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

• Question 41:

  Which of the following statements about batch costing is true?

  A. Batch costing must use absorption costing.

  B. The cost of a batch is found by multiplying the cost of one unit by the number of units in the batch.

  C. Batch costing must use marginal costing.

  D. The cost of a unit is found by dividing the cost of a batch by the number of units in the batch.

  Correct Answer: D

  Reference: https://www.acowtancy.com/textbook/acca-ma/c3-cost-accounting-methods/c3ai-job-and-batch-costing/notes

• Question 42:

  Which of the following is NOT a valid purpose of budgeting?

  A. To communicate targets to managers.

  B. To comply with financial reporting requirements.

  C. To coordinate the different activities of an organisation.

  D. To authorise managers to incur expenditure.

  Correct Answer: D

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

• Question 43:

  Which TWO of the following are characteristics of Management Accounts? (Choose two.)

  A. Governed by rules and regulations

  B. Provide information to managers

  C. Provide information needed by shareholders

  D. Internally focused

  E. Statutory requirement

  Correct Answer: BE

• Question 44:

  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. Salary paid to the factory manager.

  B. Factory rent.

  C. Maintenance costs for the company's only production line.

  D. Commissions paid to the sales team.

  E. Royalties paid to the designers of the products.

  Correct Answer: AB

• Question 45:

  A company is considering investing $57,000 in a machine that will last for five years, after which time it will have no value. The machine will generate additional revenue of $190,000 each year. Annual running costs, including depreciation of $11,400 will amount to $168,400.

  Assuming that all cash flows occur evenly, the payback period of the investment in the machine is closest to:

  A. 2 years 8 months

  B. 1 year 9 months

  C. 1 year 7 months

  D. 2 years 6 months

  Correct Answer: C

• Question 46:

  The staffing policy for a supermarket is to have one cashier station open for every forecasted 20 customers per hour. Cashiers are hired by the hour as and when required, and do not perform any other duties. The cost of the cashiers in relation to the number of customers would be classified as which type of cost?

  A. Stepped fixed cost

  B. Variable cost

  C. Semi-variable cost

  D. Fixed cost

  Correct Answer: C

  Reference: https://www.acowtancy.com/textbook/acca-ma/a3-cost-classification/a3g-types-of-cost-behaviour/notes

• Question 47:

  A company uses standard absorption costing. Budgeted and actual data for the latest period are as follows.

  

  What was the production overhead absorption rate per unit?

  A. $21

  B. $27

  C. $35

  D. $29

  Correct Answer: C

• Question 48:

  The year-to-date results at the end of month 9 included sales revenue of $3,600,000 and variable costs of $2,100,000.

  During month 10, sales revenue was $450,000 and variable costs were $270,000.

  What year-to-date contribution to sales ratio (C/S ratio) would be reported at the end of month 10?

  A. 58,5%

  B. 70,9%

  C. 41,5%

  D. 40,0%

  Correct Answer: A

• Question 49:

  The following data are available for a company that produces and sells a single product.

  The company's opening finished goods inventory was 2,500 units.

  The fixed overhead absorption rate is $8.00 per unit.

  The profit calculated using marginal costing is $16,000.

  The profit calculated using absorption costing and valuing its inventory at standard cost is $22,400.

  The company's closing finished goods inventory is:

  A. 3,300 units

  B. 1,700 units

  C. 3,900 units

  D. 8,900 units

  Correct Answer: A

• Question 50:

  Which of the following would NOT require taking into account the time value of money?

  A. Deciding to make a long-term investment in a project on the basis of its payback period.

  B. Selecting an investment project on the basis that it has a positive net present value (NPV).

  C. Calculating the present value of a five-year annuity.

  D. Taking a long-term investment decision on the basis of the project's internal rate of return (IRR).

  Correct Answer: C

  Reference: https://www.acowtancy.com/textbook/acca-fm/d1-investment-appraisal-techniques/npv/notes