Home CBT TEST FUOYE ACC 206 CBT Practice

FUOYE ACC 206 CBT Practice

Aruwaji Philip

May 23, 2025

Take your time to read instructions before taking this test.

There are 40 questions which you are to answer in 15 minutes that gives you roughly 30 seconds per question.

If you can get at least 60%, you can be rest assured that you’ll ace ACC 206 exam

In a normal exam you will be asked between 40 – 60 questions but I only arranged 40 questions

Note

Do not be in a hurry to answer the questions
Do not waste time on a question you don’t know
Move as fast as possible and starting with questions that don’t have calculation first to save time
Always crosscheck
Don’t be in a hurry to submit, you are not in a competition
Don’t be scared. Getting an A is easy
Don’t be over confident, you can end up a D, E or F. Calm your blood, no be only you sabi book
Please do well to use our comment box incase there’s a message you want to pass to us

70 – 100 A

60 – 69 B

50 – 59 C

45 – 49 D

40 – 44 E

0 – 39 F

I wish you success

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ACC 206

1 / 40

1. The equation “Sales - Variable Cost = Contribution” helps in determining

A. Profit margin after tax

B. Cash flow budget

C. Break-even units only

D. Profit by subtracting fixed cost from contribution

2 / 40

2. Relevant costs are identified based on their

A. Certainty and predetermined values

B. Future, differential, and cash-based features

C. Impact on past financial decisions

D. Historical nature and fixed value

3 / 40

3. The purpose of including contingency plans in a budget is to:

A. Mitigate unexpected financial risks

B. Add unnecessary reserves

C. Minimize fixed expenses

D. Maximize departmental budgets

4 / 40

4. In make-or-buy decisions, internal production is preferred when

A. Supplier offers a lower price

B. Fixed cost exceeds break-even point

C. Total variable cost is below supplier’s price

D. Overheads are higher than marginal cost

5 / 40

5. A flexible budget is particularly beneficial in environments that are:

A. Highly stable

B. Under government control

C. Dynamic and variable

D. Predictable and repetitive

6 / 40

6. Contribution margin is derived by subtracting

A. Total cost from selling price

B. Fixed cost from gross profit

C. Overheads from net profit

D. Variable cost from sales

7 / 40

7. Sunk costs are best described as

A. Opportunity costs related to investment

B. Marginal costs considered for pricing

C. Historical costs with no relevance to decisions

D. Future expenses yet to be incurred

8 / 40

8. The break-even formula derived from marginal costing is

A. Sales × Cost per unit

B. Fixed cost – Profit

C. Fixed cost / (Selling price – Variable cost)

D. Sales – Fixed cost = Break-even

9 / 40

9. Marginal costing considers only

A. Financial accounting allocations

B. Fixed production costs

C. Variable production costs

D. Total costs including overhead

10 / 40

10. One potential drawback of incremental budgeting is its tendency to:

A. Reinforce inefficient spending patterns

B. Ignore past performance

C. Discourage the use of fixed budgets

D. Encourage zero-based analysis

11 / 40

11. Absorption costing treats fixed overheads as

A. Part of product cost

B. Future sunk cost

C. Irrelevant costs

D. Period expenses only

12 / 40

12. Pricing decisions under marginal costing benefit from

A. Random cost classifications

B. Emphasizing total absorption cost

C. Ignoring contribution margin

D. Analyzing cost-volume-profit relationships

13 / 40

13. The term used to describe costs already incurred and no longer relevant is

A. Opportunity cost

B. Imputed cost

C. Sunk cost

D. Replacement cost

14 / 40

14. Marginal costing provides valuable support in

A. Short-term decision making

B. Filing annual tax returns

C. Preparing capital budgets

D. Strategic mergers

15 / 40

15. A master budget includes:

A. Marketing-only expenses

B. Operating, capital, and financial budgets

C. Performance-based incentives

D. Performance-based incentives

16 / 40

16. Performance monitoring in budgetary control involves comparing actual results to:

A. Budgeted figures

B. Government statistics

C. Last quarter’s reports

D. Industry projections

17 / 40

17. Budgetary control ensures alignment between actual performance and:

