CNA CNA Managerial Accounting

Question 1

Which budgeting approach requires managers to justify all expenditures from scratch each period rather than basing budgets on prior-year figures?

Accepted Answer

Zero-based budgeting

Answer

Zero-based budgeting requires every expense to be justified anew each budget cycle, ignoring historical spending levels.

Question 2

A company's contribution margin is calculated as:

Accepted Answer

Sales revenue minus variable costs

Answer

Contribution margin equals sales revenue minus variable costs, representing the amount available to cover fixed costs and generate profit.

Question 3

Which variance measures the difference between standard labor hours allowed for actual output and actual labor hours worked?

Accepted Answer

Labor efficiency variance

Answer

Labor efficiency variance compares standard hours allowed for actual production to actual hours worked, multiplied by the standard rate.

Question 4

The break-even point in units is calculated by dividing fixed costs by:

Accepted Answer

Contribution margin per unit

Answer

Break-even units = Fixed Costs ÷ Contribution Margin per Unit, where contribution margin is selling price minus variable cost.

Question 5

Absorption costing differs from variable costing primarily because absorption costing:

Accepted Answer

Includes fixed manufacturing overhead in product cost

Answer

Absorption costing includes fixed manufacturing overhead in unit product cost, while variable costing treats it as a period expense.

CNA Practice Test