Free BA2 – Fundamentals of Management Accounting Exam CIMAPRA17-BA2-1 Exam Practice Test

Which of the following is a relevant cost?

• A sunk cost
• A committed cost
• An incremental cost
• A historical cost

Which THREE of the following statements could explain why a favourable material usage variance has arisen?

• Improved staff training of production staff
• Increased quality control standards
• Purchase of higher quality materials
• Pilferage
• Improved production methods
• Increased efficiency in the purchasing department

Which of the following statements about batch costing is true?

• Batch costing must use absorption costing.
• The cost of a batch is found by multiplying the cost of one unit by the number of units in the batch.
• Batch costing must use marginal costing.
• The cost of a unit is found by dividing the cost of a batch by the number of units in the batch.

Within the relevant range, a variable cost is a cost which:

• cannot be forecast with any degree of accuracy because of its variability.
• varies in total in proportion to the level of activity.
• varies per unit in proportion to the level of activity.
• varies in total in proportion to the level of inflation.

Which one of the following is NOT a main purpose of management accounting?

• Planning
• Controlling
• Decision making
• Reporting to shareholders

Relevant costs for decision making are.

• Past costs incurred
• Future costs which will be affected by the decision
• Variable costs only
• Unavoidable costs

A cash budget is an example of a:

• Fixed budget
• Flexible budget
• Rolling budget
• Variable budget

When preparing the material purchases budget, the quantity to be purchased equals:

• Material usage + opening inventory - closing inventory
• Material usage - opening inventory - closing inventory
• Material usage - opening inventory + closing inventory
• Material usage + opening inventory + closing inventory

CORRECT TEXTPQR Manufacturing Ltd. has £3,000,000 of fixed costs for the forthcoming period. The company produces a single product 'X', which has a selling price of £75 per unit and total cost of £50.75% of the total cost represents variable costs.How many units (to the nearest whole unit) will the organization need to produce and sell to generate a profit of £500,000?

A company uses an integrated accounting system.The accounting entries for the issue of direct materials to production would be:

• Debit: cost of sales control account Credit: raw material control account
• Debit: work in progress control account Credit: raw material control account
• Debit: raw material control account Credit: production overhead control account
• Debit: raw material control account Credit: work in progress control account