CIMA Management Accounting 2

Question 1

A company uses activity-based costing (ABC). Which cost driver would most appropriately be used for the 'machine setup' activity pool?

Accepted Answer

Number of production runs

Answer

Number of production runs is the most appropriate driver for machine setup costs because each run requires a setup regardless of batch size.

Question 2

When using marginal costing, which of the following costs is included in the product cost?

Accepted Answer

Variable manufacturing overhead

Answer

Marginal costing includes only variable manufacturing costs (direct materials, direct labor, variable overhead) in product cost; fixed costs are period costs.

Question 3

A firm's contribution margin ratio is 40% and fixed costs are $200,000. What is the breakeven sales revenue?

Accepted Answer

$500,000

Answer

Breakeven sales = Fixed costs ÷ Contribution margin ratio = $200,000 ÷ 0.40 = $500,000.

Question 4

In a standard costing system, a favorable material usage variance means:

Accepted Answer

Standard quantity allowed exceeded actual material used

Answer

A favorable material usage variance occurs when actual quantity used is less than the standard quantity allowed for actual output.

Question 5

Which of the following is a characteristic of a cost center?

Accepted Answer

It is accountable only for costs incurred

Answer

A cost center manager is responsible only for controlling costs; revenue and investment decisions are outside their scope.

CIMA - Chartered Institute of Management Accountants Aptitude Test Practice Test

CIMA - Chartered Institute of Management Accountants Aptitude Test Practice Test

CIMA Management Accounting 2