Skip to content

ACCA Applied Knowledge · Business and Technology · Accounting and finance functions within business organisations

Kestrel Ltd's production manager wants to know why material costs rose last month compared with the budget. Which function is best placed to provide this analysis?

The management accounting function is best placed, because it produces internal control reports such as variance analysis that compare actual costs with budget and explain differences. Annual published accounts and audit reports are external, annual and too aggregated to help the production manager.

  1. AThe management accounting function, through variance analysisCorrect
  2. BThe external auditor, through the audit report
  3. CThe financial accounting function, through the published annual report
  4. DThe tax function, through the corporate tax computation

Explanation

Comparing actual and budgeted costs and explaining differences is variance analysis, a management accounting activity for internal control. The annual report and audit report are external and too infrequent and aggregated for this purpose.

Did you get it right without looking?

One question tells you little. A timed set on Accounting and finance functions within business organisations shows your real accuracy, how long you take and where you lose marks.

Practise Accounting and finance functions within business organisationsFree diagnostic mock

More Accounting and finance functions within business organisations questions