ACCA Advanced Performance Management 2 — Questions and Answers
Question 1: Which element of the Balanced Scorecard captures metrics such as employee training hours and innovation rates?
- Financial perspective
- Customer perspective
- Internal business process perspective
- Learning and growth perspective (Correct answer)
Correct answer: Learning and growth perspective
The learning and growth perspective focuses on organizational capacity, including employee skills, knowledge systems, and innovation.
Question 2: A company uses a transfer price equal to marginal cost plus a fixed fee. Which transfer pricing method does this represent?
- Market-based transfer pricing
- Cost-plus transfer pricing
- Two-part tariff (Correct answer)
- Negotiated transfer pricing
Correct answer: Two-part tariff
A two-part tariff charges the buying division marginal cost per unit plus a fixed fee to allow the selling division to recover fixed costs and earn a profit.
Question 3: In Beyond Budgeting, which of the following BEST describes the role of targets?
- Fixed annual targets set top-down by senior management
- Relative targets benchmarked against external competitors or peers (Correct answer)
- Zero-based targets reset monthly
- Incremental targets based on prior-year actuals
Correct answer: Relative targets benchmarked against external competitors or peers
Beyond Budgeting replaces fixed internal targets with relative benchmarks against peers or competitors to promote adaptive, dynamic performance.
Question 4: Porter's Value Chain divides firm activities into primary and support activities. Which of the following is a PRIMARY activity?
- Human resource management
- Technology development
- Outbound logistics (Correct answer)
- Procurement
Correct answer: Outbound logistics
Outbound logistics — activities related to collecting, storing, and distributing outputs — is one of the five primary activities in Porter's Value Chain.
Question 5: Which performance measure calculates the percentage of a company's total available capacity that is actively used in production?
- Efficiency ratio
- Capacity utilization rate (Correct answer)
- Throughput accounting ratio
- Return on capital employed
Correct answer: Capacity utilization rate
Capacity utilization rate measures actual output as a proportion of maximum potential output, indicating how effectively capacity is deployed.
Question 6: Under Fitzgerald and Moon's Building Block model, which block directly links performance measures to the underlying drivers of results?
- Standards
- Rewards
- Dimensions
- Determinants (Correct answer)
Correct answer: Determinants
Determinants (quality, flexibility, resource utilization, and innovation) are the drivers that cause the results (competitiveness and financial performance) measured in the dimensions block.
Question 7: A firm's supply chain strategy emphasizes responsiveness over efficiency. Which of the following product characteristics MOST justifies this approach?
- Stable, predictable demand with long product life cycles
- High demand uncertainty and short product life cycles (Correct answer)
- Commodity products with many substitute suppliers
- Low-margin products sold in high volumes
Correct answer: High demand uncertainty and short product life cycles
High demand uncertainty and short life cycles require a responsive supply chain that can quickly adapt, even at higher cost, to avoid stockouts or obsolescence.
ACCA Advanced Performance Management 2
Which element of the Balanced Scorecard captures metrics such as employee training hours and innovation rates?