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

• Question 21:

  In responsibility accounting, costs and revenues are grouped according to:

  A. the budget holder.

  B. their function.

  C. the service provided.

  D. their behaviour.

  Correct Answer: D

  Reference: https://books.google.com.pk/books?id=8SaARYOflPICandpg=PA41andlpg=PA41anddq=In+responsibility+accounting,+costs+and+revenues+are+grouped+according+to+behaviourandsource=blandots=-k1MUf5PG8andsig=ACfU3U0B5Z_NUf3JK_FFiGhls3aJOiivgandhl=enandsa=Xandved=2ahUKEwjgtsXqk8rnAhXFz4UKHRPWCuUQ6AEwCnoECAgQAQ#v=onepageandq=In%20responsibility%20accounting%2C%20costs%20and%20revenues%20are%20grouped%20according% 20to%20behaviourandf=false

• Question 22:

  A confectionery manufacturer is considering adding a new product to the current range. Forecast data for the product are as follows.

  

  Incremental fixed costs attributable to the new product are forecast to be $24,000 each period.

  The forecast sales volume of 180 units is insufficient to achieve the target profit of $10,000 each period.

  Which of the following statements is correct?

  A. The margin of safety is negative because the target profit will not be achieved from the forecast sales volume.

  B. If the fixed cost is changed to $20,000 the sales volume required to break even will decrease.

  C. If the forecast sales volume is changed to 190 units the sales volume required to achieve the target profit will decrease.

  D. If the selling price is changed to $510 the sales volume required to achieve the target profit will increase.

  Correct Answer: C

• Question 23:

  Which type of budget would be the most suitable for a cash budget?

  A. Fixed budget

  B. Rolling budget

  C. Incremental budget

  D. Flexible budget

  Correct Answer: B

  Reference: https://www.acowtancy.com/textbook/acca-pm/budgetary-systems/types-of-budgetary-systems/notes

• Question 24:

  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. A favourable labour rate variance.

  B. A favourable sales volume contribution variance.

  C. An adverse sales price variance.

  D. An adverse labour efficiency variance.

  E. An adverse material price variance.

  Correct Answer: CD

• Question 25:

  Assume that a unit of output is the cost object. Which of the following statements is valid?

  A. Royalties paid on per unit basis are an example of an indirect expense.

  B. Materials consumed in the maintenance of machinery used to manufacture several different products are an example of a direct material cost.

  C. The salaries of supervisors who oversee the manufacture of several different products are an example of a direct labour cost.

  D. Rent paid for a factory in which several different products are produced is an example of an indirect expense.

  Correct Answer: C

  Reference: https://www.acowtancy.com/textbook/acca-ma/a3-cost-classification/cost-objects-cost-units-and-cost-centres-/notes

• Question 26:

  A management accountant has forecast the following cash inflows from four potential projects.

  

  All four projects require the same initial investment and will last for four years. They all result in a positive net present value but only one of the projects can be undertaken. Which project should be selected?

  A. Project A

  B. Project B

  C. Project C

  D. Project D

  Correct Answer: A

• Question 27:

  A company makes and sells a range of products. The standard details per unit for one of these products, product X, are as follows.

  

  To meet sales demand, the company must obtain 2,000 units of product X next month. There is sufficient labour capacity to produce 1,500 of these units in-house during normal time. However, any production above this level would require

  overtime working which would be paid at a premium of 50%.

  The company can buy as many units of product X as it wishes next month from an external supplier at a price of $120 per unit.

  What is the total financial benefit to the company of purchasing the appropriate number of units from the external supplier rather than producing them in-house?

  A. $20,000

  B. $30,000

  C. $27,500

  D. $5,000

  Correct Answer: D

• Question 28:

  A company's management accountant wishes to calculate the present value of the cost of renting a delivery vehicle. There will be five annual rental payments of $5,000, the first of which is due immediately. The company's discount rate is 12%.

  Which TWO of the following are valid ways to calculate the present value of the rental payments? (Choose two.)

  A. $5,000 + ($5,000 x 3.605)

  B. $5,000 + $5,000/1.12 + $5,000/(1.12)2 + $5,000/(1.12)3 + $5,000/(1.12)4

  C. $5,000/1.12 + $5,000/(1.12)2 + $5,000/(1.12)3 + $5,000/(1.12)4+ $5,000/(1.12)5

  D. $5,000 x 3.605

  E. $5,000 + ($5,000 x 3.037)

  Correct Answer: AD

• Question 29:

  A company that uses standard costing wishes to reconcile the difference between the profit for a period calculated using absorption costing with that calculated using marginal costing.

  Which TWO of the following will NOT help with this reconciliation? (Choose two.)

  A. The actual fixed production overheads.

  B. The closing inventory.

  C. The opening inventory.

  D. The under or over absorbed fixed production overheads.

  E. The fixed production overhead absorption rate.

  Correct Answer: AE

• Question 30:

  Every month for the last three years, a company has recorded the number of new customers for that month. The data have been summarised and grouped as follows:

  

  What is the arithmetic mean of the number of new customers per month?

  A. 6.22

  B. 6.50

  C. 6.38

  D. 8.50

  Correct Answer: D