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CIMA BA2 – Fundamentals of Management Accounting Question Tutorial Sample Questions:

1. Which of the following is NOT a characteristic of useful operational level information?

A) Sufficiently accurate.
B) Available immediately.
C) Focused on the decision to be made.
D) Governed by financial reporting standards.

2. In a company that manufactures many different products on the same production line, which TWO of the following would NOT be classified as indirect production costs? (Choose two.)

A) Factory rent.
B) Royalties paid to the designers of the products.
C) Salary paid to the factory manager.
D) Maintenance costs for the company's only production line.
E) Commissions paid to the sales team.

3. The budget and actual cost statements for the production department for the latest period were as follows.

Notes.
1. The 10% increase in production was required to meet unexpected additional sales demand.
2. The production manager is responsible for negotiating the price of materials with suppliers.
3. The normal working time is 900 hours per period. Any overtime worked above these 900 hours is paid at a premium of 50%.
In preparing the flexible budget for the latest period, which TWO of the following statements are correct?
(Choose two.)

A) The material quantity should be flexed to 60,000 + 10% = 66,000 kg.
B) The overtime hours should be flexed to (1,000 + 10%) - 900 = 200 hours.
C) The basic pay hours should not be flexed; they should remain at 1,000 hours.
D) The material price should be flexed to the actual figure of $3.10 per kg.
E) The fixed costs should be flexed to $40,000 + 10% = $44,000.

4. The following data relate to the latest period.

A statement is to be prepared that reconciles the difference between the flexible budget profit and the actual profit.
Which TWO of the following will appear on this statement? (Choose two.)

A) An adverse material price variance.
B) A favourable labour rate variance.
C) An adverse sales price variance.
D) A favourable sales volume contribution variance.
E) An adverse labour efficiency variance.

5. An organisation produces and sells a single product. The organisation's management accountant has reported the following information for the most recent period.

Which TWO of the following statements are valid? (Choose two.)

A) If the contribution to sales ratio changed to 30%, the breakeven point would become higher.
B) If the fixed cost changed to $445,000, the breakeven point would not change.
C) If the sales volume changed to 220,000 units, the breakeven point would not change.
D) If the variable cost changed to $16 per unit, the breakeven point would become lower.
E) If the selling price changed to $22 per unit, the breakeven point would become lower.

Solutions: