Academic Year 2026–2027 UNISA Assignment: MAC3761 Management
Accounting III Fully Solved Assignment with Verified Answers | Cost
Management, Budgeting and Forecasting, Performance Measurement,
Strategic Management Accounting, Decision-Making Techniques and
Financial Control
,Question 1: In the context of cost-volume-profit analysis, what is the primary
limitation of assuming a linear revenue function?
A. It ignores the time value of money.
B. It assumes that total costs remain constant regardless of output.
C. It presumes that selling price per unit remains unchanged across all sales volumes.
D. It focuses only on fixed costs.
CORRECT ANSWER: C. It presumes that selling price per unit remains unchanged
across all sales volumes.
Rationale: A linear revenue function assumes a constant selling price per unit, which is
often unrealistic as price discounts may be required to achieve higher sales volumes.
This limitation is central to CVP analysis and affects the accuracy of break-even and
target profit calculations.
Question 2: When calculating the economic order quantity (EOQ), which of the
following is NOT a required assumption?
A. Demand for the product is known and constant.
B. Lead time for order delivery is known and constant.
C. Quantity discounts are available for bulk orders.
D. No stockouts are permitted.
CORRECT ANSWER: C. Quantity discounts are available for bulk orders.
Rationale: The basic EOQ model assumes no quantity discounts; purchase price is
constant per unit regardless of order size. The other options are explicit assumptions of
the classic EOQ model.
Question 3: Which management accounting approach focuses primarily on
eliminating non-value-added activities to reduce costs and improve efficiency?
A. Throughput accounting
B. Activity-based costing
C. Lean accounting
D. Resource consumption accounting
CORRECT ANSWER: C. Lean accounting
Rationale: Lean accounting is closely associated with lean manufacturing and aims to
eliminate waste (non-value-added activities). While ABC identifies activities, lean
accounting specifically focuses on waste reduction and streamlining processes for
continuous improvement.
,Question 4: The balanced scorecard translates an organisation's mission and
strategy into a comprehensive set of performance measures. Which of the
following is NOT a standard perspective of the balanced scorecard?
A. Customer
B. Financial
C. External Environment
D. Learning and Growth
CORRECT ANSWER: C. External Environment
Rationale: The four standard perspectives of the balanced scorecard are Financial,
Customer, Internal Business Processes, and Learning and Growth. The external
environment is not a specific perspective, although it may be considered in strategy
formulation.
Question 5: What does the term "cost driver" mean in the context of activity-based
costing?
A. A factor that causes a change in the cost of an activity.
B. The total overhead incurred by a production department.
C. A fixed cost allocated to a product line.
D. The selling price of a product.
CORRECT ANSWER: A. A factor that causes a change in the cost of an activity.
Rationale: A cost driver is any factor that influences or causes costs to change. In ABC,
it is used to assign activity costs to cost objects based on their consumption of
activities, such as machine hours or number of setups.
Question 6: Which of the following best describes the concept of "throughput" in
throughput accounting?
A. Total sales revenue minus total variable costs.
B. The rate at which the system generates money through sales.
C. The amount of inventory held during production.
D. The total manufacturing cost per unit.
CORRECT ANSWER: B. The rate at which the system generates money through
sales.
Rationale: Throughput in throughput accounting is defined as sales revenue minus
direct material costs. It represents the rate at which the system produces money
through sales, emphasizing the importance of the bottleneck constraint.
, Question 7: A company has two service departments and two production
departments. Which method of service department cost allocation fully recognises
reciprocal services between service departments?
A. Direct method
B. Step-down method
C. Reciprocal method
D. Activity-based method
CORRECT ANSWER: C. Reciprocal method
Rationale: The reciprocal method (or algebraic method) fully accounts for the mutual
services provided between service departments by solving simultaneous equations.
The direct method ignores interdependencies, while the step-down method only
partially recognises them.
Question 8: In a standard costing system, what does an unfavourable material
usage variance indicate?
A. More material was used than the standard allowed for actual output.
B. Material was purchased at a price higher than standard.
C. Labour efficiency was lower than expected.
D. Actual output was higher than budgeted output.
CORRECT ANSWER: A. More material was used than the standard allowed for
actual output.
Rationale: Material usage variance measures the difference between the actual
quantity of material used and the standard quantity allowed for actual output, valued at
the standard price. An unfavourable variance means actual usage exceeded the
standard.
Question 9: Which of the following is a characteristic of relevant costs for decision-
making?
A. They are historical costs.
B. They are unavoidable costs.
C. They differ between decision alternatives.
D. They include all fixed costs.
CORRECT ANSWER: C. They differ between decision alternatives.
Rationale: Relevant costs are future costs that differ between alternatives. Historical
costs, unavoidable costs, and costs that are the same across options are irrelevant for
decision-making.
