UNIVERSITY OF EAST ANGLIA
Norwich Business School
PG Examination 2013-14
ACCOUNTING, FINANCE AND TECHNOLOGY MANAGEMENT
NBS-MC05
Time allowed: 2 hours
Answer ONE question from Section A and ALL multiple choice questions from
Section B
All questions in Section A carry equal marks (Total 50 marks)
All questions in Section B carry equal marks (Total 50 marks)


The Section A answer MUST be completed in the yellow answer booklet
provided
Section B answers MUST be completed on the separate answer grid provided

The yellow answer booklet and the answer grid MUST be attached together at
the end of the examination with the tag provided

Present value tables are attached at the end of the paper

Approved calculators may be used in this examination
Notes are not permitted in this examination
Do not turn over until you are told to do so by the Invigilator.
NBS-MC05
Copyright of the University of East Anglia
Module Contact: Dr P Barrow, NBS
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SECTION A
1.
a) Briefly discuss the difference between data, information and knowledge. Give
examples to illustrate your answers.
(10 marks)
b) Describe how an Information System could properly be described as a system
and describe how the concept of the Emergent Property is critical to the
development and use of Information Systems.
(15 marks)
c) Describe what is meant by Systems Failure and how it differs from other sorts
of failure. Critically analyse either an Operations systems failure or an
Information Systems failure, detailing how and why it failed and what could
have been done to prevent the failure from happening.
(25 marks)
(Total: 50 marks)
2.
a) What is the difference between e-commerce and e-business? Use examples
to illustrate your answer.
(10 marks)
b) M-commerce is one classification of e-commerce. Name five others. For
each, give an example of this type of e-commerce in practise.
(15 marks)
c) Critically analyse what advantages e-commerce has provided for both the
consumer and society.
(25 marks)
(Total: 50 marks)
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3.
a) What is meant by outsourcing?
(5 marks)
b) What advantages can an organization hope to gain through outsourcing?
Give examples to illustrate your answer.
(15 marks)
c) A senior executive has asked you to look into the possibility of outsourcing
some of the organizational functions to the other side of the world, but she
has heard that there are some well-known disadvantages in doing so. Write a
report that critically discusses, and from the organisations’s perspective, the
kind of disadvantages (both cultural and otherwise) of outsourcing of this
nature.
(30 marks)
(Total: 50 marks)
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SECTION B
4. Consider the following statements:
(i) When deciding between alternative courses of action, all past costs should be
ignored.
(ii) When deciding between alternative courses of action, all past and future costs
should be taken into account.
Which of these statements is/are correct?
A)
B)
C)
D)
(i) only
(i) and (ii)
Neither (i) nor (ii)
(ii) only
5. Which one of the following would be a fixed cost of a manufacturer of filing
cabinets?
A)
B)
C)
D)
Electricity consumed by production equipment
The cost of metal needed to manufacture the filing cabinets
The rent of the factory
The cost of plastic packaging to wrap the finished product
6. Which one of the following best describe a variable cost?
A)
B)
C)
D)
One that does not change proportionately with output
One that is constant per unit of output, irrespective of the level of output
One that is affected by the time period
One that is affected by the general level of inflation
7. Beachcomber produces beach-balls and sells 15,000 in a year. Variable costs for
the year are £9,000 and fixed costs amount to £3,000. What is the total cost per
unit?
A)
B)
C)
D)
£0.80
£0.75
£0.20
£0.60
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8. Which one of the following is the correct description of the break-even point?
A)
B)
C)
D)
Where total revenue equals total fixed costs
Where total revenue equals total contribution
Where total revenue equals total fixed and variable costs
Where total revenue equals total variable costs
9. With fixed overheads at £16,000 per period, the variable cost at £7.50 per unit and
each unit sold for £10, we can infer that the break-even point (in units) is:
A)
B)
C)
D)
1,600 units
40,000 units
2,134 units
6,400 units
10. A business produces a product that is sold for £10 each. Variable costs are £4
for each product and total fixed costs are £2,400. During the year, the business
sold 600 units of the product. What is the margin of safety?
A)
B)
C)
D)
360 units
240 units
200 units
400 units
TURN OVER
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11. Sebastian Products Ltd produces a fire alarm with the following costs per unit:
£
Variable costs
40
Fixed costs
15
Total
55
The fire alarm is sold for £80 each. Variable costs consist of 25% materials and
75% labour.
The business has reached the limits of its productive capacity and a
subcontractor has offered to provide the labour input required to make additional
fire alarms for the business, in the short term. Fixed costs will not increase.
What is the maximum price that Sebastian Products Ltd would be prepared to
pay the subcontractor for each fire alarm produced?
A)
B)
C)
D)
£30
£70
£55
£25
12. An alternative to the term full costing is ___________ costing.
A)
B)
C)
D)
Absorption
Variable
Process
Batch
13. The rent paid for a factory would be described as which ONE of the following
when assessing the cost of products made in the factory?
A)
B)
C)
D)
A direct cost
An indirect cost
A relevant cost
An opportunity cost
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14. Consider the following statements:
(i) Direct costs are those that vary with the level of output.
