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| Section | Weight | Objectives |
|---|---|---|
| Planning and Control | 30% | - Performance measurement and reporting - Budgeting methods and techniques - Standard costing and variance analysis - Budgeting concepts and preparation |
| Decision Making | 35% | - Risk and uncertainty analysis - Cost-volume-profit analysis - Pricing decisions - Investment appraisal techniques - Relevant costing for short-term decisions |
| The Context of Management Accounting | 10% | - Characteristics of useful financial information - Role and purpose of management accounting - Global Management Accounting Principles - Role of CIMA and professional ethics |
| Costing | 25% | - Cost estimation techniques - Job, batch, process and service costing - Marginal and absorption costing - Cost classification and behaviour - Overhead allocation, apportionment and absorption |
1. 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?
A) £233,200
B) £242,000
C) £245,072
D) £224,720
2. Refer to the exhibit.
The following costs apply to batch 325, which consists of 10000 units of identical products:
The company charges selling and administration costs at a rate of 20% of production costs and wishes to achieve a profit margin of 20% of sales.
What is the required selling price per unit of product?
Give your answer to 2 decimal places.
3. Refer to the exhibit.
The budgeted contribution for last month was $53,600. The variances reported were as follows:
The actual contribution for last month was:
4. The managing director of a small expanding company has asked you to discuss the positioning of management accounting within his organization.
Which of the following would you suggest is an advantage of the management accountant taking on a business partnering role within the organization?
(i) It is easier for the management accountant to remain objective in decision making situations (ii) The management accountant is an integral part of the business (iii) It is easier to build strong relationships between the managers and the management accountant
A) (i), (ii) and (iii)
B) (i) and (ii)
C) (ii) and (iii)
D) (i) only
5. Which THREE of the following are parts of the master budget? (Choose three.)
A) Budgeted statement of profit or loss.
B) Sales budget.
C) Administration overhead budget.
D) Finished goods inventory budget.
E) Budgeted statement of financial position.
F) Cash flow budget.
Solutions:
| Question # 1 Answer: B | Question # 2 Answer: Only visible for members | Question # 3 Answer: Only visible for members | Question # 4 Answer: C | Question # 5 Answer: A,E,F |
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