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ICAN Performance Management 2022 past questions and answers

This 2022 ICAN Performance Management 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 ICAN Performance Management 2022 questions

1. A furniture maker uses activity-based costing. Its setup pool of ₦120,000 is driven by 20 setups and its inspection pool of ₦60,000 by 300 inspections. Product Z, made in a batch of 1,000 units, uses 4 setups and 30 inspections. What overhead cost per unit is assigned to Product Z?
  1. ₦12
  2. ₦24
  3. ₦30
  4. ₦60

Answer: C. ₦30

The setup rate is ₦120,000 ÷ 20 = ₦6,000 per setup and the inspection rate is ₦60,000 ÷ 300 = ₦200 per inspection. Product Z receives 4(₦6,000) + 30(₦200) = ₦30,000, or ₦30 per unit; ₦60 incorrectly treats the batch's assigned cost as a per-unit cost.

2. A process receives 1,000 units in a month. All direct materials are added at the start. At month-end, 800 units are complete and 200 are 50% complete for conversion. Under the weighted-average method, material costs are ₦10,000 and conversion costs are ₦9,000. What is the cost of a completed unit?
  1. ₦20
  2. ₦19
  3. ₦18
  4. ₦21

Answer: A. ₦20

Material equivalent units are 1,000 and conversion equivalent units are 800 + (200 × 50%) = 900. The rates are ₦10 and ₦10 per equivalent unit, so a completed unit costs ₦20; ₦19 results from using physical units rather than conversion equivalent units.

3. A food producer's annual budget is prepared by adding a new month as each month ends, so that management always has a 12-month plan. What type of budget is this?
  1. A fixed budget
  2. A zero-based budget
  3. A capital budget
  4. A rolling budget

Answer: D. A rolling budget

A rolling budget is continuously extended by adding a new period as the current period expires. A fixed budget is not continuously rolled forward.

4. A distributor finds that weekly sales move closely with local advertising expenditure. It wants to estimate sales for a proposed advertising spend while holding other influences constant. Which forecasting approach most directly models this relationship?
  1. A rolling budget
  2. Regression analysis
  3. A learning curve
  4. A cash budget

Answer: B. Regression analysis

Regression analysis estimates the relationship between a dependent variable such as sales and an explanatory variable such as advertising spend. A rolling budget updates the planning period but does not itself estimate this relationship.

5. A manufacturer buys 400 kg of material at ₦9 per kg. The standard price is ₦8 per kg. Using the price variance on quantity purchased, what is the material price variance?
  1. ₦400 favourable
  2. ₦3,200 adverse
  3. ₦400 adverse
  4. ₦3,600 favourable

Answer: C. ₦400 adverse

Price variance = actual quantity purchased × (standard price − actual price) = 400 × (₦8 − ₦9) = ₦400 adverse. The adverse label follows because the actual price exceeds standard.

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