CIMA CIMAPRA17-BA2-1 Exam Practice Test Instant Access

Question 1

In order for the information in a management accounting report to be authoritative its contents must be:

Atrusted and from reliable sources.

Bcomplete and reported in a timely manner.

Ccomplete and relevant.

Dboth financial and non-financial.

Answer : C

Question 2

In responsibility accounting, costs and revenues are grouped according to:

Athe budget holder.

Btheir function.

Cthe service provided.

Dtheir behaviour.

Answer : D

Question 3

The concept of the time value of money:

Arecognises the fact that a cash flow received today will always be worth more than a larger cash flow received in the future.

Bis used for making short term decisions.

Cdetermines the higher interest rates that must be paid on longer term loans.

Drecognises the fact that earlier cash flows are worth more because they can be reinvested.

Answer : A

Question 4

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?

AThe margin of safety is negative because the target profit will not be achieved from the forecast sales volume.

BIf the fixed cost is changed to $20,000 the sales volume required to break even will decrease.

CIf the forecast sales volume is changed to 190 units the sales volume required to achieve the target profit will decrease.

DIf the selling price is changed to $510 the sales volume required to achieve the target profit will increase.

Answer : C

Question 5

A company's management accountant wishes to calculate the present value of the cost of renting a delivery vehicle. There will be five annual rental payments of $5,000, the first of which is due immediately. The company's discount rate is 12%.

Which TWO of the following are valid ways to calculate the present value of the rental payments? (Choose two.)

A$5,000 + ($5,000 x 3.605)

B$5,000 + $5,000/1.12 + $5,000/(1.12)2 + $5,000/(1.12)3 + $5,000/(1.12)4

C$5,000/1.12 + $5,000/(1.12)2 + $5,000/(1.12)3 + $5,000/(1.12)4+ $5,000/(1.12)5

D$5,000 x 3.605

E$5,000 + ($5,000 x 3.037)

Answer : A, D

Question 6

Which of the following would NOT require taking into account the time value of money?

ADeciding to make a long-term investment in a project on the basis of its payback period.

BSelecting an investment project on the basis that it has a positive net present value (NPV).

CCalculating the present value of a five-year annuity.

DTaking a long-term investment decision on the basis of the project's internal rate of return (IRR).

Answer : C

https://www.acowtancy.com/textbook/acca-fm/d1-investment-appraisal-techniques/npv/notes

Question 7

The following data are available for a company that produces and sells a single product.

The company's opening finished goods inventory was 2,500 units.

The fixed overhead absorption rate is $8.00 per unit.

The profit calculated using marginal costing is $16,000.

The profit calculated using absorption costing and valuing its inventory at standard cost is $22,400.

The company's closing finished goods inventory is:

A3,300 units

B1,700 units

C3,900 units

D8,900 units

Answer : A

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