CIMAPRO17-BA2-X1-ENG Online Practice Questions and Answers

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The records of a manufacturing company show the following relationship between total cost and output.

The budgeted output for Period 3 is 27,000 units. Assume that previous cost behaviour patterns will continue.

What is the total budgeted cost for Period 3?

Give your answer in the nearest whole number.

A. 431000

The staffing policy for a supermarket is to have one cashier station open for every forecasted 20 customers per hour. Cashiers are hired by the hour as and when required, and do not perform any other duties. The cost of the cashiers in relation to the number of customers would be classified as which type of cost?

A. Stepped fixed cost

B. Variable cost

C. Semi-variable cost

D. Fixed cost

A company is considering investing $57,000 in a machine that will last for five years, after which time it will have no value. The machine will generate additional revenue of $190,000 each year. Annual running costs, including depreciation of $11,400 will amount to $168,400.

Assuming that all cash flows occur evenly, the payback period of the investment in the machine is closest to:

A. 2 years 8 months

B. 1 year 9 months

C. 1 year 7 months

D. 2 years 6 months

Which of the following is a valid definition of a cash budget?

A. A detailed budget of estimated cash inflows and outflows incorporating both revenue and capital items.

B. A detailed budget of estimated cash inflows only, incorporating receipts from cash sales as well as from credit customers.

C. A detailed budget of estimated cash inflows and outflows incorporating revenue items only.

D. A detailed budget of estimated cash outflows only, incorporating both depreciation and capital expenditure.

A new product requires an investment of $200,000 in machinery and working capital. The total sales volume over the product's life will be 5,000 units. The forecast costs per unit throughout the product's life are as follows:

The product is required to earn a return on investment of 35%. What unit selling price needs to be achieved?

A. $54.00

B. $50.77

C. $47.00

D. $44.55

The following is an extract from a budgetary control report for the latest period:

The budget variance for prime cost is:

A. $3,260 adverse

B. $18,580 adverse

C. $3,340 adverse

D. $3,260 favourable

The International Federation of Accountants (IFAC) stated that it was important that "accountants in business" should understand what the drivers of stakeholder value are. Which of the following statements is valid?

A. Anyone with an interest in an organisation can be considered to be one of its stakeholders.

B. Stakeholders must be external to the organisation.

C. Only an organisation's shareholders and employees can be considered to be its stakeholders.

D. Only an organisation's shareholders can be considered to be its stakeholders.

Every month for the last three years, a company has recorded the number of new customers for that month. The data have been summarised and grouped as follows:

What is the arithmetic mean of the number of new customers per month?

A. 6.22

B. 6.50

C. 6.38

D. 8.50

A management accountant has forecast the following cash inflows from four potential projects.

All four projects require the same initial investment and will last for four years. They all result in a positive net present value but only one of the projects can be undertaken. Which project should be selected?

A. Project A

B. Project B

C. Project C

D. Project D

An organisation produces and sells a single product. The organisation's management accountant has reported the following information for the most recent period.

Which TWO of the following statements are valid? (Choose two.)

A. If the contribution to sales ratio changed to 30%, the breakeven point would become higher.

B. If the fixed cost changed to $445,000, the breakeven point would not change.

C. If the sales volume changed to 220,000 units, the breakeven point would not change.

D. If the selling price changed to $22 per unit, the breakeven point would become lower.

E. If the variable cost changed to $16 per unit, the breakeven point would become lower.