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 budgeting approach requires managers to justify all expenditure from a zero base each period?
Answer: Zero-based budgeting
Zero-based budgeting (ZBB) starts from scratch each period — every cost must be justified afresh rather than simply adding a percentage to last year's budget.
A flexible budget is one that:
Answer: Is adjusted to reflect the actual level of activity achieved
A flexible budget is restated for the actual activity level achieved, allowing a fair comparison with actual costs and meaningful variance analysis.
Which of the following is a direct cost?
Answer: Raw materials used in a product
A direct cost can be directly traced to a specific cost unit. Raw materials used are directly attributable to a product, unlike overheads which are indirect.
The difference between budgeted profit and actual profit explained by volume sold is the:
Answer: Volume variance
The sales volume variance measures the impact on profit of selling more or fewer units than budgeted. It uses the standard profit margin per unit.
Contribution is calculated as:
Answer: Sales revenue − Variable costs
Contribution = Sales revenue − Variable costs. It represents the amount available to cover fixed costs and generate profit.
The break-even point in units is calculated as:
Answer: Fixed costs ÷ Contribution per unit
Break-even units = Fixed costs ÷ Contribution per unit. At this output level, total contribution exactly equals total fixed costs, so profit is zero.