Profit Impact – NBC Institute

FA – Nov 2020 – L1 – SA – Q5 – Accounting for Inventories in Accordance with IAS 2

Effect of closing inventory overvaluation on reported profit.

Question

The closing inventories of a firm were overvalued by N300,000 due to an overcast error in one of the inventory valuation sheets.

How would the correction of this affect the reported profit?
A. Increase reported profit by N300,000
B. Reduce reported profit by N300,000
C. No effect on the reported profit
D. Increase reported profit by N600,000
E. Reduce reported profit by N600,000

Answer

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Tags: Error Correction, Inventory Valuation, Profit Impact
Level: Level 1

Topic: Accounting for Inventories (IAS 2)
Series: NOV 2020

MA – May 2021 – L2 – Q2a – Other aspects of performance measurement

Identify and explain consequences of environmentally unfriendly corporate practices on profits.

Question

a) The Climate Adaptation Summit (CAS 2021) sought to tackle head on, the imminent catastrophe, which, the unattended climate change can unleash on the world. This is perceived to be more disastrous than the COVID-19 pandemic. So far, accountants have not agreed on how to quantify damages caused to the environment by a company’s operations in the accounts unless they come in the form of a fine.

Required:
Identify and explain FOUR (4) consequences of environmentally unfriendly practices of corporate entities that may negatively influence their profits. (5 marks)

Answer

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Tags: Corporate Social Responsibility, Environmental impact, Profit Impact
Level: Level 2

Topic: Other Aspects of Performance Measurement
Series: MAY 2021

IMAC – JULY 2024 – L1 – Q4 – Cost-Volume-Profit (CVP) Analysis

Calculate overhead absorption rates, explain under and over absorbed overheads, and discuss the effect of over absorbed overhead on profit and CVP analysis assumptions.

Question

a) The statement below shows the summary of overheads that have been apportioned to the four departments operating in MMS Ltd with additional information.

Department	1	2	3	4
Total overheads (GH¢)	45,000	35,000	20,000	40,000
Labour hours	1,200	1,000	800	1,500
Units produced	8,000	6,000	4,000	7,000
Machine hours	2,500	3,000	1,800	4,000
Prime cost per unit (GH¢)	42	25	30	34

Required:
i) Calculate THREE (3) plant-wide (blanket) overhead absorption rates. (6 marks)
ii) Calculate TWO (2) overhead absorption rates for department 1. (3 marks)

b) Explain under and over absorbed overheads. (3 marks)

c) State the effect of over absorbed overhead on reported profit. (3 marks)

d) State FOUR (4) assumptions underlying cost-volume-profit (CVP) analysis. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: CVP Assumptions, Overhead Absorption Rate, Profit Impact, Under and Over Absorbed Overheads
Level: Level 1

Topic: Cost-Volume-Profit (CVP) Analysis
Series: JULY 2023

FA – Nov 2020 – L1 – SA – Q5 – Accounting for Inventories in Accordance with IAS 2

Effect of closing inventory overvaluation on reported profit.

Question

The closing inventories of a firm were overvalued by N300,000 due to an overcast error in one of the inventory valuation sheets.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Error Correction, Inventory Valuation, Profit Impact
Level: Level 1

Topic: Accounting for Inventories (IAS 2)
Series: NOV 2020

MA – May 2021 – L2 – Q2a – Other aspects of performance measurement

Identify and explain consequences of environmentally unfriendly corporate practices on profits.

Question

Required:
Identify and explain FOUR (4) consequences of environmentally unfriendly practices of corporate entities that may negatively influence their profits. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Corporate Social Responsibility, Environmental impact, Profit Impact
Level: Level 2

Topic: Other Aspects of Performance Measurement
Series: MAY 2021

IMAC – JULY 2024 – L1 – Q4 – Cost-Volume-Profit (CVP) Analysis

Calculate overhead absorption rates, explain under and over absorbed overheads, and discuss the effect of over absorbed overhead on profit and CVP analysis assumptions.

Question

a) The statement below shows the summary of overheads that have been apportioned to the four departments operating in MMS Ltd with additional information.

