CPA Management Accounting & Strategy 2

Question 1

Which costing method allocates overhead using multiple cost drivers to better reflect cause-and-effect relationships?

Accepted Answer

Activity-based costing

Answer

Activity-based costing (ABC) uses multiple cost drivers tied to specific activities, improving overhead allocation accuracy.

Question 2

A company has fixed costs of $200,000, a selling price of $50, and variable cost per unit of $30. What is the break-even point in units?

Accepted Answer

10,000 units

Answer

Break-even = Fixed costs / Contribution margin per unit = $200,000 / ($50 - $30) = 10,000 units.

Question 3

The balanced scorecard's 'learning and growth' perspective focuses primarily on:

Accepted Answer

Employee skills and organizational capability

Answer

The learning and growth perspective addresses human capital, information capital, and organizational capital that enable strategy execution.

Question 4

When a company uses the theory of constraints (TOC), the primary goal is to:

Accepted Answer

Maximize throughput while managing inventory and operating expense

Answer

TOC focuses on maximizing throughput (sales minus truly variable costs) while controlling inventory and operating expenses.

Question 5

A strategic business unit (SBU) with high market share in a slow-growth industry is classified in the BCG matrix as a:

Accepted Answer

Cash cow

Answer

Cash cows have high relative market share in low-growth markets, generating excess cash with minimal investment needed.

(CPA) Certified Practicing Accountant Practice Test