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

1. Which of the following would NOT be an appropriate performance measure for a profit centre manager?

A) Sales price variance
B) Contribution per unit
C) Gross margin
D) Return on capital employed

2. 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 1.
B) The raw material inventory at the end of period 2 should be valued at $20 per litre.
C) The raw material inventory at the end of period 1 should include 100 litres valued at $21 per litre.
D) An adverse material price variance should be recorded in the statement of profit or loss for period 2.
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.

3. Based upon extensive historical evidence, a company's daily sales volume is known to be normally distributed with a mean of 1,728 units and a standard deviation of 273 units.
What is the probability that, on any one day, the sales volume will be at least 1,300 units?

A) 5.82%
B) 44.18%
C) 73.89%
D) 94.18%

4. A company has spent $5,000 on a report into the viability of using a subcontractor. The report highlighted the following:
A machine purchased six years ago for $30,000 would become surplus to requirements. It has a written- down value of $10,000 but would be resold for $12,000.
A machine operator would be made redundant and would receive a redundancy payment of $40,000.
The administration of the subcontractor arrangement would cost the company $25,000 each year.
Which THREE of the following are relevant for the decision? (Choose three.)

A) A relevant cost of $10,000 for the machine.
B) A relevant cost of $30,000 for the machine.
C) A relevant cost of $25,000 each year for administration.
D) A relevant cost of $5,000 for the viability report.
E) A relevant cost of $40,000 for the redundancy payment.
F) A relevant revenue of $12,000 for the machine.

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

The budget variance for prime cost is:

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

Solutions: