F5 (PM) – PART B – CBE MCQs – ACCA

These are ACCA F5 (PM) Performance Management MCQs for Part-B of the Syllabus “Specialist cost and management accounting techniques”.

These multiple-choice questions (MCQs) are designed to help ACCA F5 students to better understand the exam format. We aim to instill in students the habit of practicing online for their CBE exams. By doing so, students can reduce exam stress and prepare more effectively.

Please note:

  • Students should not attempt these MCQs until they have studied the entire chapter.
  • All questions are compulsory, so please do not skip any.

We hope that these MCQs will be a valuable resource for students preparing for the ACCA F5 (PM) exam.

INFORMATION ABOUT THESE CBE MCQs Test/Quiz

Course:ACCA – Association of Chartered Certified Accountants
Fundamental Level:Applied Skills
Subject:Performance Management
Paper:F5 – PM
Chapters and Topics Covered:
  • Activity-based costing,
  • Target costing,
  • Life-cycle costing,
  • Throughput accounting,
  • Accounting for environmental and sustainability factors
Syllabus Area:B – “Specialist cost and management accounting techniques”
Questions Type:CBE MCQs
Exam Section:Section A

Syllabus Area

These Multiple Choice Questions (MCQs) cover the Syllabus Area Part B of the Syllabus; “Specialist cost and management accounting techniques” of ACCA F5 (PM) Performance Management Module.

Time

These MCQs are not time-bound. Take your time and solve them stress freely. Pay proper attention and focus. Do not rush or hesitate.

Result

Students will get their F5 CBE MCQs Test results after they finish the entire test. They will also be able to see the correct and incorrect answers, as well as explanations for the incorrect questions.

Types of Questions

MCQs: Choose one from the given options.
Multiple choice: Choose all those answers which seem correct/ or incorrect to you, as per the requirement of the question. Keep your eye on the wording “(select all those which are correct/ or incorrect)“.
Drop-down: Select from the list provided.
Type numbers: Type your answer in numbers as per the requirement of the question.

 

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F5 (PM) - Part B - MCQs - Specialist cost and management accounting techniques

Course: ACCA - Association of Chartered Certified Accountants
Subject:
F5 (PM) - Performance Management
Syllabus Area: B - Specialist cost and management accounting techniques
Chapters covered: Activity-based costing, Target costing, Life-cycle costing, Throughput accounting, Accounting for environmental and sustainability factors
Exam Section: Section A
Questions type: MCQs
Time: No Time Limit

INSTRUCTIONS

  1. If you are using mobile, turn on the mobile rotation and solve the MCQs on wide screen for better experience.

REQUEST

  1. Please rate the quiz and give us feedback once you completed the quiz.
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1 / 30

Product YZ2 is made in a production process where machine time is a bottleneck resource. Production of one unit of Product YZ2 takes 0.25 machine hours.

The costs and selling price of Product YZ2 are as follows:

$
Materials 10
Labour (0.5 hours)   7
Other factory costs   7
24
Sales price 30
Profit   6

In a system of throughput accounting, what is the return per factory hour (to two decimal places)?

2 / 30

In material flow cost accounting (MFCA), which of the following is NOT a category used?

3 / 30

Which TWO of the following statements about life cycle costing are true?

4 / 30

The following information relates to the expected cost of a new product over its expected three-year life.

Year 0 Year 1 Year 2 Year 3
Units made and sold 25,000 100,000 75,000
R&D costs $850,000 $90,000
Production costs
  Variable per unit $30 $25 $20
  Fixed costs $500,000 $500,000 $500,000
Selling and distribution costs
  Variable per unit $6 $5 $4
  Fixed costs $700,000 $500,000 $300,000
Customer service costs
  Variable per unit $4 $3 $2

What is the expected average life cycle cost per unit?

5 / 30

The following data refers to a soft drinks manufacturing company that passes its product through four processes and is currently operating at optimal capacity.

Process Washing Filling Capping Labelling
Time per dozen units 6 mins 3 mins 1.5 mins 2 mins
Machine hours available 1,200 700 250 450

 

Product data $ per unit
Selling price 0.60
Direct material 0.18
Direct labour 0.02
Factory fixed cost $4,120

Which process is the bottleneck?

6 / 30

Which of the following statements about environmental management accounting is/are True?

  1. A system of environmental management accounting provides environmental information for internal use by management, but not for external reporting.
  2. Environmental management accounting systems typically make use of life cycle costing.

7 / 30

The following costs have arisen in relation to the production of a product:

  1. Planning and concept design costs
  2. Testing costs
  3. Production costs
  4. Distribution and customer service costs

In calculating the life cycle costs of a product, which of the above items would be included?

8 / 30

The following statements have been made about traditional absorption costing and activity based costing (ABC).

  1. Traditional absorption costing may be used to set prices for products, but activity based costing cannot.
  2. Traditional absorption costing tends to allocate too many overhead costs to low-volume products and not enough overheads to high-volume products.
  3. Implementing ABC is expensive and time consuming

Which of the above statements is/are true?

9 / 30

The following estimates have been produced for a new product with an expected life of four years.

