ACCA Applied Knowledge · Management Accounting · Spreadsheets
A management accountant wants to show how total monthly production cost of Lakeside Ltd is split between direct materials, direct labour and overheads for a single month. Which type of chart is most suitable for showing each component as a proportion of the total?
A pie chart is most suitable because it shows each cost element as a proportion of the total for one period. Line graphs show trends over time, scatter diagrams show relationships between variables, and histograms show frequency distributions, so none of them display parts of a whole as clearly.
- APie chartCorrect
- BLine graph
- CScatter diagram
- DHistogram
Explanation
A pie chart displays each component as a share of a whole, which is exactly what is needed for one month's cost split. A line graph shows trends over time, a scatter diagram shows the relationship between two variables, and a histogram shows frequency distribution of continuous data.
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