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ICAN Performance Management 2023 past questions and answers

This 2023 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 2023 set with instant marking.

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Sample ICAN Performance Management 2023 questions

1. A manufacturer uses activity-based costing. Set-up overhead of N72,000 is driven by 24 set-ups, while engineering overhead of N108,000 is driven by 360 engineering hours. Product K uses 6 set-ups and 80 engineering hours. How much of these overheads should be assigned to Product K?
  1. N18,000
  2. N24,000
  3. N42,000
  4. N48,000

Answer: C. N42,000

The set-up rate is N72,000/24 = N3,000, assigning N18,000 to K; the engineering rate is N108,000/360 = N300, assigning N24,000. Total assigned overhead is N42,000.

2. A process has no opening work in progress. During the month, 800 units were completed and 200 units remained in closing work in progress, 50% complete for conversion. Materials are added at the start of the process. Under the weighted-average method, conversion costs were N45,000. What is the conversion cost per equivalent unit?
  1. N45
  2. N50
  3. N56.25
  4. N60

Answer: B. N50

Conversion equivalent units are 800 completed + (200 × 50%) = 900. N45,000/900 = N50 per equivalent unit; using all 1,000 physical units would incorrectly ignore the incomplete conversion work.

3. A service centre budgets fixed costs of N120,000 per month plus variable costs of N8 per service unit. Its flexible budget is being prepared for actual activity of 15,000 units. What total cost should appear in the flexible budget?
  1. N120,000
  2. N180,000
  3. N240,000
  4. N300,000

Answer: C. N240,000

Variable costs at actual activity are 15,000 × N8 = N120,000. Adding fixed costs of N120,000 gives a flexible budget total of N240,000.

4. A retailer uses a three-month simple moving average to forecast demand for April. Recorded demand was 120 units in January, 150 in February and 180 in March. What is the April forecast?
  1. 140 units
  2. 150 units
  3. 160 units
  4. 180 units

Answer: B. 150 units

The three-month moving average is (120 + 150 + 180)/3 = 150 units. The April forecast uses these three completed months, not a weighted or trend-adjusted average.

5. A factory bought and used 2,100 kg of material at N4.20 per kg. The standard price is N4.00 per kg. What is the material price variance?
  1. N420 adverse
  2. N420 favourable
  3. N400 adverse
  4. N400 favourable

Answer: A. N420 adverse

Material price variance = actual quantity × (standard price − actual price) = 2,100 × (N4.00 − N4.20) = N420 adverse. The actual price exceeded standard by N0.20 per kg.

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