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

1. FILL BLANK
A company uses full cost pricing. The unit costs for product Z are given below.

What price per unit should be charged in order to achieve a profit margin of 20%?
Give your answer to the nearest cent.

2. Which of the following is a relevant cost?

A) A sunk cost
B) An incremental cost
C) A historical cost
D) A committed cost

3. 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) 9,000
B) 32,000
C) 8,000
D) 36,000

4. Assume that a unit of output is the cost object. Which of the following statements is valid?

A) Rent paid for a factory in which several different products are produced is an example of an indirect expense.
B) Materials consumed in the maintenance of machinery used to manufacture several different products are an example of a direct material cost.
C) Royalties paid on per unit basis are an example of an indirect expense.
D) The salaries of supervisors who oversee the manufacture of several different products are an example of a direct labour cost.

5. A company has spent $5,000 on a report into the viability of using a subcontractor. The report highlighted the following:
A machine purchased six years ago for $30,000 would become surplus to requirements. It has a written- down value of $10,000 but would be resold for $12,000.
A machine operator would be made redundant and would receive a redundancy payment of $40,000.
The administration of the subcontractor arrangement would cost the company $25,000 each year.
Which THREE of the following are relevant for the decision? (Choose three.)

A) A relevant revenue of $12,000 for the machine.
B) A relevant cost of $30,000 for the machine.
C) A relevant cost of $40,000 for the redundancy payment.
D) A relevant cost of $5,000 for the viability report.
E) A relevant cost of $25,000 each year for administration.
F) A relevant cost of $10,000 for the machine.

Solutions: