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. Budgetary control ensures alignment between actual performance and:

A. Industry benchmarks

B. Budgeted goals and objectives

C. Estimated marketing trends

D. Sales team projections

2 / 40

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

A. Overheads are higher than marginal cost

B. Fixed cost exceeds break-even point

C. Supplier offers a lower price

D. Total variable cost is below supplier’s price

3 / 40

3. An advantage of a fixed budget is its:

A. Emphasis on innovation

B. Alignment with dynamic goals

C. Simplicity and ease of use

D. Flexibility in volatile markets

4 / 40

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

A. Last year’s budget

B. Industry norms

C. Competitors’ budgets

D. New strategic plans

5 / 40

5. A sales budget helps organizations forecast:

A. Number of employees needed

B. Overhead expenses

C. Cash flow for asset acquisition

D. Expected revenue from product sales

6 / 40

6. Fixed costs under marginal costing are regarded as

A. Period costs

B. Direct costs per unit

C. Variable expenses

D. Inventory valuation bases

7 / 40

7. Absorption costing includes

A. Only variable production costs

B. Only direct labor and materials

C. Fixed and variable production costs

D. Excludes any indirect costs

8 / 40

8. Marginal cost reflects the

A. Fixed cost allocation per unit

B. Cost incurred for additional units produced

C. Total overhead cost of production

D. Total direct and indirect costs combined

9 / 40

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

A. Maximize departmental budgets

B. Minimize fixed expenses

C. Add unnecessary reserves

D. Mitigate unexpected financial risks

10 / 40

10. Closing inventory under marginal costing is valued at

A. Variable cost per unit

B. Full production cost

C. Average market price

D. Selling price per unit

11 / 40

11. Closing stock valuation under marginal costing includes

A. Administrative overheads

B. Only fixed costs

C. Only variable costs

D. All cost elements

12 / 40

12. Contribution margin is derived by subtracting

A. Variable cost from sales

B. Fixed cost from gross profit

C. Overheads from net profit

D. Total cost from selling price

13 / 40

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

A. Competitor benchmarks

B. Budget targets set at the beginning

C. Industry averages

D. Flexible spending guidelines

14 / 40

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

A. Under government control

B. Highly stable

C. Predictable and repetitive

D. Dynamic and variable

15 / 40

15. Budgeted income statements are prepared to project:

A. Only variable costs

B. Asset depreciation

C. Sales volume

D. Profit or loss for a period

16 / 40

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

A. Each revenue stream

B. Direct labor cost alone

C. All new capital assets

D. Every single expense

17 / 40

17. A master budget includes:

A. Marketing-only expenses

B. Operating, capital, and financial budgets

C. Performance-based incentives

D. Performance-based incentives

18 / 40

18. 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

19 / 40

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

A. Last year’s budget

B. Competitors’ budgets

C. New strategic plans

D. Industry norms

20 / 40

20. Cash budgets help organizations to manage:

A. Sales growth rates

B. Liquidity and cash flow

C. Equipment depreciation

D. Hiring plans

21 / 40

21. A key advantage of marginal costing is its

A. Complex cost allocation method

B. Confusion with period costs

C. High dependency on fixed costs

D. Simplified overhead treatment

22 / 40

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

A. Performance indexing

B. Variance analysis

C. Compliance check

D. Audit review

23 / 40

23. Marginal costing considers only

A. Fixed production costs

B. Variable production costs

C. Financial accounting allocations

D. Total costs including overhead

24 / 40

24. Marginal costing provides valuable support in

A. Strategic mergers

B. Short-term decision making

C. Filing annual tax returns

D. Preparing capital budgets

25 / 40

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

A. Justify each item from a zero base

B. Increase all expenses annually

C. Base the budget on last year’s actuals

D. Avoid including indirect costs

26 / 40

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

A. Encourage zero-based analysis

B. Ignore past performance

C. Reinforce inefficient spending patterns

D. Discourage the use of fixed budgets

27 / 40

27. Absorption costing income statement begins with

A. Net profit

B. Gross profit

C. Contribution margin

D. Operating margin

28 / 40

28. Contribution margin equals

A. Gross margin minus cost of

B. Sales minus fixed cost

C. Sales minus variable cost

D. Gross margin minus cost of

29 / 40

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

A. Last quarter’s reports

B. Government statistics

C. Budgeted figures

D. Industry projections

30 / 40

30. Absorption costing treats fixed overheads as

A. Future sunk cost

B. Part of product cost

C. Irrelevant costs

D. Period expenses only

31 / 40

31. A major advantage of marginal costing is

A. Overstated cost of sales

B. Complex overhead recovery

C. Elimination of variable cost analysis

D. Simplified treatment of fixed overheads

32 / 40

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

A. Sunk cost

B. Imputed cost

C. Opportunity cost

D. Replacement cost

33 / 40

33. Pricing decisions under marginal costing benefit from

A. Ignoring contribution margin

B. Random cost classifications

C. Analyzing cost-volume-profit relationships

D. Emphasizing total absorption cost

34 / 40

34. Sunk costs are best described as

A. Marginal costs considered for pricing

B. Historical costs with no relevance to decisions

C. Opportunity costs related to investment

D. Future expenses yet to be incurred

35 / 40

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

A. Profit margin after tax

B. Profit by subtracting fixed cost from contribution

C. Cash flow budget

D. Break-even units only

36 / 40

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

A. Sales – Fixed cost = Break-even

B. Fixed cost – Profit

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

D. Sales × Cost per unit

37 / 40

37. Direct labor budgets focus on:

A. Production-related labor costs

B. Advertising and promotions

C. Inventory costs

D. Distribution expenses

38 / 40

38. Relevant costs are identified based on their

A. Historical nature and fixed value

B. Impact on past financial decisions

C. Future, differential, and cash-based features

D. Certainty and predetermined values

39 / 40

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

A. Employee salaries

B. Equipment purchases

C. Utility bills

D. Office stationery

40 / 40

40. Budgeting enables organizations to:

A. Outsource key operations

B. Eliminate all financial risks

C. Allocate resources efficiently

D. Avoid paying taxes

Your score is

The average score is 55%

FUOYE ACC 206 CBT Practice

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