CIMA CIMAPRA17-BA2-1 BA2 - Fundamentals of Management Accounting Exam Exam Practice Test Questions

• Question 1

  A fixed budget is:

  • A budget for fixed overheads
  • A budget which shows costs and revenues at different levels of activity
  • A budget which shows costs and revenues for a single level of activity
  • A budget prepared on a continuous basis

  Show Answer Answer: C Next

• Question 2

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

  • To communicate targets to managers.
  • To comply with financial reporting requirements.
  • To coordinate the different activities of an organisation.
  • To authorise managers to incur expenditure.

  Show Answer Answer: D Next

• Question 3

  A company currently allows a discount of 20% to customers who pay at the time of purchase. If 30% of customers pay immediately, the extra sales needed in July to increase the cash receipts in that month by £6,000 are:

  • £7500
  • £20000
  • £25000
  • £30000

  Show Answer Answer: C Next

• Question 4

  The unit data for a product are:

  • Selling price £12
  • Variable cost £6.If selling prices are reduced by 10% and variable costs are increased by 12.5%, which of the following is the revised profit/volume ratio?
  • 0.375
  • 0.5
  • 0.4875
  • 0.542

  Show Answer Answer: A Next

• Question 5

  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

  • Selling and distribution expenses
  • Administration expense
  • Direct expense
  • Production overhead

  Show Answer Answer: C Next