ACCA Performance Management (F5) Certification Practice Exam

Which of the following choices encompasses types of performance measurement divisions?

1. Cost center, Investment return, Profit margin, Employee satisfaction

2. Cost center, Revenue center, Profit center, Investment center

3. Revenue center, Cost control, Profit center, Revenue growth

4. Cost allocation, Investment analysis, Profit forecasting, Sales revenue

The correct answer is: Cost center, Revenue center, Profit center, Investment center

The correct answer identifies the core types of performance measurement divisions used in management accounting and performance management. Cost centers focus on controlling costs incurred while not directly generating revenues. These centers are evaluated based on their efficiency in cost management. Revenue centers, on the other hand, are measured by their ability to generate revenues without a direct responsibility for costs. Profit centers are responsible for both generating revenue and controlling costs, thus measured on profitability. Finally, investment centers evaluate the performance based on return on investment (ROI) and encompass responsibilities for both profitability and asset management. This classification aligns well with the fundamental divisions in performance measurement, as each category reflects distinct managerial responsibilities and performance criteria that are critical for organizational efficiency and overall performance evaluation. The other options mix terms that do not align as directly with established categories of performance measurement.