ICAEW ACA Certificate Level · Business Insight and Performance

Management decision making

9 practice questions, each with the answer and an explanation.

Practise Management decision making now

Random questions from this topic, one at a time. You see the answer and the explanation straight after each one.

All 9 questions

  1. A product sells for £50 and has a variable cost of £30. Fixed costs are £180,000. What is the breakeven point in units?
  2. Using the same product (price £50, variable cost £30, fixed costs £180,000), actual sales are 11,000 units. What is the margin of safety as a percentage of actual sales?
  3. Using the same product (contribution £20 a unit, fixed costs £180,000), how many units must be sold to earn a profit of £60,000?
  4. Machine hours are limited to 1,100. Product A has a contribution of £24 per unit, uses 3 hours and has demand of 200 units. Product B has £30, 5 hours and demand of 150 units. Product C has £18, 2 hou…
  5. A project costs £95,000 now and will produce cash flows of £30,000, £50,000 and £40,000 at the end of years 1, 2 and 3. The discount rate is 8%, with discount factors of 0.926, 0.857 and 0.794 for yea…
  6. A project costs £120,000 and gives cash flows of £30,000, £50,000, £60,000 and £40,000 at the end of years 1 to 4. What is the payback period?
  7. A project costs £200,000 and has a residual value of £20,000. Average annual accounting profit is £36,000. Using average investment, what is the accounting rate of return?
  8. A company is appraising a new factory. Which approach best incorporates sustainability into the investment appraisal?
  9. A company holds raw material that cost £8,000 and has no other use except being sold as scrap for £2,000. A customer order would use all the material. What is the relevant cost of the material for the…

Keep practising

More ICAEW ACA Certificate Level topics

All ICAEW ACA Certificate Level practice →

Ready for the full ICAEW ACA Certificate Level test?

Take a mock testICAEW ACA Certificate Level hub