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ACCA Skills Level Variable Costing Analysis — practice questions

Explore 10 free Variable Costing Analysis questions in ACCA Skills Level Management Accounting. Open each question or exercise to read its content, reference answers and available explanation.

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Variable Costing Analysis questions and exercises with answers

Showing questions 1–10 of 10.

Order the absorption costing linesRead the answer and worked solution →Sort each trait by costing methodRead the answer and worked solution →Pick the higher figure each roundRead the answer and worked solution →Spot the false line in each setRead the answer and worked solution →Which subtotal replaces gross profit on a variable costing statement of profit or loss?Read the answer and worked solution →Sales are $750,000 and variable cost of goods sold is $375,000. What is the manufacturing margin?Read the answer and worked solution →Manufacturing margin is $375,000 and variable selling and administrative expenses are $75,000. What is the contribution margin?Read the answer and worked solution →Fixed manufacturing costs are $150,000 and 20,000 units are produced. What is the fixed manufacturing cost per unit?Read the answer and worked solution →A hotel records rooms revenue of $84,000 and total variable costs of $32,900 for the month. What is its contribution margin?Read the answer and worked solution →A hotel reports a contribution margin of $51,100 for the month against total fixed costs of $38,900. What is its operating income?Read the answer and worked solution →

Worked practice questions

Order the absorption costing lines

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Steps
  1. Sales
  2. Cost of goods sold
  3. Gross profit
  4. Selling and admin
  5. Operating income
Instructions
Tap the lines in the order they appear from the top of the statement.
_Source: Jonick, Principles of Managerial Accounting, section 6.1 Introduction_

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Sort each trait by costing method

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Left
Variable costing
Items
  1. Item
    Mfg margin line
    Answer
    Variable costing
  2. Item
    Contribution line
    Answer
    Variable costing
  3. Item
    Fixed FOH expensed
    Answer
    Variable costing
  4. Item
    Made for managers
    Answer
    Variable costing
  5. Item
    Gross profit line
    Answer
    Absorption costing
  6. Item
    External reporting
    Answer
    Absorption costing
  7. Item
    Fixed FOH in stock
    Answer
    Absorption costing
Right
Absorption costing
Instructions
Swipe left for variable costing, right for absorption costing. Mfg means manufacturing.
_Source: Jonick, Principles of Managerial Accounting, section 6.1 Introduction_

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Pick the higher figure each round

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Questions
  1. A
    Product 1 margin ratio
    B
    Product 2 margin ratio
    Higher value
    Product 2 margin ratio
  2. A
    East region margin ratio
    B
    West region margin ratio
    Higher value
    West region margin ratio
  3. A
    Online sales margin ratio
    B
    In-store margin ratio
    Higher value
    Online sales margin ratio
  4. A
    Crew margin in dollars
    B
    Davis margin in dollars
    Higher value
    Crew margin in dollars
  5. A
    Crew margin ratio
    B
    Davis margin ratio
    Higher value
    Davis margin ratio
  6. A
    Customer 1 margin ratio
    B
    Customer 2 margin ratio
    Higher value
    Customer 2 margin ratio
Instructions
Tap the side with the larger amount. Margin here means contribution margin.
_Source: Jonick, Principles of Managerial Accounting, section 6.6 Contribution Margin Analysis_

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More Management Accounting topics

Cost Volume Profit AnalysisDifferential AnalysisVariance AnalysisActivity-Based Costing