CIMA CIMA Certifications CIMAPRO17-BA2-X1-ENG Questions & Answers

• Question 1:

  In order for the information in a management accounting report to be authoritative its contents must be:

  A. trusted and from reliable sources.

  B. complete and reported in a timely manner.

  C. complete and relevant.

  D. both financial and non-financial.

  Correct Answer: C

• Question 2:

  A company has spent $5,000 on a report into the viability of using a subcontractor. The report highlighted the following:

  A machine purchased six years ago for $30,000 would become surplus to requirements. It has a written-down value of $10,000 but would be resold for $12,000.

  A machine operator would be made redundant and would receive a redundancy payment of $40,000.

  The administration of the subcontractor arrangement would cost the company $25,000 each year.

  Which THREE of the following are relevant for the decision? (Choose three.)

  A. A relevant cost of $5,000 for the viability report.

  B. A relevant cost of $30,000 for the machine.

  C. A relevant cost of $40,000 for the redundancy payment.

  D. A relevant cost of $10,000 for the machine.

  E. A relevant cost of $25,000 each year for administration.

  F. A relevant revenue of $12,000 for the machine.

  Correct Answer: ADE

• Question 3:

  A company's policy is to hold closing inventory each month equal to 10% of the next month's budgeted sales volume. The budgeted sales volumes of product Q for months 1 and 2 are 1,660 units and 2,300 units respectively. The production budget for product Q for month 1 is:

  A. 1,596 units

  B. 1,494 units

  C. 1,724 units

  D. 1,890 units

  Correct Answer: B

• Question 4:

  Which THREE of the following are parts of the master budget? (Choose three.)

  A. Finished goods inventory budget.

  B. Budgeted statement of profit or loss.

  C. Cash flow budget.

  D. Sales budget.

  E. Administration overhead budget.

  F. Budgeted statement of financial position.

  Correct Answer: BCF

  Reference: https://www.acowtancy.com/textbook/acca-ma/d2-budget-preparation/master-budgets/notes

• Question 5:

  Which of the following statements regarding variances is valid?

  A. Using higher quality material than standard could explain an adverse labour efficiency variance.

  B. Improved maintenance of production machinery could explain an adverse material usage variance.

  C. An adverse labour rate variance could explain a favourable labour efficiency variance.

  D. Poor supervision could explain a favourable labour rate variance.

  Correct Answer: C

  Reference: https://accounting-simplified.com/management/variance-analysis/labor/rate.html

• Question 6:

  A company has two production departments and two service departments (Maintenance and Stores). The overhead costs of each of the departments are as follows.

  

  The following equations represent the reapportionment of each of the service department overheads to the other.

  M = 4,700 + 0.1S S = 5,800 + 0.2M

  Where M = total Maintenance overhead after reapportionment from Stores S = total Stores overhead after reapportionment from Maintenance 60% of the total Maintenance overhead and 50% of the total Stores overhead are to be apportioned to Production Department 1.

  The total production overhead for Production Department 1 after reapportionment of the service departments' overhead costs is closest to:

  A. $71,672

  B. $75,500

  C. $70,720

  D. $71,821

  Correct Answer: C

• Question 7:

  The forecast costs per unit for a new product are as follows:

  

  The company uses marginal cost plus pricing and all products are required to achieve a 40% margin. What would be the selling price per unit?

  A. $37.80

  B. $46.20

  C. $45.00

  D. $55.00

  Correct Answer: B

• Question 8:

  A company produces a single product for which the following cost data are available.

  

  Analysis by the management accountant has shown that 100% of direct material cost and 50% of direct labour cost are variable costs. 50% of production overhead and 100% of selling and distribution overhead are variable costs.

  What is the marginal cost per unit?

  A. $6

  B. $7

  C. $8

  D. $9

  Correct Answer: B

• Question 9:

  A company which manufactures and sells one product has fixed costs of $80,000 per period. The selling price per unit of $25 generates a contribution/sales ratio of 40%.

  How many units would need to be sold in a period to earn a profit of $10,000?

  A. 9,000

  B. 8,000

  C. 36,000

  D. 32,000

  Correct Answer: D

• Question 10:

  Which THREE of the following are included in the Global Management Accounting Principles? (Choose three.)

  A. Accountability

  B. Influence

  C. Value

  D. Professional behaviour

  E. Relevance

  F. Integrity

  Correct Answer: BCE

  Reference: https://www.cgma.org/resources/reports/globalmanagementaccountingprinciples/about-the-principles.html#?tab-1=3