ACCA — Chartered Certified Accountants

📈 Performance Management (PM)
MCQ Practice

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All topics in Performance Management (PM)

Every topic in the knowledge graph — mapped from the official syllabus and textbook.

Management Information Systems
Uses and Control of Information
Big Data and Data Analytics
Activity-Based Costing
Target Costing
Life-Cycle Costing
Throughput Accounting
Environmental and Sustainability Accounting
Relevant Cost Analysis
Cost Volume Profit Analysis
Limiting Factor Analysis
Pricing Decisions
Make-or-Buy and Short-Term Decisions
Risk and Uncertainty in Decision-Making
Budgetary Systems and Types of Budget
Analytical Techniques in Budgeting
Standard Costing
Material Mix and Yield Variances
Sales Mix and Quantity Variances
Planning and Operational Variances
Variance Interpretation and Behavioural Aspects
Financial Performance Indicators
Non-Financial Performance Indicators
Balanced Scorecard
Fitzgerald and Moon Building Block Model
Divisional Performance: ROI and RI
Transfer Pricing
Short-Termism and Financial Manipulation
NFP and Public Sector Performance Management
Sustainability and External Performance Considerations
Flexible Budget Preparation
Shadow Prices and Slack
Learning Curve Applications
Linear Programming Graphical Method
Behavioural Aspects of Budgeting
Expected Value and Decision Trees
Sensitivity Analysis
Performance Analysis: Private Sector
Zero-Based Budgeting
Rolling Budgets and Activity-Based Budgets
Performance Hierarchy Levels
Pricing Strategy Selection
Material and Labour Variance Calculations
Return on Investment: Asset Base Issues
International Transfer Pricing
Working Capital Management in Performance
Cost Classification and Cost Behaviour
Transfer Price Negotiation
Types of Information in Performance Management
Overhead Absorption vs Marginal Costing
Exam Technique and Digital Skills in PM
Balanced Scorecard vs Building Block Model
CVP in Multi-Product Situations
Quantitative Budgeting Techniques Summary
Sustainability in Budgeting and Performance

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Cost Classification and Cost Behaviour

Question 1

Which statement correctly reflects a common misconception about fixed costs?

10:05 ✓✓

A Fixed costs are always avoidable in the short term.

B Fixed costs remain constant at all levels of activity without exception.

C Fixed costs vary per unit as output changes, but total fixed costs are constant within the relevant range. ✓

D Fixed costs include direct materials and variable overheads.

10:05 ✓✓

✅ Correct!
Fixed costs are constant in total within the relevant range but vary per unit. Option B is the misconception—fixed costs are not constant at all levels, only within a relevant range.

10:05 ✓✓

Working Capital Management in Performance

Question 2

An auditor observes that a company has rapidly increased sales while maintaining low current ratios, declining inventory turnover, and increasing trade payables. What does this pattern most likely indicate?

10:05 ✓✓

A Effective working capital management due to improved efficiency in receivables collection.

B Overtrading, where growth is not supported by adequate liquidity or capital. ✓

C Successful negotiation of extended credit terms with suppliers, improving cash flow.

D High profitability and strong cash generation from operations.

10:05 ✓✓

✅ Correct!
Rapid growth with low liquidity, falling turnover, and rising payables are classic signs of overtrading. Option D is incorrect because high profitability does not explain poor liquidity or declining efficiency ratios.

10:05 ✓✓

Budgetary Systems and Types of Budget

Question 3

Which of the following best describes the primary purpose of a budget?

10:05 ✓✓

A To ensure all departments spend exactly the same amount as last year.

B To provide a financial framework for planning, control, and coordination. ✓

C To eliminate the need for management decision-making during the year.

D To guarantee that actual results will match forecasted figures.

10:05 ✓✓

✅ Correct!
Budgets serve planning, control, coordination, motivation, and authorization (PMCCA). Option A describes incremental budgeting, not purpose. Option C is false — budgets support, not replace, decisions. Option D is unrealistic — budgets are estimates. So B is correct.

10:05 ✓✓

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📈 Performance Management (PM)
MCQ Practice

Top 10 exam topics

All topics in Performance Management (PM)

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📈 Performance Management (PM)MCQ Practice

Top 10 exam topics

All topics in Performance Management (PM)

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Simple, transparent pricing

Explore other ACCA papers

Ready to master Performance Management (PM)?

📈 Performance Management (PM)
MCQ Practice