Year 1 Year 2 Year 3 Year 4
Units made and sold 5,000 10,000 25,000 10,000
$ $ $ $
R&D costs 0.9 million 0.3 million
Marketing costs 0.3 million 0.3 million 0.1 million 0.1 million
Production cost per unit 80 40 30 30
Customer service cost per unit 20 15 10 5
Disposal costs 0.2 million

What is the expected life cycle cost per unit (to two decimal places)?

10 / 30

Which of the following statements about target costing is/are False?

  1. A risk with target costing is that cost reductions may affect the perceived value of the product.
  2. An effective way of reducing the projected cost of a new product is to simplify the design.
  3. The value of target costing depends on having reliable estimates of sales demand.
  4. Target costing may be applied to services that are provided free of charge to customers, such as costs of call centre handling.

11 / 30

Which of the following statements about material flow cost accounting (MFCA) is/are True?

  1. In material flow cost accounting, waste is treated as a negative product and given a cost.
  2. Material flow cost accounting should encourage management to focus on ways of achieving the same amount of finished output with less material input.

12 / 30

ABC is felt to give a more useful product cost than classic absorption costing (with overheads absorbed on labour hours) if which of the following TWO apply?

13 / 30

In which of the following ways might financial returns be improved over the life cycle of a product?

  1. Maximising the breakeven time
  2. Minimising the time to market
  3. Minimising the length of the life cycle

14 / 30

The following statements have been made about throughput accounting.

  1. Direct labour should always be treated as a factory cost when measuring throughput.
  2. If machine time is the bottleneck resource, there is no value in taking measures to improve direct labour efficiency.

Which of the above statements is/are true?

15 / 30

Which of the following statements about activity based costing is true?

16 / 30

Which of the following statements about target costing is NOT true?

17 / 30

Which TWO of the following statements about activity based costing (ABC) are True?

18 / 30

One of the products manufactured by a company is Product X, which sells for $40 per unit and has a material cost of $10 per unit and a direct labour cost of $7 per unit. The total direct labour budget for the year is 50,000 hours of labour time at a cost of $12 per hour.
Factory overheads are $2,920,000 per year.

The company is considering the introduction of a system of throughput accounting. It has identified that machine time is the bottleneck in production. Product X needs 0.01 hours of machine time per unit produced. The maximum capacity for machine time is 4,000 hours per year.

What is the throughput accounting ratio for Product X (to two decimal places)?

19 / 30

Budget information relating to a company that manufactures four products is as follows.

Product Maximum
sales demand
Machine
hours per unit
Machine
machine hours
required
Sales price
per unit
Material cost
per unit
Units $ $
A 1,000 0.1 100 15 6
B 500 0.2 100 21 10
C 2,000 0.3 600 18 9
D 1,000 0.2 200 25 16
1,000

Only 750 machine hours are available during the period. Applying the principles of throughput accounting, how many units of Product B should be made if the company produces output to maximise throughput and profit?

20 / 30

Which TWO of the following statements about activity based costing (ABC) are true?

21 / 30

The selling price of Product X is set at $550 for each unit and sales for the coming year are expected to be 800 units.

A return of 30% on the investment of $500,000 in Product X will be required in the coming year.

What is the target cost for each unit of Product X (to two decimal places)?

22 / 30

A company has a target mark-up of 25% and sells into a competitive market where the market price is $120 per unit. The company's current costs per unit are $46 for variable costs and $60 for fixed costs, and it has a budgeted output of 10,000 units.

What is the minimum production required to close the target cost gap?

23 / 30

In environmental costing, the future cost of cleaning up operations for a product or activity may be classified as which of the following?

24 / 30

Which of the following statements about environmental cost accounting is/are FALSE?

  1. The majority of environmental costs are already captured within a typical organisation's accounting system. The difficulty lies in identifying them.
  2. Input/output analysis divides material flows within an organisation into three categories: material flows; system flows; and delivery and disposal flows.

25 / 30

Which of the following should be categorised as environmental failure costs by an airline company?

  1. Compensation payments to residents living close to airports for noise pollution caused by their aircraft
  2. Air pollution due to the airline's carbon emissions from their aircraft engines
  3. Penalties paid by the airline to the government for breaching environmental regulations

26 / 30

In the theory of constraints and throughput accounting, which of the following methods may be used to elevate the performance of a binding constraint?

Method 1: Acquire more of the resource that is the binding constraint

Method 2: Improve the efficiency of usage of the resource that is the binding constraint

27 / 30

Which TWO of the following costs are likely to rise when just-in-time (JIT) manufacturing is introduced?

28 / 30

The following statements have been made about throughput accounting.

  1. Inventory has no value and should be valued at $0.
  2. Efficiency is maximised by utilising direct labour time and machine time to full capacity.

Which of the above statements is/are true?

29 / 30

A company manufactures Product Q, which sells for $50 per unit and has a material cost of $14 per unit and a direct labour cost of $10 per unit. The total direct labour budget for the year is 18,000 hours of labour time at a cost of $10 per hour. Factory overheads are $1,620,000 per year. The company has identified machine time as the bottleneck in production. Product Q needs 0.05 hours of machine time per unit produced. The maximum capacity for machine time is 6,000 hours per year.

What is the throughput accounting ratio for Product Q (to one decimal place)?

30 / 30

Which TWO of the following statements about throughput accounting and the theory of constraints are true?

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