CIMA CIMAPRA17-BA2-1 Exam Questions Instant Access

Question 1

Refer to the exhibit.

The management accountant has completed the appraisal of a project which is forecast to generate the following cash flows.

It has now been discovered that the cash inflow in year 3 has been overestimated.

What will be the effect on the calculated net present value (NPV) and the payback period?

ANPV increase; payback period increase

BNPV decrease; payback period increase

CNPV decrease; payback period stay the same

DNPV decrease; payback period decrease

Answer : C

Question 2

Which THREE of the following statements could explain why an adverse material price variance has arisen?

AChange in market conditions causing a general price rise

BIncreased efficiency in the purchasing department

CPurchase of inferior quality materials

DBulk purchasing resulting in higher discounts

EPoor production planning

FPoor inventory control

Answer : A, E, F

Question 3

The direct labor rate variance is:

AThe difference between the actual wages paid and the standard labor cost for the output produced

BThe difference between the actual wages paid and what should have been paid for the hours worked

CThe difference between the actual rate of efficiency and the standard rate of efficiency for direct labor

DThe standard wage rate multiplied by the difference between the actual hours worked and the standard hours needed for the output produced

Answer : B

Question 4

Which one of the following is NOT one of the five stated fundamental principles of CIMA's code of ethics?

AIntegrity

BObjectivity

CPunctuality

DConfidentiality

Answer : C

Question 5

Refer to the exhibit.

Each unit of product 'Yell' uses 3 kgs of material 'X'.

The budgeted details for July are as follows:

It is anticipated that sales of product 'Yell' in July will be 5,000 units.

The amount of material 'X' that needs to be purchased in July is:

A15,500 kgs

B15,600 kgs

C15,700 kgs

D16,100 kgs

Answer : C

Question 6

The company Andrew works for currently uses traditional absorption costing. He needs to convince his manager that the company should be using activity based costing instead.

Andrew has compiled this list of advantages:

(1)ABC will allow us to make better pricing decisions

(2)ABC will give us tighter control over costs as we will be able to pinpoint inefficiencies

(3)ABC will help improve our product mix by highlighting the best combination of materials

(4)ABC is suitable for our business as we only produce one product

Which statement or statements are INCORRECT?

A(3) and (4)

B(1) and (2)

C(2) and (3)

D(1) and (4)

E(2) and (4)

F(1) and (3)

Answer : A

Question 7

The decision rule to use when determining the optimal production plan if there is a scarce resource is:

AMaximise profit per unit

BMaximise profit per unit of scarce resource

CMaximise contribution per unit

DMaximise contribution per unit of scarce resource

Answer : D

CIMA BA2 - Fundamentals of Management Accounting CIMAPRA17-BA2-1 Exam Questions