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

A company operates an absorption costing system. Overheads are absorbed using a pre-determined absorption rate using labour hours. In the period actual labour hours were 10,600, 400 hours below budget. Actual overheads for the period were 234,680 and there was an under-absorption of overheads of 1,480.

What was the budgeted level of overheads?

Refer to the exhibit.

SP, a manufacturing company, uses a standard costing system. The standard variable production overhead cost is based on the following budgeted figures for the year:

During the month of September, 5,300 actual hours were worked and 5,600 standard hours of output were produced. Total variable production overhead costs in September were $8,600.

What was the variable overhead efficiency variance in September?

Why is it important to have a professional body such as CIMA in management accounting?

A company uses an integrated accounting system.

The accounting entries for the issue of direct materials to production would be:

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.)

Refer to the exhibit.

A company has the following budgeted sales for the next 6 month period:

Cash sales are 20% of the total and receive a cash discount of 5%. The remaining 80% of sales are on credit. 60% of credit customers pay within one month, the remaining 40% pay within two months.

The cash receipts for the month of July will be:

Over absorption of overhead will always arise when: