CIMA CIMAPRA17-BA2-1 Exam Practice Test Instant Access

Question 1

A company achieves a profit/volume ratio of 25%. Sales for the month of July were 127,280 and fixed costs were 24,872.

What was the profit for the month?

A6,218

B38,038

C6,948

D25,602

Answer : C

Question 2

Refer to the exhibit.

An extract from the budget for GS is given below:

The net profit is after charging depreciation for the year of $26,000.

Receivables are expected to rise by $4,000 in the year.

Payables and inventories are both expected to fall by $5,000 in the year.

What is the company's budgeted cash holding at the end of the year?

A$70,000

B$65,000

C$73,000

D$39,000

Answer : B

Question 3

Overhead absorption is best described as:

AThe identification of costs specifically attributable to a particular cost centre

BThe process of sharing costs amongst two or more cost centres

CThe charging of overheads to cost units produced

DThe identification of overhead cost variances

Answer : C

Question 4

Which THREE of the following are characteristics of job costing?

AIt is appropriate where homogeneous products are manufactured

BIt is only appropriate in manufacturing environments

CCosts are traced to separately identifiable cost units

DIt cannot be applied in a public sector or not for profit organization

EA separate work in progress account is maintained for each cost unit

FIt is a specific order costing system

Answer : C, E, F

Question 5

What is the purpose of performing an NPV?

AIt is a project appraisal technique that calculates a project's contribution to the wealth of the company.

BIt is technique that calculates the present value of all company assets in case of liquidation.

CIt allows the company to decide which departments will benefit the most from investment.

Answer : A

Question 6

In investment appraisal, the calculation of the payback period

Aplaces the same value on all cash flows received over the whole life of a project.

Bplaces the same value on all cash flows received during the payback period.

Cplaces greater value on cash flows received in earlier years during the payback period.

Dplaces greater value on cash flows received in later years during the payback period.

Answer : B

Question 7

A company uses an integrated accounting system.

The accounting entries for an issue of indirect materials to production would be:

ADebit: Work in progress control account Credit: Raw material control account

BDebit: Production overhead control account Credit: Raw material control account

CDebit: Finished goods control account Credit: Raw material control account

DDebit: Raw material control account Credit: Work in progress control account

Answer : B

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