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ACCA Performance Management (PM) 2022 past questions and answers

This 2022 ACCA Performance Management (PM) set has 20 practice questions. Try these 5 free sample questions, tap a question to reveal the answer and explanation. Then practise the whole 2022 set with instant marking.

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Sample ACCA Performance Management (PM) 2022 questions

1. A manufacturer uses activity-based costing for a production batch. Set-up costs of £72,000 are driven by 120 set-ups, and inspection costs of £48,000 are driven by 240 inspections. One batch of Product R requires 3 set-ups and 5 inspections. What overhead cost should be assigned to this batch?
  1. £2,400
  2. £2,800
  3. £3,200
  4. £4,000

Answer: B. £2,800

The set-up rate is £72,000/120 = £600 per set-up and the inspection rate is £48,000/240 = £200 per inspection. The batch receives (3 × £600) + (5 × £200) = £2,800; £2,400 omits one inspection's cost or misapplies a driver rate.

2. A factory has a single bottleneck machine. Product K sells for £80 per unit, uses direct materials costing £30 per unit and requires 10 bottleneck minutes. Under throughput accounting, what is Product K's throughput return per bottleneck minute?
  1. £3
  2. £4
  3. £5
  4. £8

Answer: C. £5

Throughput per unit is sales revenue less direct material cost: £80 − £30 = £50. Dividing by 10 bottleneck minutes gives £5 per minute; £8 wrongly divides sales revenue by the bottleneck time without deducting material.

3. A company needs 4,000 components. Making each component costs £11 in variable costs and £3 in avoidable fixed costs; allocated fixed costs of £4 per component will remain whatever the decision. A supplier offers the components for £16 each. Which decision minimizes relevant cost, and by how much?
  1. Make; save £8,000
  2. Buy; save £8,000
  3. Make; save £16,000
  4. Buy; save £12,000

Answer: A. Make; save £8,000

Relevant making cost is £11 + £3 = £14 per component, excluding unavoidable allocated fixed cost. Making costs £56,000 versus buying at £64,000, so making saves £8,000; the £4 allocation is not avoidable.

4. A workshop has 1,000 kg of a scarce material and sufficient demand and capacity for either product. Product X earns a contribution of £12 per unit and uses 3 kg; Product Y earns £15 per unit and uses 5 kg. Which production priority maximizes contribution from the scarce material?
  1. Product Y, because its contribution per unit is higher
  2. Produce equal quantities of X and Y
  3. Product X, because it earns £4 contribution per kg
  4. Product Y, because it earns £3 contribution per kg

Answer: C. Product X, because it earns £4 contribution per kg

X earns £12/3 = £4 contribution per kg, compared with Y's £15/5 = £3 per kg. With no other constraint and sufficient demand, prioritize X; comparing contribution per unit alone would select the wrong product.

5. For a new product, the cumulative average labour time is 10 hours per unit for the first 100 units. A learning curve of 80% applies whenever cumulative output doubles. How many labour hours are expected for units 101–200?
  1. 400 hours
  2. 600 hours
  3. 800 hours
  4. 1,600 hours

Answer: B. 600 hours

At 200 cumulative units, the cumulative average falls to 80% × 10 = 8 hours per unit, giving 1,600 total hours. The first 100 units used 1,000 hours, so units 101–200 use 1,600 − 1,000 = 600 hours.

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