Free Certified Management Accountant (CMA) Exam CMA Exam Practice Test

A company with $280,000 of fixed costs has the following data:Assume three units of A are sold for each unit of B sold. How much will sales be in dollars of product B at the breakeven point?

• $200,000
• $240,000
• $280,000
• $840,000

Barker, Inc. has no capital rationing constraint and is analyzing many independent investment alternatives. Barker should accept all investment proposals

• If debt financing is available for them.
• That have positive cash flows.
• That provide returns greater than the before-tax cost of debt.
• That have a positive net present value.

Which one of the following will not occur in an organization that gives managers throughout the organization maximum freedom to make decisions?

• Individual managers regarding the managers of other segments as they do external parties
• Two divisions of the organization having competing models that aim for the same market segments.
• Delays in securing approval for the introduction of new products
• Greater knowledge of the marketplace and improved service to customers.

Products may be classified in a hierarchy according to ascending levels of customer value. At which level of this customer value hierarchy does most competition occur in developed countries?

• Potential product
• Augmented product
• Expected product
• Basic product

A company wishes to determine what advertising mix of radio, television, and newspapers offers the optimal desired result in increased sales and improved public image. Which of the following techniques is most appropriate to use?

• Synaptic.
• Value analysis.
• Brainstorming.
• Forced relationship.

The terms direct cost and indirect cost are commonly used in accounting. A particular cost might be considered a direct cost of a manufacturing department but an indirect cost of the product produced in the manufacturing department. Classifying a cost as either direct or indirect depends upon

• The behavior of the cost in response to volume changes.
• Whether the cost is expensed in the period in which it is incurred.
• The cost object to which the cost is being related.
• Whether an expenditure is unavoidable because it cannot be changed regardless of any action taken.

A major supplier has offered Alpha Corporation a year-end special purchase whereby Alpha could purchase 180,000 cases of sport drink at $10 per case. Alpha normally orders 30,000 cases per month at $12 per case. Alpha's cost of capital is 9%. In calculating the overall opportunity cost of this offer, the cost of carrying the increased inventory would be

• $32,400
• $40,500
• $64,800
• $81,000

50. Brown and Company uses the internal rate of return (IRR) method to evaluate capital projects. Brown is considering four independent projects with the following lRRs:Brown's cost of capital is 13%. Which one of the following project options should Brown accept based on IRR?

• Projects I and II only.
• Projects Ill and IV only.
• Project IV only.
• Projects I, II, Ill and IV.

Which of the following is not a component of market share?

• Customer demand
• Customer penetration
• Customer loyalty
• Price selectively

The limiting factor principle

• Applies to identifying alternative courses of action.
• Defines the problem.
• Justifies an alternative.
• Predicts future costs.