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Free Questions › ACCA › Performance Management
Free ACCA Performance Management Practice Questions & Answers
400 exam-style Performance Management questions. Pick your answer, hit Check answer, and see the worked solution — free to start, no signup.
100% free · No login to startQuestion 391
Standard: 5 units of material per product at 6/unit. Actual output: 200 products. Actual material used: 1,100 units at 5.80/unit. Calculate total material variance.
Select an option first.
Correct answer: A — Material price variance 220F; usage variance 600A; total 380A
Explanation: A
Question 392
A company compares budget to actual: Budget revenue 2,000,000; budget variable costs 1,200,000; budget contribution 800,000; budget fixed costs 300,000; budget profit 500,000. Actual revenue 1,900,000 for 9,500 units (budget 10,000); actual VC 1,100,000; actual FC 310,000. Calculate main variances.
Select an option first.
Correct answer: C — Sales price 0; volume 80,000A; VC 60,000F; FC 10,000A; profit 490,000
Explanation: C
Question 393
Full standard cost data/unit: Material 4 kg at 5 = 20; Labour 3 hrs at 9 = 27; FO (based on 3 hrs) OAR = 6/hr = 18. Budget: 2,000 units. Actual: 1,800 units produced; material 7,400 kg at 5.20; labour 5,600 hrs at 8.80; actual FO 34,000. Prepare full cost variance statement.
Select an option first.
Correct answer: B — Mat price 1,480 fav; Mat usage 1,000 adv; Lab rate 1,120 fav; Lab eff 1,800 adv; FO exp 2,000 adv; FO vol 3,600 adv
Explanation: B
Question 394
An adverse material usage variance has occurred for 8 consecutive months. Investigation reveals the cause is consistently substandard raw material from a new cheaper supplier (causing the favourable price variance each month). Evaluate the total effect and recommend.
Select an option first.
Correct answer: B — The net financial effect must be calculated: compare total favourable price variances with total adverse usage variances. If usage losses exceed price savings, the cheaper supplier decision is destroying value. Additionally, quality failures may cause downstream customer satisfaction and rework costs not captured in variance reports
Explanation: B
Question 395
A company finds: favourable sales volume variance 20,000; adverse sales price variance 15,000; favourable material usage variance 8,000; adverse material price variance 12,000; favourable labour efficiency variance 6,000; adverse fixed overhead expenditure variance 4,000; adverse fixed overhead volume variance 3,000. Reconcile from budget profit of 100,000 to actual profit.
Select an option first.
Correct answer: B — Actual profit 100,000 + 20,000 - 15,000 + 8,000 - 12,000 + 6,000 - 4,000 - 3,000 = 100,000
Explanation: B
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Question 396
A company has the following data: Budget profit 180,000. Actual profit 156,000. Variances: Sales volume (contribution basis): 25,000 F. Sales price: 18,000 A. Material price: 8,000 F. Material usage: 12,000 A. Labour rate: 6,000 A. Labour efficiency: 14,000 F. Variable overhead: 5,000 A. Fixed overhead expenditure: 9,000 A. Fixed overhead volume: 3,000 F. Verify reconciliation.
Select an option first.
Correct answer: C — 180,000+25,000-18,000+8,000-12,000-6,000+14,000-5,000-9,000+3,000=180,000. Net variances=0. Actual should be 180,000.
Explanation: C
Question 397
Reconciliation: Budget profit 250,000. Variances: Sales price 30,000F; Sales volume (contribution) 15,000A; Material price 8,000A; Material usage 5,000F; Labour rate 12,000A; Labour efficiency 18,000F; Variable OH 4,000A; Fixed OH expenditure 6,000F; Fixed OH volume 9,000F. Calculate actual profit.
Select an option first.
Correct answer: A — 279,000
Explanation: A
Question 398
A company's total material variance is 12,000 adverse. The material price variance is 18,000 favourable. What is the material usage variance?
Select an option first.
Correct answer: A — 30,000 adverse
Explanation: A
Question 399
A company sets its standard costs at the start of each year. By month 9, actual commodity prices are 30% above the year-start standard. All materials variances are showing consistently adverse. The production director argues the variances are unfair because prices were set before the commodity surge. Evaluate and recommend.
Select an option first.
Correct answer: B — The director is correct that the price surge creates an unavoidable planning variance that is not a reflection of production management's efficiency. The solution is to separate: (a) planning variance = price difference between original and revised standard (uncontrollable — market movement); (b) operational variance = difference between revised standard and actual (controllable — purchasing efficiency). Evaluating production on total variance distorts the performance picture.
Explanation: B
Question 400
A company uses standard marginal costing. Budget: 8,000 units at contribution 25 each. Actual: 7,500 units sold at contribution 28 each. Fixed costs budget 80,000; actual 83,000. Reconcile budget profit to actual profit.
Select an option first.
Correct answer: A — Budget profit 120,000; actual profit 127,000; improvement 7,000
Explanation: A
More free ACCA topics
Management Accounting401
Financial Accounting400
Corporate and Business Law400
Financial Reporting400
Financial Management400
Strategic Business Reporting400
Advanced Financial Management400
Advanced Performance Management400
Advanced Taxation400
Business and Technology300
Taxation300
Audit and Assurance300
Strategic Business Leader300
Advanced Audit and Assurance296
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