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CIMA Fundamentals of management accounting Sample Questions:

1. Which of the following is the LEAST appropriate basis on which to apportion the insurance costs of plant and machinery:

A) Machine hours
B) Original cost
C) Net book value
D) Replacement cost

2. Which of these descriptions most accurately describes a cost centre?

A) A cost centre is a location where all costs across the company are consolidated into one account.
B) A cost centre is an office where costs for a specific activity are stored.
C) A cost centre is a location where all costs relating to certain activities and functions are stored.

3. A company operates a full cost system of pricing. Production overheads are absorbed using a pre-determined absorption rate of £3.50 per machine hour. The direct production cost of product A is £15 per unit and it utilises 6 machine hours per unit. The mark-up for non-production costs is 10% of total production cost. The company wants to make a 25% return on sales revenue for all products.
The required selling price for Product A, to two decimal places, is:

4. Refer to the exhibit.

The following standard cost information relates to the production department of BE Ltd.
The actual data for the month of March was as follows:

What is the direct labour efficiency variance (to the nearest whole number)?

A) £6,250 favourable
B) £6,406 favourable
C) £6,250 adverse
D) £6,406 adverse

5. 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

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