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ICAN Performance Management 2024 past questions and answers

This 2024 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 2024 set with instant marking.

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Sample ICAN Performance Management 2024 questions

1. A manufacturer uses activity-based costing for two overhead pools. Setup overhead of N60,000 is driven by 30 setups, while inspection overhead of N40,000 is driven by 200 inspection hours. Product R used 8 setups and 50 inspection hours. How much overhead should be assigned to Product R?
  1. N26,000
  2. N12,000
  3. N30,000
  4. N36,000

Answer: A. N26,000

The setup rate is N2,000 per setup and the inspection rate is N200 per hour. Product R receives (8 x N2,000) + (50 x N200) = N26,000; using only one driver or a single volume-based rate would misallocate the pools.

2. A factory's material standard is 4 kg per finished unit at N5 per kg. During a period it produced 1,000 units, using 4,200 kg purchased at N5.20 per kg. Using the convention that a cost above standard is adverse, which pair gives the material price variance and material usage variance, respectively?
  1. N840 favourable; N1,000 adverse
  2. N840 adverse; N1,000 favourable
  3. N840 adverse; N1,000 adverse
  4. N1,000 adverse; N1,840 adverse

Answer: C. N840 adverse; N1,000 adverse

Price variance = 4,200 x (N5.20 - N5.00) = N840 adverse. Standard quantity for output is 4,000 kg, so usage variance = (4,200 - 4,000) x N5 = N1,000 adverse; option D incorrectly treats the total variance as the price variance.

3. A food processor is selecting one measure for the internal-process perspective of its balanced scorecard. Which measure most directly assesses that perspective?
  1. Revenue per employee
  2. Customer complaint rate
  3. Percentage of employees completing advanced training
  4. First-pass production yield

Answer: D. First-pass production yield

First-pass yield measures the effectiveness and quality of an operating process. Complaint rate is a customer-perspective measure, training is learning and growth, and revenue per employee is a financial/productivity measure.

4. Division A is operating at full capacity and can sell every unit externally for N75. Its variable cost is N44 per unit, and Division B asks to buy one unit internally. External demand would be displaced. What is A's minimum acceptable transfer price under the opportunity-cost rule?
  1. N44
  2. N75
  3. N31
  4. N119

Answer: B. N75

The minimum transfer price is variable cost plus opportunity cost. The lost external contribution is N75 - N44 = N31, so the minimum is N44 + N31 = N75; N44 ignores the displaced sale.

5. A job-costing firm budgets overhead of N480,000 for 60,000 machine hours and absorbs overhead using machine hours. Job 214 used 180 machine hours, N30,000 of direct materials and N20,000 of direct labour. What is the job's total cost using the predetermined overhead rate?
  1. N50,000
  2. N52,000
  3. N51,440
  4. N53,600

Answer: C. N51,440

The overhead rate is N480,000 / 60,000 = N8 per machine hour, so Job 214 receives N1,440 overhead. Total job cost is N30,000 + N20,000 + N1,440 = N51,440.

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