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

1. A company operates an integrated standard cost accounting system. The standard price of raw material A is
$20 per litre. At the start of period 1, the inventory of 500 litres of raw material A was valued at $20 per litre.
During period 1, 100 litres of raw material A were purchased at an actual price of $21 per litre. During period 2,
550 litres of raw material A were issued to Job 789.
In respect of the above events, which TWO of the following statements are correct? (Choose two.)

A) An adverse material price variance should be recorded in the statement of profit or loss for period 2.
B) An adverse material price variance should be recorded in the statement of profit or loss for period 1.
C) The raw material inventory at the end of period 1 should include 100 litres valued at $21 per litre.
D) The raw material inventory at the end of period 2 should be valued at $20 per litre.
E) The first 500 litres of raw material A issued should be debited to the Job 789 account at $20 per litre, and the remaining 50 litres at $21 per litre.

2. FILL BLANK
The records of a manufacturing company show the following relationship between total cost and output.

The budgeted output for Period 3 is 27,000 units. Assume that previous cost behaviour patterns will continue.
What is the total budgeted cost for Period 3?
Give your answer in the nearest whole number.

3. 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) If the fixed cost is changed to $20,000 the sales volume required to break even will decrease.
B) The margin of safety is negative because the target profit will not be achieved from the forecast sales volume.
C) If the selling price is changed to $510 the sales volume required to achieve the target profit will increase.
D) If the forecast sales volume is changed to 190 units the sales volume required to achieve the target profit will decrease.

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

A) Professional behaviour
B) Integrity
C) Value
D) Accountability
E) Influence
F) Relevance

5. The following is an extract from a budgetary control report for the latest period:

The budget variance for prime cost is:

A) $3,260 favourable
B) $3,340 adverse
C) $3,260 adverse
D) $18,580 adverse

Solutions: