CIMA CIMAPRA17-BA2-1 Exam Practice Test Instant Access

Question 1

The gradient of the line plotted on a profit/volume (PV) graph is determined by:

AThe fixed costs

BThe number of units sold

CThe margin of safety

DThe profit/volume ratio

Answer : D

Question 2

In a company that manufactures many different products on the same production line, which TWO of the following would NOT be classified as indirect production costs? (Choose two.)

ASalary paid to the factory manager.

BFactory rent.

CMaintenance costs for the company's only production line.

DCommissions paid to the sales team.

ERoyalties paid to the designers of the products.

Answer : A, B

Question 3

A service company provides accountancy training courses. Which THREE of the following would be classified as variable costs of the company?

AHire of conference rooms

BOffice rental

CLecturers' fees (Lecturers are paid a flat rate per day)

DAdvertising (The company runs specific adverts for each course)

EDepreciation of office machinery

FCourse manager's salary

Answer : A, C, D

Question 4

Which of the following definitions best describes Zero based budgeting?

AA method of budgeting where an attempt is made to make the expenditure under each cost heading as close to zero as possible

BA method of budgeting whereby all activities are re-evaluated each time a budget is formulated

CA method of budgeting where the sum of revenues and expenditures in each budget centre must equal zero

DA method of budgeting whereby every item of expenditure does not have to be justified before its inclusion in the budget

Answer : B

Question 5

When preparing the material purchases budget, the quantity to be purchased equals:

AMaterial usage + opening inventory - closing inventory

BMaterial usage - opening inventory - closing inventory

CMaterial usage - opening inventory + closing inventory

DMaterial usage + opening inventory + closing inventory

Answer : C

Question 6

Which of the following entries to record the direct and indirect labour costs in the month are correct?

The correct entry is

Answer : C

Question 7

Which one of the following statements about historical cost and economic value is correct?

AThe economic value of an asset will depend on the alternative uses for the asset

BThe historical cost of an asset will always be lower than its economic value

CThe historical cost of an asset reduces as the remaining useful life of the asset reduces

DThe concept of economic value applies only to non-current assets

Answer : A

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