A. Industry benchmarks

B. Budgeted goals and objectives

C. Estimated marketing trends

D. Sales team projections

18 / 40

18. Absorption costing includes

A. Only direct labor and materials

B. Excludes any indirect costs

C. Only variable production costs

D. Fixed and variable production costs

19 / 40

19. Cash budgets help organizations to manage:

A. Hiring plans

B. Equipment depreciation

C. Liquidity and cash flow

D. Sales growth rates

20 / 40

20. Performance evaluation under fixed budgeting compares actual results to:

A. Flexible spending guidelines

B. Budget targets set at the beginning

C. Industry averages

D. Competitor benchmarks

21 / 40

21. Fixed costs under marginal costing are regarded as

A. Inventory valuation bases

B. Direct costs per unit

C. Period costs

D. Variable expenses

22 / 40

22. A sales budget helps organizations forecast:

A. Cash flow for asset acquisition

B. Overhead expenses

C. Expected revenue from product sales

D. Number of employees needed

23 / 40

23. Absorption costing income statement begins with

A. Contribution margin

B. Operating margin

C. Net profit

D. Gross profit

24 / 40

24. A key feature of zero-based budgeting is the requirement to:

A. Base the budget on last year’s actuals

B. Justify each item from a zero base

C. Increase all expenses annually

D. Avoid including indirect costs

25 / 40

25. An incremental budget is developed by making changes to:

A. Industry norms

B. Last year’s budget

C. New strategic plans

D. Competitors’ budgets

26 / 40

26. The process of analyzing reasons for differences between actual and budgeted amounts is known as:

A. Compliance check

B. Variance analysis

C. Audit review

D. Performance indexing

27 / 40

27. Marginal cost reflects the

A. Fixed cost allocation per unit

B. Cost incurred for additional units produced

C. Total direct and indirect costs combined

D. Total overhead cost of production

28 / 40

28. Budgeted income statements are prepared to project:

A. Asset depreciation

B. Sales volume

C. Profit or loss for a period

D. Only variable costs

29 / 40

29. A key advantage of marginal costing is its

A. High dependency on fixed costs

B. Confusion with period costs

C. Complex cost allocation method

D. Simplified overhead treatment

30 / 40

30. Direct labor budgets focus on:

A. Distribution expenses

B. Production-related labor costs

C. Inventory costs

D. Advertising and promotions

31 / 40

31. A capital expenditure budget would most likely include planning for:

A. Utility bills

B. Equipment purchases

C. Employee salaries

D. Office stationery

32 / 40

32. A major advantage of marginal costing is

A. Complex overhead recovery

B. Elimination of variable cost analysis

C. Overstated cost of sales

D. Simplified treatment of fixed overheads

33 / 40

33. A zero-based budgeting system requires justification for:

A. Every single expense

B. Each revenue stream

C. Direct labor cost alone

D. All new capital assets

34 / 40

34. Budgeting enables organizations to:

A. Allocate resources efficiently

B. Outsource key operations

C. Avoid paying taxes

D. Eliminate all financial risks

35 / 40

35. An advantage of a fixed budget is its:

A. Emphasis on innovation

B. Simplicity and ease of use

C. Flexibility in volatile markets

D. Alignment with dynamic goals

36 / 40

36. An incremental budget is developed by making changes to:

A. New strategic plans

B. Last year’s budget

C. Competitors’ budgets

D. Industry norms

37 / 40

37. Contribution margin equals

A. Gross margin minus cost of

B. Sales minus variable cost

C. Sales minus fixed cost

D. Gross margin minus cost of

38 / 40

38. Closing inventory under marginal costing is valued at

A. Variable cost per unit

B. Average market price

C. Full production cost

D. Selling price per unit

39 / 40

39. Closing stock valuation under marginal costing includes

A. Only variable costs

B. Only fixed costs

C. Administrative overheads

D. All cost elements

40 / 40

40. A production budget determines:

A. The cash required for payroll

B. Quantities of goods to be manufactured

C. How much marketing is required

D. The level of administrative costs

Your score is

The average score is 61%

FUOYE ACC 206 CBT Practice

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