ACA Management Information 3

Question 1

Which of the following is an example of a non-financial performance indicator?

Accepted Answer

Customer satisfaction score

Answer

Non-financial indicators measure qualitative or operational aspects of performance, such as customer satisfaction, staff turnover, and on-time delivery, which are not directly captured by financial ratios.

Question 2

The balanced scorecard approach to performance measurement uses perspectives including:

Accepted Answer

Financial, customer, internal processes, and learning & growth

Answer

The Kaplan and Norton Balanced Scorecard uses four perspectives: Financial, Customer, Internal Business Processes, and Learning & Growth, to give a comprehensive view of organisational performance.

Question 3

Absorption costing can result in higher reported profits than marginal costing when:

Accepted Answer

Inventory levels increase during the period

Answer

When inventory levels rise, absorption costing defers fixed overhead in closing inventory, reducing the period charge and reporting higher profit compared to marginal costing.

Question 4

A direct cost is one that:

Accepted Answer

Can be specifically traced to a cost object

Answer

A direct cost is specifically and exclusively identifiable with a particular cost unit, cost centre, or cost object without the need for arbitrary apportionment.

Question 5

Limiting factor analysis determines the optimal production plan by ranking products on the basis of:

Accepted Answer

Highest contribution per unit of limiting factor

Answer

When a resource is scarce, products should be ranked by contribution earned per unit of the limiting factor (e.g., contribution per machine hour), to maximise total contribution.

ACA ICAEW Practice Test

ACA ICAEW Practice Test

ACA Management Information 3