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CIMA Fundamentals of management accounting Sample Questions:

1. Which of the following is NOT a valid purpose of budgeting?

A) To communicate targets to managers.
B) To coordinate the different activities of an organisation.
C) To authorise managers to incur expenditure.
D) To comply with financial reporting requirements.

2. RJD Ltd is preparing the production cost budget for the forthcoming year and has found that there is a linear relationship between production volume and production costs.
They have found that a production volume of 1,600 units corresponds to production costs of £40000 and that a production volume of 3,200 units corresponds to production costs of £48,000.
What would be the production costs for a production volume of 4,000 units?

A) £52000
B) £60,000
C) £120,000
D) £100,000

3. The following costs are incurred by a company which owns a five star hotel. Which THREE of the items would normally be classified as variable costs?

A) Restaurant Manager's salary
B) Depreciation on gym equipment
C) Outside laundry service
D) Food
E) Advertising
F) Beverages

4. The staffing policy for a supermarket is to have one cashier station open for every forecasted 20 customers per hour. Cashiers are hired by the hour as and when required, and do not perform any other duties.
The cost of the cashiers in relation to the number of customers would be classified as which type of cost?

A) Semi-variable cost
B) Stepped fixed cost
C) Variable cost
D) Fixed cost

5. Refer to the exhibit.

The budget for product Sentra for the month of August is given below:
Each unit of Sentra requires 4kg of raw materials.
The raw materials usage budget for the month of August is:

A) 504,000 kg
B) 492,000 kg
C) 496,000 kg
D) 516,000 kg

Solutions: