Association of Chartered Certified Accountants · Management Accounting
ACCA MA Management information: practice questions with answers
6 free exam-style questions on Management information for ACCA MA Management Accounting. Try each one, then open the answer to read the explanation. Fincora has 17 original questions on this syllabus area.
Question 1
Brightwater Haulage operates a fleet of delivery lorries from six regional depots. Which of the following decisions is a tactical decision?
- A Setting next year's delivery price bands and allocating the annual vehicle replacement budget between the six depots
- B Deciding whether to expand into refrigerated freight in a neighbouring country over the next ten years
- C Deciding which driver will take each delivery route from the northern depot tomorrow morning
- D Choosing which lorry should be refuelled first when two arrive at the depot pump at the same time
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Answer: A. Planning and decision-making operate at three levels.
- Strategic: long term, whole organisation, sets objectives (e.g. entering a new market abroad).
- Tactical: medium term (often a year), concerned with obtaining and using resources efficiently to achieve strategic objectives (e.g. annual pricing structures, allocating the capital budget across depots).
- Operational: short term, day to day, concerned with specific tasks (e.g. tomorrow's driver rota).
Setting next year's price bands and dividing the annual replacement budget between depots is a tactical decision.
Question 2
Which of the following statements about data and information is correct?
- A Data is the result of processing information so that it becomes meaningful and useful to managers
- B Good information should be complete in every detail, whatever the cost of collecting and producing it
- C Information is data that has been processed and organised so that it is meaningful and useful to the person receiving it
- D Information is only useful to management if it has been produced from the organisation's own internal records
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Answer: C. Data are raw, unprocessed facts (e.g. individual clock-card times). Information is data that has been processed (sorted, summarised, analysed) so that it is meaningful to the user (e.g. a labour efficiency report).
Qualities of good information include being accurate, complete enough for its purpose, cost-beneficial, user-targeted, relevant, from an authoritative source, timely and easy to use. Information can come from both internal and external sources.
Question 3
Which of the following costs is correctly classified according to its behaviour?
- A Factory rent, paid as a fixed amount each year regardless of output: a variable cost
- B Telephone charges made up of a monthly line rental plus a charge for each call made: a fixed cost
- C Supervisors' salaries, where one supervisor is needed for every ten machine operators: a stepped fixed cost
- D Direct materials, where the cost per unit of output is constant: a semi-variable cost
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Answer: C. Cost behaviour classifications:
- Fixed: total cost unchanged as activity changes within the relevant range (factory rent).
- Variable: total cost changes in proportion to activity (direct materials).
- Semi-variable: part fixed and part variable (line rental plus call charges).
- Stepped fixed: fixed over a range of activity, then rising in a step when capacity is exceeded (one supervisor per ten operators: the cost jumps when the 11th, 21st... operator is employed).
Question 4
Which of the following statements about management accounting, compared with financial accounting, is correct?
- A Management accounts must be prepared every year by all limited companies and filed with the national companies registry
- B Management accounting records only historical monetary transactions so that the information can be verified by the external auditor
- C Management accounting information is prepared mainly for internal users, has no prescribed format and often includes forecasts and non-financial information
- D Management accounts must follow International Financial Reporting Standards so that managers can compare results with other companies
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Answer: C. Financial accounting produces statutory financial statements for external users (shareholders, lenders, tax authorities). Their format and content are set by law and accounting standards, they mainly record past transactions in money terms, and they are usually audited.
Management accounting produces information for internal users (managers). There is no legal requirement or prescribed format, so the information is designed to suit the decision. It can cover the future (budgets, forecasts), include non-financial measures (units, hours, quality data) and be produced as often as managers need it.
Question 5
Velmont Supermarkets is reviewing the sources of data it collects. Which of the following is an example of machine (sensor) data?
- A Temperature readings recorded automatically every minute by sensors fitted inside the refrigerated display cabinets
- B Sales transaction records from the EPOS system, showing each item sold with its time, price and payment method
- C Comments and star ratings that customers post about Velmont's stores on social media and review websites
- D Notes typed up by store managers summarising complaints that customers have made to them in person
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Answer: A. Data can be classified by how it is generated:
- Machine (sensor) data: captured automatically by devices such as sensors, meters, scanners monitoring equipment or GPS trackers (e.g. cabinet temperature logs).
- Transactional data: generated by business transactions such as sales, purchases and payments (e.g. checkout records).
- Human-sourced (social) data: created by people, such as social media posts, reviews, emails and notes.
Only the cabinet temperature readings are generated automatically by machines.
Question 6
Wenlock Couriers records the following data for each parcel it delivers. Which item is continuous quantitative data?
- A The number of delivery attempts needed before the parcel was delivered
- B The weight of the parcel, measured in kilograms at the depot
- C The driver's assessment of the condition of the packaging as good, fair or poor
- D The postcode of the address to which the parcel was delivered
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Answer: B. Data can be classified as:
- Quantitative: can be measured or counted and expressed as a number. It may be:
- discrete: can take only certain values, usually whole numbers obtained by counting (number of attempts, number of parcels);
- continuous: can take any value within a range, obtained by measuring (weight, time, distance).
- Qualitative: describes a characteristic or category that cannot be measured numerically (packaging condition rated good/fair/poor, a postcode used as a label).
Only the weight of the parcel is both quantitative and continuous.
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