Free CIMA BA2 Practice Exam with Questions & Answers | Set: 6

In a manufacturing company which produces a range of products, the cost of a royalty payment made to the product designer would be classified as A.

Refer to the exhibit.

In this profit/volume graph, which distance indicates the contribution earned at level of activity L?

Distance a

Distance b

Distance c

Distance d

Refer to the exhibit.

The standard labour cost per unit of product 'B' is $24 (6 hours @ $4 per hour).

During period 5 the following details were recorded:

The output during period 5 was

Relevant costs for decision making are.

What is the purpose of performing an NPV?

Which of the following would have an impact on the cash budget?

(a) Change in payables terms

(b) Change in the rate of depreciation

(c) Change in the percentage discount allowed

(d) Change of inventory holding policy

Which one of the following is NOT a main purpose of management accounting?

The company Andrew works for currently uses traditional absorption costing. He needs to convince his manager that the company should be using activity based costing instead.

Andrew has compiled this list of advantages:

(1)ABC will allow us to make better pricing decisions

(2)ABC will give us tighter control over costs as we will be able to pinpoint inefficiencies

(3)ABC will help improve our product mix by highlighting the best combination of materials

(4)ABC is suitable for our business as we only produce one product

Which statement or statements are INCORRECT?

Which of the following definitions best describes Zero based budgeting?

A manufacturing company uses an absorption based costing system. At the start of the period they planned to make 30,000 units at a selling price of £900 per unit

Fixed overheads were expected to be £900,000. The variable cost per unit is £300.

At the end of the period actual overheads were £858,000, and 33,000 units were produced, of which 32,000 were sold.

Which of the following statements are TRUE? Select ALL that apply.