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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.

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Question 181

Price elasticity of demand is INELASTIC when:

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Question 182

Which of the following costs should be included in a relevant cost analysis for a special order when the business is operating at full capacity?

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Question 183

Marginal pricing (setting price just above variable cost) is appropriate when:

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Question 184

What is a discriminating monopoly (price discrimination)?

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Question 185

The shutdown of a product line is financially justified when:

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Question 186

When evaluating a decision to make or buy, which of the following is ALWAYS irrelevant?

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Question 187

What is a limiting factor in decision-making?

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Question 188

What is the difference between a variable cost and a marginal cost?

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Question 189

Which of the following is a qualitative factor to consider in a make-or-buy decision (beyond the financial calculation)?

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Question 190

What is the difference between a relevant cost and an avoidable cost?

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Question 191

When the selling division has NO spare capacity and there IS an external market for the transferred goods, the minimum transfer price is:

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Question 192

What is meant by 'full cost-plus pricing' and what is its main limitation?

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Question 193

In the context of transfer pricing, what is the maximum transfer price a buying division would accept?

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Question 194

Demand: P = 180 - 3Q. Find the MR function.

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Question 195

Using P = 180 - 3Q and MR = 180 - 6Q, with MC = 30, find profit-maximising output and price.

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Question 196

Make-or-buy: making costs 22 variable per unit, fixed overhead 8 (all unavoidable). External price 25. Spare capacity available. Decision?

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Question 197

Same as above but no spare capacity — making the component displaces production of another item with contribution of 18 per unit using the same resources. What is the minimum acceptable transfer price?

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Question 198

A joint process costs 120,000 and produces A and B. A: sales value 80,000, further costs 20,000, NRV 60,000. B: sales value 100,000, further costs 15,000, NRV 85,000. Allocate joint costs using NRV method.

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Question 199

Should Product A be processed further? At split-off NRV = 40,000. Further processing cost = 12,000. Revenue after further processing = 58,000.

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Question 200

A company produces a by-product worth 5,000 at split-off from a joint process costing 100,000. Using the net cost approach, the joint cost charged to the main product is:

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Question 201

A company charges 120 per unit, variable cost 45, fixed costs 200,000. It is considering reducing price to 100 to increase volume. Currently sales are 5,000 units; at 100 per unit projected sales are 7,000. Should it reduce price?

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Question 202

A company has: demand function P = 300 - 5Q; MC = 50. Find profit-maximising Q and P.

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Question 203

A company is considering a special order for 2,000 units at 38/unit. Normal selling price 55; variable cost 30; fixed overhead per unit 12 (unavoidable). The factory has idle capacity of 3,000 units. Accept or reject?

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Question 204

A division produces a component (variable cost 40, allocated fixed cost 20 = full cost 60). The external market price for the component is 70. The buying division needs 5,000 units. Current capacity: 80% utilised (production capacity 10,000 units, currently making 8,000 for external sale). Transfer price range?

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Question 205

A company has joint costs of 200,000. Product M: units 4,000, selling price 40, further costs 8/unit. Product N: units 6,000, selling price 30, further costs 5/unit. Allocate joint costs using net realisable value method.

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Question 206

A company has demand: at price 100, demand = 8,000 units; at price 90, demand = 10,000 units. Calculate price elasticity of demand.

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Question 207

A company receives a special order for 3,000 units at 28 each. Normal price: 45. Variable cost: 22. The company has spare capacity of 2,000 units. Making the additional 1,000 units requires overtime at additional cost of 4 per unit. What is the minimum price the company should charge for the order?

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Question 208

A department reports a loss of 40,000. Fixed costs allocated to it total 55,000, of which 35,000 is avoidable. The department's contribution is 20,000. Should it close?

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Question 209

A business decides to launch a premium version of its product at a higher price while maintaining the standard version. This is known as:

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Question 210

Transfer pricing — negotiated price: Division A (seller) has VC=45, capacity constraint at 10,000 units, currently selling 9,000 externally at 80. Division B needs 2,000 units. What range of transfer prices is acceptable?

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Free ACCA Performance Management Practice Questions & Answers

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