IMANET Certified Management Accountant CMA Exam Questions

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Total 1336 questions
Question 1

The following information relates to Clyde Corporation, Which produced and sold 50,000 units a recent accounting period:

For the next accounting period. if production and sales are ,expected to be 40.000 units, the company should anticipate a contribution margin par unit of



Answer : D

Unit contribution margin is the deference between unit selling price and unit variable cost Unit selling price is $17 ($850,000 + 50.000 unit). and unit variable cost is $370 [(S 140.000 variable manufacturing cost + $45,000 variable S&A cost) + 50000 units sold] Accordingly, unit contribution margin is $13.30 ($17 - $3 70).


Question 2

The elements of the marketing mix from the seller's perspective are known as the 4 Ps. Each class of marketing tools corresponds to one of the following 4 Cs, the classes of customer benefits. Which of the following is a correspondence between a customer's 4 Cs and a seller's 4Ps?



Answer : B

The categories of controllable elements in a marketing program reflect the decisions to be made about the marketing mix (the combination of marketing tools). From the seller's perspective, the categories of marketing tools are product, price ,place , and promotion (sometimes called the ''4 PCs'' of marketing). The seller chooses tools from these categories to develop a marketing mix for achieving its objectives in the target market. From the buyer's perspective, each class of marketing tools corresponds to a customer benefit: customer solution (product), customer cost (price), convenience (place), and communication (promotion). Thus , a firm will succeed by using the 4 Ps to deliver the 4 Cs of marketing. For example, decisions about place (distribution channels, delivery options, locations, etc.) should provide the optimal feasible convenience for customers.


Question 3

Which factor most likely encourages entry into an existing market?



Answer : A

Subsidies for new firms lower entry barriers. Thus, new firms may enter the industry and intensify competition. Government policy also may affect competition via regulations that encourages or discourage substitutes or affect costs, that govem competitive behavior, or that limit growth. Government also may be a buyer or supplier.


Question 4

A manufacturer has been approached by a new customer who wants to place a one-time order for a component similar to one that the manufacturer makes for another customer. Existing sales will not be affected by acceptance of this order. The manufacturer has a policy of setting its targeted selling price at 60% over full manufacturing cost. The manufacturing costs and the targeted selling price for the existing product are presented as follows.

The manufacturer has excess capacity to produce the quantity of the component desired by the new customer. The direct materials used in the component for the new customer would cost the manufacturer $0.25 less than the component currently being made. The variable selling expenses (packaging and shipping) would be the same, or $0.90 per unit. Under these circumstances, the minimum unit price at which the manufacturer would accept the special order is one exceeding.



Answer : B

Because the manufacturer has excess capacity and existing sales will be unaffected, the minimum price the manufacturer should be willing to accept is anything above the total variable cost of the unit ($2.05+$3.60+$2.70+$0.90=$9.25), an amount that includes the variable manufacturing cost and the variable selling expenses. The fixed costs are not relevant.


Question 5

Moorhead Manufacturing Company produces two products for which the following data have been tabulated. Fixed manufacturing cost is applied at a rate of $1 .00 per machine hour. The sales manager has had a $160,000 increase in the budget allotment for advertising and wants to apply the money to the most profitable product. The products are not substitutes for one another in the eyes of the company's customers.

Suppose the sales manager chooses to devote the entire $160,000 to increased advertising for BD-4. The minimum increase in sales dollars of BD-4 required to offset the increased advertising would be



Answer : C

Sales dollars must increase sufficiently to cover the $160,600 increase in advertising. The unit contribution margin for BD-4 is $50 ($3 --- $2.50 variable costs), and the CMR is 1/6 (UCM $3 sales price). Dividing the $160,000 by 1/6 gives the sales dollars necessary to generate a CM of $960,000 ($160,000 1/6 $960,000).


Question 6

Tonykinn Company is contemplating marketing a new product. Fixed costs will be $800000 for production of 75.000 units or less and $1 .200.000 if production exceeds 75,000 units The variable cost ratio is 60% for the first 75,000 units. Variable costs will decrease to 50% of sales for units in excess of 75.000. If the product is expected to sell for $25 per unit, how many units must Tonykinn sell to break even?



Answer : B

The BEP in units is equal to fixed cost divided by the difference between unit selling price and 'unit variable cost (the unit contribution margin) At less than 75,000 units, fixed costs are $800,000 and UCM is $10 [$25 ---($25 x 60%)]. At this UCM. 80.000 units ($800,000 + $10) must be sold, but this volume is not within the relevant range. At any production level greater than 75,000 units, total fixed costs are $1,200,000 but there are two UCM layers The first 75,000 units sold will produce a contribution margin of $750.000 (75.000 x $10). Hence, another $450,000 ($1,200,000 ---$750,000) must be contributed The IJCM is $1250 [$25 ---($25 x 50%)] for units in excess of 75,000, :and 36,000 ($450,000 $12.50) additional units must be sold. Total unit sales at the SEP are 111,000(75.000 + 36.000). ---


Question 7

Pontotoc Industries manufactures a product that is used as a subcomponent by other manufacturers. It has the following price and cost structure:

Pontotoc received a special, one-time order for 1,000 units of its product. However, Pontotoc has an alternative use for this capacity that will result in a contribution of $20,000. The minimum unit price for this special, onetime order is in excess of



Answer : D

Incremental (relevant) costs include the variable costs of $100 ($40 direct materials + $30 direct labor + $24 variable overhead + $6 variable selling costs). Furthermore, if the company does not have idle capacity, the unit price must cover the opportunity costs as well as the variable costs. Given that the alternative use will generate a $20,000 contribution, the 1,000 special-order units will have be generate at least $20 per unit ($20,000 1,000 units) above their variable costs, a total of $120 per unit.


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