Management Information Flashcards
6 cards from real ACA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Management Information flashcards as text
A standard cost is best described as:
Answer: The predetermined unit cost based on expected usage and prices
A standard cost is a carefully predetermined unit cost based on expected material quantities, labour times, and overhead rates under efficient operating conditions.
The adverse sales volume variance indicates:
Answer: Actual sales were below budgeted sales in volume terms
Sales volume variance = (actual volume − budgeted volume) × standard profit per unit. An adverse variance means fewer units were sold than budgeted, reducing profit.
In throughput accounting, the key constraint is managed using the ratio:
Answer: Throughput per unit / time on bottleneck resource
Throughput accounting ranks products by throughput (sales revenue minus direct materials) per unit of the bottleneck resource, maximising return from the constraint.
Life cycle costing considers:
Answer: All costs from design through production, sale, and after-sale support to disposal
Life cycle costing accumulates all costs associated with a product across its entire life — from development and launch through to decommissioning — to understand true profitability.
Which performance measure is used in a profit centre?
Answer: Profit (contribution and net profit)
A profit centre manager is responsible for both revenues and costs, and is therefore assessed on profit (or contribution) rather than just costs or return on assets.
Transfer pricing in management accounting refers to:
Answer: The internal price set for goods or services transferred between divisions
Transfer pricing is the mechanism by which one division of an organisation charges another division for goods or services supplied internally, affecting each division's reported performance.