PassSparkACCA Performance Management (PM) 2026 past questions and answers
This 2026 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 2026 set with instant marking.
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Sample ACCA Performance Management (PM) 2026 questions
1. A manufacturer produces three product lines and incurs substantial costs for setting up production runs. The finance manager is redesigning the overhead system using activity-based costing. Which cost driver is most appropriate for the production setup cost pool?
- Units produced
- Number of production setups
- Direct labour hours
- Sales revenue
Answer: B. Number of production setups
The number of setups causes setup activity and is therefore the appropriate driver for that cost pool. Units produced or labour hours may be suitable for other pools but may not reflect the number of setups required.
2. A factory's bottleneck machine is fully utilised. Product A sells for £80, uses direct materials costing £32 and requires four bottleneck minutes. Product B sells for £70, uses direct materials costing £28 and requires three bottleneck minutes. For throughput accounting, which product should be prioritised?
- Product A, because its selling price is higher
- Product A, because its throughput per unit is higher
- Either product, because both have the same throughput per unit
- Product B, because its throughput per bottleneck minute is higher
Answer: D. Product B, because its throughput per bottleneck minute is higher
Throughput per bottleneck minute is (£80 − £32) ÷ 4 = £12 for A and (£70 − £28) ÷ 3 = £14 for B, so B earns more per scarce minute. The higher selling price of A does not account for the bottleneck time it consumes.
3. A company plans to launch a device at a competitive selling price of £250. Management requires a target profit equal to 20% of the selling price. What is the target cost per device?
- £200
- £210
- £230
- £300
Answer: A. £200
The target profit is 20% × £250 = £50, so the target cost is £250 − £50 = £200. The £210 distractor would result from applying a 20% reduction to a different base.
4. A workshop has a shortage of machine hours. Product Red earns a contribution of £36 per unit and uses three machine hours. Product Blue earns £50 per unit and uses five machine hours. Assuming demand is available for both products, which should be prioritised to maximise contribution?
- Product Blue, because it has the higher contribution per unit
- Either product, because both use machine time
- Product Red, because it earns £12 contribution per machine hour
- Product Blue, because it earns £10 contribution per machine hour
Answer: C. Product Red, because it earns £12 contribution per machine hour
Red earns £36 ÷ 3 = £12 per scarce machine hour, whereas Blue earns £50 ÷ 5 = £10. Product Blue's higher contribution per unit is not the correct basis when machine hours are limiting.
5. A one-off order requires material that is already in inventory. The material originally cost £9 per kg and has no use other than this order or sale as surplus for £6 per kg. There is enough stock for the order. What is the relevant material cost per kg for the order?
- £0, because the material is already in inventory
- £6, being the sale proceeds forgone
- £9, being the original purchase cost
- The current replacement cost, regardless of alternative use
Answer: B. £6, being the sale proceeds forgone
Using the material means giving up the £6 per kg sale proceeds, which is its relevant opportunity cost. The original £9 purchase cost is sunk and does not change with the decision.
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