ACA Management Information

Question 1

Which costing system assigns costs to products based on the activities that drive those costs?

Accepted Answer

Activity-based costing (ABC)

Answer

Absorption costing

Answer

Marginal costing

Answer

Standard costing

Question 2

Marginal costing values closing inventory at:

Accepted Answer

Variable cost per unit only

Answer

Full absorption cost per unit

Answer

Selling price less profit margin

Answer

Standard cost per unit

Question 3

A favourable direct material usage variance means:

Accepted Answer

Less material was used than the standard amount for actual output

Answer

The material cost per unit was lower than standard

Answer

More material was used than standard

Answer

The sales volume exceeded budget

Question 4

In breakeven analysis, the contribution to sales (C/S) ratio represents:

Accepted Answer

The percentage of each pound of sales available to cover fixed costs and profit

Answer

The percentage of sales revenue that covers variable costs

Answer

The ratio of fixed costs to variable costs

Answer

The profit margin percentage

Question 5

Which budgeting approach starts from a zero base each period, requiring all expenditure to be justified?

Accepted Answer

Zero-based budgeting (ZBB)

Answer

Incremental budgeting

Answer

Rolling budgeting

Answer

Activity-based budgeting

Question 6

The purpose of a flexible budget is to:

Accepted Answer

Compare actual costs with budgeted costs at the actual level of activity

Answer

Set aspirational targets for managers

Answer

Limit total spending for the year

Answer

Plan capital expenditure decisions