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CIMA BA2 – Fundamentals of Management Accounting Question Tutorial Sample Questions:

1. Which of the following is NOT a valid purpose of budgeting?

A) To comply with financial reporting requirements.
B) To coordinate the different activities of an organisation.
C) To communicate targets to managers.
D) To authorise managers to incur expenditure.

2. Which of the following statements relating to risk and uncertainty is correct?

A) Risk exists when we know all of the possible outcomes but not their probabilities.
B) Uncertainty exists when we know all of the possible outcomes but not their probabilities.
C) Uncertainty exists when we know all of the possible outcomes and their probabilities.
D) Risk exists when we do not know all of the possible outcomes.

3. Which of the following would NOT be an appropriate performance measure for a profit centre manager?

A) Contribution per unit
B) Return on capital employed
C) Gross margin
D) Sales price variance

4. A company that uses standard costing wishes to reconcile the difference between the profit for a period calculated using absorption costing with that calculated using marginal costing.
Which TWO of the following will NOT help with this reconciliation? (Choose two.)

A) The fixed production overhead absorption rate.
B) The opening inventory.
C) The closing inventory.
D) The under or over absorbed fixed production overheads.
E) The actual fixed production overheads.

5. A company which manufactures and sells one product has fixed costs of $80,000 per period. The selling price per unit of $25 generates a contribution/sales ratio of 40%.
How many units would need to be sold in a period to earn a profit of $10,000?

A) 32,000
B) 9,000
C) 36,000
D) 8,000

Solutions: