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CIMA BA2 Exam Questions
Fundamentals of Management Accounting (Page 3 )

Updated On: 15-Feb-2026
Page 3 of 80
PDF with 392 Questions

The materials price variance will be adverse when:

  1. The actual cost of the materials is more than the standard material cost for the output produced
  2. The actual cost of the materials purchased is more than the standard cost of the materials purchased
  3. The materials usage variance is favourable
  4. The price of materials has fallen

Answer(s): B



CORRECT TEXT

CVP Limited manufactures a single product with a selling price of $25.60. Fixed costs are $122,880 per month and the product has a profit/volume ratio of 40%.
In a month when actual sales were $358,400, CVP's margin of safety in units was

  1. 1996

Answer(s): A



A company operates an absorption costing system. Overheads are absorbed using a pre- determined absorption rate using labour hours. In the period actual labour hours were 10,600, 400 hours below budget. Actual overheads for the period were £234,680 and there was an under-absorption of overheads of £1,480.

What was the budgeted level of overheads?

  1. £242,000
  2. £233,200
  3. £245,072
  4. £224,720

Answer(s): A



The net present value (NPV) of an investment is as follows.

NPV at 14% = $6,320

NPV at 18% = ($4,600) negative

The internal rate of return (IRR) of the investment is closest to

  1. 14.6%
  2. 16.0%
  3. 16.3%
  4. 20.3%

Answer(s): C



Refer to the Exhibit.



AM Ltd. makes and sells a single product for which the standard cost information is as follows:

Budgeted production for the period is 30000 units. The actual results for the period were as follows:



What is the variable overhead expenditure variance?

  1. 13,161 adverse
  2. 13,161 favourable
  3. 13,600 adverse
  4. 13,600 favourable

Answer(s): D






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