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ICAN Management Accounting 2026 past questions and answers

This 2026 ICAN Management Accounting 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 ICAN Management Accounting 2026 questions

1. Within the relevant range, a factory pays fixed monthly rent. If output increases, what happens to the rent per unit and total rent?
  1. Rent per unit falls; total rent is unchanged
  2. Rent per unit is unchanged; total rent rises
  3. Both rent per unit and total rent rise
  4. Rent per unit rises; total rent is unchanged

Answer: A. Rent per unit falls; total rent is unchanged

Fixed rent remains constant in total within the relevant range, so spreading it over more units reduces the fixed cost per unit. A variable cost would rise in total with output, but rent is specified as fixed.

2. A maintenance contract charges a fixed monthly fee plus an additional amount for every machine-hour used. How should the total maintenance cost be classified?
  1. A stepped fixed cost
  2. A mixed cost
  3. A wholly variable cost
  4. A wholly fixed cost

Answer: B. A mixed cost

The contract combines a fixed monthly element with a machine-hour-related variable element, so it is a mixed cost. A wholly fixed or wholly variable classification would ignore one part of the stated charge.

3. A manufacturer uses one predetermined fixed production overhead absorption rate. Which calculation gives the rate?
  1. Actual overhead divided by actual activity
  2. Budgeted overhead divided by actual activity
  3. Budgeted production overhead divided by budgeted activity
  4. Actual overhead divided by budgeted activity

Answer: C. Budgeted production overhead divided by budgeted activity

A predetermined absorption rate is set before the period using budgeted production overhead and budgeted activity. Using actual figures would produce an actual rate rather than the predetermined rate.

4. A product sells for ₦2,400 per unit and has variable cost of ₦1,560 per unit. What is its contribution per unit?
  1. ₦1,560
  2. ₦840
  3. ₦2,400
  4. ₦3,960

Answer: B. ₦840

Contribution per unit is selling price less variable cost: ₦2,400 − ₦1,560 = ₦840. Variable cost is not the contribution, and adding price and cost does not measure contribution.

5. During a period, a company produces more units than it sells and has no opening inventory. Compared with marginal costing, what is the usual effect of absorption costing on reported profit?
  1. Absorption-costing profit is higher because some fixed production overhead is included in closing inventory
  2. Absorption-costing profit is lower because all fixed production overhead is expensed immediately
  3. The two profits are equal because fixed production overhead is excluded from inventory under both methods
  4. Absorption-costing profit is lower because variable production costs are deferred in inventory

Answer: A. Absorption-costing profit is higher because some fixed production overhead is included in closing inventory

When inventory increases, absorption costing carries a share of fixed production overhead forward in closing inventory, so less overhead is charged to the period. Marginal costing expenses all fixed production overhead for the period.

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