ACCA Applied Skills Practice Questions — All Questions
AllFinancial AccountingManagement AccountingFinancial Reporting (IFRS)Audit & AssuranceFinancial Management
4 questions
Management Accounting
Under marginal costing, which cost is treated as a period cost?
- a.Direct materials
- b.Fixed production overhead✓
- c.Direct labor
- d.Variable overhead
Marginal costing writes off fixed production overhead as a period cost.
Management Accounting
Contribution is calculated as sales less:
- a.Variable costs✓
- b.All costs
- c.Fixed costs
- d.Tax
Contribution = sales - variable costs.
Management Accounting
A cost that has already been incurred and is irrelevant to a decision is a:
- a.Variable cost
- b.Opportunity cost
- c.Sunk cost✓
- d.Marginal cost
Sunk costs are past and irrelevant to future decisions.
Management Accounting
The value of the next-best alternative forgone is the:
- a.Fixed cost
- b.Sunk cost
- c.Standard cost
- d.Opportunity cost✓
Opportunity cost is the benefit given up by choosing one option over another.