Department	1	2	3	4
Total overheads (GH¢)	45,000	35,000	20,000	40,000
Labour hours	1,200	1,000	800	1,500
Units produced	8,000	6,000	4,000	7,000
Machine hours	2,500	3,000	1,800	4,000
Prime cost per unit (GH¢)	42	25	30	34

Required:
i) Calculate THREE (3) plant-wide (blanket) overhead absorption rates. (6 marks)
ii) Calculate TWO (2) overhead absorption rates for department 1. (3 marks)

b) Explain under and over absorbed overheads. (3 marks)

c) State the effect of over absorbed overhead on reported profit. (3 marks)

d) State FOUR (4) assumptions underlying cost-volume-profit (CVP) analysis. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: CVP Assumptions, Overhead Absorption Rate, Profit Impact, Under and Over Absorbed Overheads
Level: Level 1

Topic: Cost-Volume-Profit (CVP) Analysis
Series: JULY 2023

Question Tag: Profit Impact

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FA – Nov 2020 – L1 – SA – Q5 – Accounting for Inventories in Accordance with IAS 2

Effect of closing inventory overvaluation on reported profit.

MA – May 2021 – L2 – Q2a – Other aspects of performance measurement

Identify and explain consequences of environmentally unfriendly corporate practices on profits.

IMAC – JULY 2024 – L1 – Q4 – Cost-Volume-Profit (CVP) Analysis

Calculate overhead absorption rates, explain under and over absorbed overheads, and discuss the effect of over absorbed overhead on profit and CVP analysis assumptions.

FA – Nov 2020 – L1 – SA – Q5 – Accounting for Inventories in Accordance with IAS 2

Effect of closing inventory overvaluation on reported profit.

MA – May 2021 – L2 – Q2a – Other aspects of performance measurement

Identify and explain consequences of environmentally unfriendly corporate practices on profits.

IMAC – JULY 2024 – L1 – Q4 – Cost-Volume-Profit (CVP) Analysis

Calculate overhead absorption rates, explain under and over absorbed overheads, and discuss the effect of over absorbed overhead on profit and CVP analysis assumptions.

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FA – Nov 2020 – L1 – SA – Q5 – Accounting for Inventories in Accordance with IAS 2

Effect of closing inventory overvaluation on reported profit.

You're reporting an error for "FA – Nov 2020 – L1 – SA – Q5 – Accounting for Inventories in Accordance with IAS 2"

MA – May 2021 – L2 – Q2a – Other aspects of performance measurement

Identify and explain consequences of environmentally unfriendly corporate practices on profits.

You're reporting an error for "MA – May 2021 – L2 – Q2a – Other aspects of performance measurement"

IMAC – JULY 2024 – L1 – Q4 – Cost-Volume-Profit (CVP) Analysis

Calculate overhead absorption rates, explain under and over absorbed overheads, and discuss the effect of over absorbed overhead on profit and CVP analysis assumptions.

You're reporting an error for "IMAC – JULY 2024 – L1 – Q4 – Cost-Volume-Profit (CVP) Analysis"

FA – Nov 2020 – L1 – SA – Q5 – Accounting for Inventories in Accordance with IAS 2

Effect of closing inventory overvaluation on reported profit.

You're reporting an error for "FA – Nov 2020 – L1 – SA – Q5 – Accounting for Inventories in Accordance with IAS 2"

MA – May 2021 – L2 – Q2a – Other aspects of performance measurement

Identify and explain consequences of environmentally unfriendly corporate practices on profits.

You're reporting an error for "MA – May 2021 – L2 – Q2a – Other aspects of performance measurement"

IMAC – JULY 2024 – L1 – Q4 – Cost-Volume-Profit (CVP) Analysis

Calculate overhead absorption rates, explain under and over absorbed overheads, and discuss the effect of over absorbed overhead on profit and CVP analysis assumptions.

You're reporting an error for "IMAC – JULY 2024 – L1 – Q4 – Cost-Volume-Profit (CVP) Analysis"

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