Accounting III Fully Solved Assignment with Verified Answers | Cost
Management, Budgeting and Forecasting, Performance Measurement,
Strategic Management Accounting, Decision-Making Techniques and
Financial Control
,Question 1: In the context of cost-volume-profit analysis, what is the primary
limitation of assuming a linear revenue function?
A. It ignores the time value of money.
B. It assumes that total costs remain constant regardless of output.
C. It presumes that selling price per unit remains unchanged across all sales volumes.
D. It focuses only on fixed costs.
CORRECT ANSWER: C. It presumes that selling price per unit remains unchanged
across all sales volumes.
Rationale: A linear revenue function assumes a constant selling price per unit, which is
often unrealistic as price discounts may be required to achieve higher sales volumes.
This limitation is central to CVP analysis and affects the accuracy of break-even and
target profit calculations.
Question 2: When calculating the economic order quantity (EOQ), which of the
following is NOT a required assumption?
A. Demand for the product is known and constant.
B. Lead time for order delivery is known and constant.
C. Quantity discounts are available for bulk orders.
D. No stockouts are permitted.
CORRECT ANSWER: C. Quantity discounts are available for bulk orders.
Rationale: The basic EOQ model assumes no quantity discounts; purchase price is
constant per unit regardless of order size. The other options are explicit assumptions of
the classic EOQ model.
Question 3: Which management accounting approach focuses primarily on
eliminating non-value-added activities to reduce costs and improve efficiency?
A. Throughput accounting
B. Activity-based costing
C. Lean accounting
D. Resource consumption accounting
CORRECT ANSWER: C. Lean accounting
Rationale: Lean accounting is closely associated with lean manufacturing and aims to
eliminate waste (non-value-added activities). While ABC identifies activities, lean
accounting specifically focuses on waste reduction and streamlining processes for
continuous improvement.
,Question 4: The balanced scorecard translates an organisation's mission and
strategy into a comprehensive set of performance measures. Which of the
following is NOT a standard perspective of the balanced scorecard?
A. Customer
B. Financial
C. External Environment
D. Learning and Growth
CORRECT ANSWER: C. External Environment
Rationale: The four standard perspectives of the balanced scorecard are Financial,
Customer, Internal Business Processes, and Learning and Growth. The external
environment is not a specific perspective, although it may be considered in strategy
formulation.
Question 5: What does the term "cost driver" mean in the context of activity-based
costing?
A. A factor that causes a change in the cost of an activity.
B. The total overhead incurred by a production department.
C. A fixed cost allocated to a product line.
D. The selling price of a product.
CORRECT ANSWER: A. A factor that causes a change in the cost of an activity.
Rationale: A cost driver is any factor that influences or causes costs to change. In ABC,
it is used to assign activity costs to cost objects based on their consumption of
activities, such as machine hours or number of setups.
Question 6: Which of the following best describes the concept of "throughput" in
throughput accounting?
A. Total sales revenue minus total variable costs.
B. The rate at which the system generates money through sales.
C. The amount of inventory held during production.
D. The total manufacturing cost per unit.
CORRECT ANSWER: B. The rate at which the system generates money through
sales.
Rationale: Throughput in throughput accounting is defined as sales revenue minus
direct material costs. It represents the rate at which the system produces money
through sales, emphasizing the importance of the bottleneck constraint.
, Question 7: A company has two service departments and two production
departments. Which method of service department cost allocation fully recognises
reciprocal services between service departments?
A. Direct method
B. Step-down method
C. Reciprocal method
D. Activity-based method
CORRECT ANSWER: C. Reciprocal method
Rationale: The reciprocal method (or algebraic method) fully accounts for the mutual
services provided between service departments by solving simultaneous equations.
The direct method ignores interdependencies, while the step-down method only
partially recognises them.
Question 8: In a standard costing system, what does an unfavourable material
usage variance indicate?
A. More material was used than the standard allowed for actual output.
B. Material was purchased at a price higher than standard.
C. Labour efficiency was lower than expected.
D. Actual output was higher than budgeted output.
CORRECT ANSWER: A. More material was used than the standard allowed for
actual output.
Rationale: Material usage variance measures the difference between the actual
quantity of material used and the standard quantity allowed for actual output, valued at
the standard price. An unfavourable variance means actual usage exceeded the
standard.
Question 9: Which of the following is a characteristic of relevant costs for decision-
making?
A. They are historical costs.
B. They are unavoidable costs.
C. They differ between decision alternatives.
D. They include all fixed costs.
CORRECT ANSWER: C. They differ between decision alternatives.
Rationale: Relevant costs are future costs that differ between alternatives. Historical
costs, unavoidable costs, and costs that are the same across options are irrelevant for
decision-making.
