Management Accounting Flashcards
6 cards from real ACCA AK 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 Accounting flashcards as text
Which of the following describes 'throughput accounting'?
Answer: Profit is maximised by maximising throughput (sales − direct material costs) relative to the bottleneck resource
Throughput accounting (Goldratt's Theory of Constraints) focuses on maximising throughput contribution (sales minus direct material) per unit of the binding constraint (bottleneck).
A 'rolling budget' is one that:
Answer: Is continuously updated by adding a new period as the most recent period passes
A rolling (or continuous) budget is updated regularly — typically monthly or quarterly — so there is always a budget for the same number of periods ahead.
Which of the following is a feature of standard costing?
Answer: Predetermined costs are set and variances between standard and actual are calculated
Standard costing sets predetermined (standard) costs for inputs and outputs. Actual costs are compared to standards, and variances are calculated to support control.
Which cost behaviour pattern describes a cost that remains fixed up to a certain activity level and then increases in steps?
Answer: Stepped fixed cost
A stepped fixed cost is fixed within a range of activity but increases by a fixed amount when activity exceeds a threshold (e.g., hiring an additional supervisor).
Which of the following is a limitation of zero-based budgeting?
Answer: It is very time-consuming and resource-intensive to implement
ZBB requires every activity to be justified from scratch each period, which is extremely time-consuming and costly, making it impractical to apply to all areas annually.
If fixed costs are £120,000 and contribution per unit is £4, the break-even point is:
Answer: 30,000 units
Break-even units = Fixed costs ÷ Contribution per unit = £120,000 ÷ £4 = 30,000 units.