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Free CIMA BA2 Practice Exam with Questions & Answers | Set: 9

Questions 81

A company manufactures three products using the same direct labour which will be in short supply next month. No inventories are held. Data for the three products are as follows:

BA2 Question 81

The fixed costs are all committed costs and cannot now be altered for the next month.

Place the labels against the correct product to indicate the order of priority for manufacture that will maximise the profit for the next month.

BA2 Question 81

Options:
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Questions 82

A company is appraising two projects. Both projects are for five years. Details of the two projects are as follows.

BA2 Question 82

Based on the above information, which of the following statements is correct?

Options:
A.

An annuity could be used to calculate the net present value of the projects.

B.

The annuity factor for project A would be lower than the annuity factor for the project B.

C.

A perpetuity could be used to calculate the net present value of the projects.

D.

The annuity factor for project A would double the annuity factor for project B.

Questions 83

Which THREE of the following are parts of the master budget? (Choose three.)

Options:
A.

Finished goods inventory budget.

B.

Budgeted statement of profit or loss.

C.

Cash flow budget.

D.

Sales budget.

E.

Administration overhead budget.

F.

Budgeted statement of financial position.

Questions 84

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.)

Options:
A.

The actual fixed production overheads.

B.

The closing inventory.

C.

The opening inventory.

D.

The under or over absorbed fixed production overheads.

E.

The fixed production overhead absorption rate.

Questions 85

The concept of the time value of money:

Options:
A.

recognises the fact that a cash flow received today will always be worth more than a larger cash flow received in the future.

B.

is used for making short term decisions.

C.

determines the higher interest rates that must be paid on longer term loans.

D.

recognises the fact that earlier cash flows are worth more because they can be reinvested.

Questions 86

Which of the following statements regarding variances is valid?

Options:
A.

Using higher quality material than standard could explain an adverse labour efficiency variance.

B.

Improved maintenance of production machinery could explain an adverse material usage variance.

C.

An adverse labour rate variance could explain a favourable labour efficiency variance.

D.

Poor supervision could explain a favourable labour rate variance.

Questions 87

A company produces a single product for which the following cost data are available.

BA2 Question 87

Analysis by the management accountant has shown that 100% of direct material cost and 50% of direct labour cost are variable costs. 50% of production overhead and 100% of selling and distribution overhead are variable costs.

What is the marginal cost per unit?

Options:
A.

$6

B.

$7

C.

$8

D.

$9

Questions 88

Every month for the last three years, a company has recorded the number of new customers for that month. The data have been summarised and grouped as follows:

BA2 Question 88

What is the arithmetic mean of the number of new customers per month?

Options:
A.

6.22

B.

6.50

C.

6.38

D.

8.50

Questions 89

Which of the following would NOT require taking into account the time value of money?

Options:
A.

Deciding to make a long-term investment in a project on the basis of its payback period.

B.

Selecting an investment project on the basis that it has a positive net present value (NPV).

C.

Calculating the present value of a five-year annuity.

D.

Taking a long-term investment decision on the basis of the project’s internal rate of return (IRR).

Questions 90

Which type of budget would be the most suitable for a cash budget?

Options:
A.

Fixed budget

B.

Rolling budget

C.

Incremental budget

D.

Flexible budget

Exam Code: BA2
Certification Provider: CIMA
Exam Name: Fundamentals of management accounting
Last Update: Jul 10, 2025
Questions: 392

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