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

1. DRAG DROP
A company manufactures three products using the same direct labour which will be in short supply next month.
No inventories are held. Data for the three products are as follows:

The fixed costs are all committed costs and cannot now be altered for the next month.
Place the labels against the correct product to indicate the order of priority for manufacture that will maximise the profit for the next month.
Select and Place:

2. Which of the following statements about batch costing is true?

A) The cost of a unit is found by dividing the cost of a batch by the number of units in the batch.
B) Batch costing must use marginal costing.
C) The cost of a batch is found by multiplying the cost of one unit by the number of units in the batch.
D) Batch costing must use absorption costing.

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

A) Taking a long-term investment decision on the basis of the project's internal rate of return (IRR).
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) Deciding to make a long-term investment in a project on the basis of its payback period.

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

A) The salaries of supervisors who oversee the manufacture of several different products are an example of a direct labour cost.
B) Materials consumed in the maintenance of machinery used to manufacture several different products are an example of a direct material cost.
C) Rent paid for a factory in which several different products are produced is an example of an indirect expense.
D) Royalties paid on per unit basis are an example of an indirect expense.

5. 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) 1,890 units
B) 1,724 units
C) 1,596 units
D) 1,494 units

Solutions: