Practice Test Geeks(CIMA) Certified Investment Management Analyst Practice Test
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Management Accounting Flashcards

7 cards from real CIMA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Management Accounting flashcards as text

  1. A company uses activity-based costing (ABC). Which cost driver would most appropriately be used for the 'machine setup' activity pool?

    Answer: Number of production runs

    Number of production runs is the most appropriate driver for machine setup costs because each run requires a setup regardless of batch size.

  2. When using marginal costing, which of the following costs is included in the product cost?

    Answer: Variable manufacturing overhead

    Marginal costing includes only variable manufacturing costs (direct materials, direct labor, variable overhead) in product cost; fixed costs are period costs.

  3. A firm's contribution margin ratio is 40% and fixed costs are $200,000. What is the breakeven sales revenue?

    Answer: $500,000

    Breakeven sales = Fixed costs ÷ Contribution margin ratio = $200,000 ÷ 0.40 = $500,000.

  4. In a standard costing system, a favorable material usage variance means:

    Answer: Standard quantity allowed exceeded actual material used

    A favorable material usage variance occurs when actual quantity used is less than the standard quantity allowed for actual output.

  5. Which of the following is a characteristic of a cost center?

    Answer: It is accountable only for costs incurred

    A cost center manager is responsible only for controlling costs; revenue and investment decisions are outside their scope.

  6. Transfer pricing between divisions is primarily used to:

    Answer: Measure divisional performance and motivate managers

    Transfer prices enable measurement of divisional profit performance and incentivize managers to act in the company's best interest.

  7. A company produces two products using a single bottleneck resource. According to throughput accounting, which product should be prioritized?

    Answer: The product with the highest throughput per unit of bottleneck resource

    Throughput accounting ranks products by throughput (sales minus direct materials) per unit of the bottleneck resource to maximize overall throughput.