ACCA Performance management PM (F5) Mock Exam [updated] 2021

Performance management PM, previously F5 is one of the toughest ACCA examinations. Here is a practice mock for paper PM F5 that comprise of MCQs and MTQs. The ACCA PM (F5) mock is updated as per the new F5 (PM) syllabus.

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#1. What is a Budgetary Slack?

Budgetary slack helps management plan a zero-based budget

A built-in obstacle that seeks to stop the management from attaining the budget

Budgetary slack is one of the types of budget

A built-in cushion that seeks to increase the chances of the actual performance being better than the budget.

#2. What ONE best describes target costing?

In target costing, different markets are identified for a product and the product is sold in the markets at lower price

costs are allocated to different pools in target costing

Target costing is a type of semi-variable cost

It identifies market price of the product and subtract a desired profit margin to arrive at a target cost for the product

#3. Select TWO purposes for which standard costing may be used for

Select TWO

Reduction in Tax

Assessing performance

Planning

To run the business in line with the legal framework

#4. A company has calculated that the target cost for Product DELTA is £40 per unit. This is based on an expected production and sales volume of 3,000 units. If the company wishes to earn 25% profit, what market price will be the target cost?

£73

£60

£53

£47

#5. Grapevine company uses throughput accounting. Details of one of its products per unit are as follows. Selling price = 200, Material costs = 100, Conversion costs = 70, Time on bottleneck resource= 6 minutes. What is the return per hour for the product? (nearest 10)

1630

1050

2400

1170

Return is calculated as;

Seling Price-material price/(time on bottleneck resource/conversion costs)

Putting values we get,

200-100/(6/70)

= 100/0.085

= 1166.8 OR 1170 (nearest 10)

#6. A business manufactures a product that it sells for $100. Variable costs are $10/unit. Next month's fixed costs are expected to be $1 million. If the finance director wants to make a profit of $150,000. How many units must be sold?

13889

17131

12889

8199

Formula to calculate = Fixed costs Profit/contribution per unit

Putting values we get,

1,000,000 150,000/90

= 1,250,000/90

= 13,889

#7. A company sells a product at a price of $40, earning a 20% profit. Expected increase in the costs are 7%. The company wants to maintain the 20% profit. What would be the new selling price?

$42.8

$43.8$

$48.2

$45.7

Current cost is 80% of $40 = 40*0.8= $32.

Expected increase of 7% will increase the price to 32*1.07= $34.24

New selling price, keeping 20% profit = 34.24/0.8= $42.8

#8. Select which TWO of the following are advantages of participative budgeting.

Select TWO

It demotivates employees

More attainable budgets

It keeps employees motivated

It is less time consuming

#9. For the number of production runs, which of the following might be a cost driver?

Variable overhead costs

Material handling costs

Development costs

Production Scheduling

#10. Which of the following is a distinctive feature of throughput accounting?

Costs are only allocated to products when completed or sold.

It does not attempt to maximise profitability.

In throughput accounting, work in progress is valued at labour cost only

In throughput accounting, work in progress is valued at material cost only.

#11. The relationship between sales, volume and profit is illustrated by _____?

A volume-sales chart

A break-even chart

A profit-volume chart

A Pi chart

#12. Decision makers who use maximax criteria to make decisions are called _____?

Risk-neutral

Risk-managers

Risk-seekers

Risk-averse

#13. Which ONE of the following statements about Activity Based Costing (ABC) is true?

ABC works best with High-Low method

ABC must be based on activities that are measurable in quantitative terms.

ABC is a marginal costing system

ABC can only be used in manufacturing businesses

#14. Zero-based budgeting is best for businesses that _____________

have no previous business record

are well-established

manufactures products in bulk

are operating under limited budget

#15. Which ONE of the following cost would you expect in the development stage of a product's life cycle?

Customer support costs

Testing costs

Marketing costs

Inventory holding costs

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PM F5 ACCA Mock

3 comments

MUHAMMED AFLAH February 23, 2022 - 7:51 am

THE QUESTIONS AND ANSWERS HAVE MANY MISTAKES HOPE TOU WILL CORRECT IT

Emmanuel Tembo July 31, 2022 - 7:16 pm

Interestingly enough, and awesome.

SHERELY November 23, 2022 - 10:08 pm

kindly check question 7 since we are told profit is $150000 not $250000

ACCA Performance management PM (F5) Mock Exam