Certified Management Accountant Cost Management 5

Question 1

The variable overhead spending variance measures:

Accepted Answer

The difference between actual variable OH rate and standard rate, applied to actual hours worked

Answer

Variable OH spending variance = (Actual rate − Standard rate) × Actual hours, reflecting price-level differences.

Question 2

A company's actual fixed overhead is $180,000, budgeted fixed overhead is $175,000, and applied fixed overhead is $168,000. The fixed overhead volume variance is:

Accepted Answer

$7,000 unfavorable

Answer

Fixed OH volume variance = Budgeted fixed OH − Applied fixed OH = $175,000 − $168,000 = $7,000 unfavorable.

Question 3

Which of the following best describes throughput costing?

Accepted Answer

Only direct materials are treated as product costs; all other costs are period costs

Answer

Throughput costing (super-variable costing) treats only direct materials as product costs; everything else is a period cost.

Question 4

A company is deciding whether to make or buy a component. The relevant costs to 'make' include all of the following EXCEPT:

Accepted Answer

Allocated corporate overhead that will not change if production ceases

Answer

Allocated overhead that does not change with the decision is a sunk/unavoidable cost and is irrelevant.

Question 5

In lean manufacturing environments, which cost management tool is primarily used to reduce waste and improve value delivery?

Accepted Answer

Value stream mapping to identify and eliminate non-value-added activities

Answer

Value stream mapping visualizes the entire production flow to identify and eliminate non-value-added (waste) steps.

Certified Management Accountant Practice Test

Certified Management Accountant Practice Test

Certified Management Accountant Cost Management 5