(ii) Indirect costs are those that do not vary with the level of output.
Which of these statements is/are correct?
A)
B)
C)
D)
(i) and (ii)
Neither (i) nor (ii)
(i) only
(ii) only
15. Which ONE of the following is a direct labour cost?
A)
B)
C)
D)
Costs of the payroll accounting section
The wages of an operative paid on the basis of output achieved
Supervisors’ salaries in the factory
A bonus paid to the store man
16. A company gives a quotation for a job which requires 100 kg of materials at £10
per kg, 25 direct labour hours at £40 per hour and overheads recovered on the
basis of kg used, at £8 per kg. A profit mark-up of 60% is added.
What is the price chargeable to the customer?
A)
B)
C)
D)
£3,248
£2,800
£4,480
£5,600
17. A cost centre is:
A)
B)
C)
D)
An area of the business accountable for both costs and revenues
A production department where all production costs are aggregated
The part of the business where all costs are paid to suppliers
An area for which costs are accumulated
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18. What is the validity of the following statements?
(i) Modern business is characterised by overhead costs that are largely incurred
in support of direct labour.
(ii) Modern business is characterised by a large service industry sector.
Statement
(i)
(ii)
True
True
True
False
False
True
False
False
A)
B)
C)
D)
19. In activity-based costing (ABC), costs are allocated into which one of the
following?
A)
B)
C)
D)
Cost centres
Cost groups
Cost accounts
Cost pools
20. Which one of the following would normally be considered to be part of the master
budgets of a business?
A) Capital expenditure budget
B) Budgeted income statement
C) Sales budget
D) Production budget
21. Which ONE of the following is a system of control whereby feedback on actual
performance, as compared with planned performance, can be provided so as to
allow senior managers to focus on areas of poor performance?
A)
B)
C)
D)
Management by exception
Management by control
Management by budgeting
Management by objectives
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22. Saltram Ltd has following budgeted sales for May, June and July:
Credit sales
Cash sales
May
£
60,000
72,000
June
£
75,000
45,000
July
£
80,000
48,000
60% of credit customers pay after 2 months and 40% pay after 1 month. Those
that pay after 1 month receive a 10% discount for prompt payment. During July it
is expected that a warehouse will be sold for £100,000 to help pay off the
business’s overdraft.
What are the total budgeted cash receipts for July?
A)
B)
C)
D)
£211,000
£280,000
£228,000
£214,000
23. Consider the following data for the month of January:
Opening inventories
Sales
80 units
660 units
If closing inventories have to be 50% higher than the previous month then
production will have to be:
A)
B)
C)
D)
700 units
720 units
540 units
600 units
24. The budgeted sales for the next four quarters are £192,000, £288,000, £288,000
and £336,000. It is estimated that sales will be paid as follows: 75% of the total
will be paid in the quarter that the sales were made. Of the balance, 50% will be
paid in the quarter after the sale was made. The remaining 50% will be paid in
the quarter after this. The amount of cash received in quarter 3 will be:
A)
B)
C)
D)
£240,000
£144,000
£324,000
£276,000
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25. The planned sales volume is 300 units per month. The planned inventories at the
start of the month are 50 units and the planned inventories at the end of the
month are 40 units. The cost per unit is £5. What is the amount of the purchases
budget for the month?
A)
B)
C)
D)
£1,450
£1,750
£1,550
£1,700
26. If we deduct the favourable variances to the budgeted cost and then add the
adverse variances, which ONE of the following does this equal?
A)
B)
C)
D)
Actual profit
Zero
Flexed profit
Original profit
27. A project costs £18,000 and is expected to yield operating profits of £1,000 per
year over its useful life. What is the accounting rate of return?
A) 44.4%
B) 5.5%
C) 8.3%
D) 16.7%
28. The payback method is primarily focused on:
A)
B)
C)
D)
Liquidity
Efficiency
Wealth enhancement
Profitability
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29. A business invests £200,000 immediately in a machine that will be written off in
equal instalments over four years. The estimated residual value of the machine is
£40,000. The estimated annual profits from the machine are £60,000.
What is the payback period?
A)
B)
C)
D)
2 years
1 year 7 months
3 years 4 months
2 years 8 months
30. An investment project is planned at a cost of £80,000. Expected inflows of cash
are:
Year 1
Year 2
Year 3
Year 4
£30,000
£20,000
£20,000
£20,000
What is the payback period?
A)
B)
C)
D)
4 years
2.5 years
3 years
3.5 years
31. A business is considering an investment that will generate a cash flow in exactly
five years’ time. The discount rate associated with the investment is 15% per
year. To deduce the net present value (NPV) of the projected cash flow, we have
to multiply the amount of the cash flow by:
A)
B)
C)
D)
1/(0.15)5
(1.15)5
(0.15)5
1/(1.15)5
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32. The cost of a project is £100,000 and the project is expected to yield the
following returns:
Year 1
Year 2
Year 3
£90,000
£80,000
£70,000
If the discount rate is 12%, the net present value (NPV) of the project will be (to
nearest £000):
A)
B)
C)
D)
£44,000
£94,000
£140,000
£294,000
33. The internal rate of return can best be described as which ONE of the following?
A) The discount rate at which a set of cash flows has a positive net present value
B) The return required by the managers of the business
C) The rate required to finance an investment
D) The discount rate at which a set of cash flows has a zero net present value
(Total 50 marks)
END OF PAPER
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END OF PRESENT VALUE TABLES
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