ICSAN Management Accounting Practice Questions - ICSAN Professional Programme I - Management Accounting Exam - ICSAN Management Accounting Practice Questions - ICSAN Professional Programme I

Question 1

A manufacturing firm in Lagos has the following output and total costs for two recent months: Month 1 (10,000 units: ₦250,000 total cost); Month 2 (15,000 units: ₦325,000 total cost). Using the high-low method, what is the estimated total cost for a month where 12,000 units are produced?

₦280,000 ₦270,000 ₦290,000 ₦300,000

Correct Answer:

₦280,000

Question 2

Which of the following descriptions best fits a 'step-up' fixed cost?

A cost that increases by a constant amount for each additional unit of output produced. A cost that remains constant up to a certain level of activity, and then increases by a lump sum to a new level where it remains constant until the next capacity limit is reached. A cost containing both a fixed and a variable component, such as electricity costs. A cost that increases exponentially with output due to diminishing returns.

Correct Answer:

A cost that remains constant up to a certain level of activity, and then increases by a lump sum to a new level where it remains constant until the next capacity limit is reached.

Question 3

A direct factory worker is paid an overtime premium. In which of the following circumstances would this overtime premium be classified as a direct cost?

When the overtime is worked at the specific request of a customer to complete a special rush job. When the overtime is worked due to general labour shortages in the local industrial area. When the overtime is due to machine breakdown in the preceding production line. Overtime premiums are always classified as indirect costs regardless of the circumstances.

Correct Answer:

When the overtime is worked at the specific request of a customer to complete a special rush job.

Question 4

How is 'conversion cost' defined in management accounting?

The sum of direct materials cost and direct labour cost. The sum of direct labour cost and production overheads. The sum of prime costs and administrative overheads. The total cost required to acquire raw materials and transport them to the factory.

Correct Answer:

The sum of direct labour cost and production overheads.

Question 5

Which of the following best describes a 'sunk cost'?

A cost that can be saved or avoided by choosing an alternative course of action. A cost that has already been incurred by a past decision and cannot be recovered or changed by any future decision. The value of the benefit sacrificed when one alternative is chosen in preference to another. An estimated future cost that will vary depending on the decision made.

Correct Answer:

A cost that has already been incurred by a past decision and cannot be recovered or changed by any future decision.

Question 1

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Prepare with the ICSAN Management Accounting Practice Questions - ICSAN Professional Programme I - Management Accounting Exam practice quiz. This question bank includes 100 questions covering cost, units, hours, actual, and standard. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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ICSAN Management Accounting Practice Questions - ICSAN Professional Programme I - Management Accounting Exam

This practice set contains 100 questions from the matching question bank and focuses on cost, units, hours, actual, and standard. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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ICSAN Management Accounting Practice Questions - ICSAN Professional Programme I - Management Accounting Exam

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