ACCA AS Performance Management 2

Question 1

Which of the following describes a 'controllable cost' in the context of responsibility accounting?

Accepted Answer

A cost that can be influenced by the manager of the responsibility centre being evaluated

Answer

A controllable cost is one that the manager of a responsibility centre can directly influence through their decisions. Performance evaluation should focus on controllable costs only.

Question 2

The 'learning curve' effect suggests that:

Accepted Answer

The cumulative average time per unit falls by a fixed percentage each time cumulative output doubles

Answer

The learning curve states that as cumulative production doubles, the cumulative average time (and cost) per unit falls by a fixed percentage, reflecting workers becoming more efficient.

Question 3

Which of the following is NOT a financial performance indicator?

Accepted Answer

Employee turnover rate

Answer

Employee turnover rate is a non-financial HR metric. Gross profit margin, ROCE and EPS are all financial measures derived from accounting data.

Question 4

Throughput accounting ratio (TAR) is calculated as:

Accepted Answer

Throughput per bottleneck hour ÷ Cost per factory hour

Answer

TAR = (Throughput per unit of bottleneck resource) ÷ (Total factory cost per unit of bottleneck resource). A TAR > 1 indicates the product is worth producing.

Question 5

In a divisional structure, 'goal congruence' means:

Accepted Answer

Divisional managers' decisions are aligned with the overall goals of the organisation

Answer

Goal congruence exists when divisional managers, acting in their own interests, also act in the best interest of the organisation as a whole.

ACCA Applied Skills Practice Test

ACCA Applied Skills Practice Test

ACCA AS Performance Management 2