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CIMA Fundamentals of management accounting Sample Questions:

1. The master budget is:

A) A consolidation of all subsidiary budgets
B) The budget for the principal budget factor
C) The income statement
D) The cash budget

2. A company's cash budgetary plans show that there will be surplus cash for three months of the forthcoming year.
Which THREE of the following would be appropriate management actions in this situation?

A) Invest in a short-term deposit account
B) Reduce the finished goods inventory to save storage costs
C) Purchase new non-current assets to increase efficiency
D) Repay a long-term loan to reduce interest costs
E) Pay suppliers early to obtain prompt payment discounts
F) Offer a longer credit period to new customers to boost sales

3. 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.

4. A product sells for £10 per unit and has an annual break-even volume of 50,000 units. The annual fixed costs are £100,000.
The variable cost per unit is:
Give your answer to 2 decimal places.

5. Which of the following statements about batch costing is true?

A) The cost of a unit is found by dividing the cost of a batch by the number of units in the batch.
B) The cost of a batch is found by multiplying the cost of one unit by the number of units in the batch.
C) Batch costing must use absorption costing.
D) Batch costing must use marginal costing.

Solutions: