ACCA Advanced Performance Management 3

Question 1

Which costing technique assigns overhead costs to products based on the activities that consume those resources?

Accepted Answer

Activity-based costing

Answer

Activity-based costing (ABC) traces overhead to cost objects via activities and cost drivers, providing more accurate product costs than traditional absorption costing.

Question 2

In a Tier 1 risk assessment under COSO ERM, which category of risk relates to the reliability of financial reporting?

Accepted Answer

Reporting risk

Answer

COSO ERM's reporting objective category addresses risks affecting the accuracy, completeness, and reliability of internal and external financial reporting.

Question 3

A company's throughput accounting ratio (TAR) for a product is 0.75. What does this indicate?

Accepted Answer

The product's throughput contribution does not cover its total factory cost

Answer

A TAR below 1.0 means the product's throughput (sales minus totally variable costs) is less than the total factory cost, suggesting the product is not worth making at current pricing or volume.

Question 4

Which strategic analysis framework evaluates a company's position using the dimensions of competitive advantage and competitive scope?

Accepted Answer

Porter's Generic Strategies

Answer

Porter's Generic Strategies (cost leadership, differentiation, and focus) are defined along the axes of competitive advantage (cost or differentiation) and competitive scope (broad or narrow).

Question 5

Under the ACCA APM syllabus, which reward system characteristic is described as 'line of sight'?

Accepted Answer

Employees' ability to understand how their actions affect the reward metric

Answer

Line of sight refers to whether employees can clearly see and understand the connection between their individual actions and the performance measures that drive their reward.

ACCA - Association of Chartered Certified Accountants Practice Test

ACCA - Association of Chartered Certified Accountants Practice Test

ACCA Advanced Performance Management 3