre B, but could also sell the product in an external market at a price of $30. The marginal cost of making the product in profit centre A is $8 per unit and the full cost is $14 per unit. There would be a variable cost of $1 per unit for sales and distribution to customers in the external market, but no such costs for internal transfers.

To avoid disputes between the profit centre managers, what should be the transfer price for the product?

$ _______

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