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CIMA BA2 – Fundamentals of Management Accounting Question Tutorial Sample Questions:
1. 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) 1,596 units
C) 1,724 units
D) 1,494 units
2. A company is appraising two projects. Both projects are for five years. Details of the two projects are as follows.
Based on the above information, which of the following statements is correct?
A) An annuity could be used to calculate the net present value of the projects.
B) The annuity factor for project A would be lower than the annuity factor for the project B.
C) A perpetuity could be used to calculate the net present value of the projects.
D) The annuity factor for project A would double the annuity factor for project B.
3. The possible returns and associated probabilities of two independent projects are as follows:
It has been decided that both projects are to be launched.
Which TWO of the following statements are correct? (Choose two.)
A) The expected value of the total return is $40,000 gain.
B) The probability of the total return being a loss is 0.10.
C) The expected value of the total return is $41,500 gain.
D) The probability of making a total return of exactly $5,000 gain is 0.02.
E) The probability of the total return being a gain is less than 1.00.
4. FILL BLANK
A company has three production departments X, Y and Z, and one service department.
The service department's overhead has been apportioned to the production departments in the ratio 3:2:5. As a result of this apportionment, $2,070 was given to Department Y.
What is the amount of service department overhead that would have been apportioned to Department Z? Give your answer to the nearest dollar.
5. The budget and actual cost statements for the production department for the latest period were as follows.
Notes.
1. The 10% increase in production was required to meet unexpected additional sales demand.
2. The production manager is responsible for negotiating the price of materials with suppliers.
3. The normal working time is 900 hours per period. Any overtime worked above these 900 hours is paid at a premium of 50%.
In preparing the flexible budget for the latest period, which TWO of the following statements are correct?
(Choose two.)
A) The material quantity should be flexed to 60,000 + 10% = 66,000 kg.
B) The overtime hours should be flexed to (1,000 + 10%) - 900 = 200 hours.
C) The basic pay hours should not be flexed; they should remain at 1,000 hours.
D) The material price should be flexed to the actual figure of $3.10 per kg.
E) The fixed costs should be flexed to $40,000 + 10% = $44,000.
Solutions:
Question # 1 Answer: D | Question # 2 Answer: A | Question # 3 Answer: B,E | Question # 4 Answer: Only visible for members | Question # 5 Answer: B,D |

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