CIMA BA2 Real Exam Questions and Answers FREE
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NEW QUESTION 214
Refer to the exhibit.
A company issued its production budget based on an anticipated output of 800 units. Actual output was 1000 units. The details of the costs are shown below:
The budget expenditure variance was:
- A. £5,000 favourable
- B. £5,000 adverse
- C. £1,000 favourable
- D. £3,000 adverse
Answer: C
NEW QUESTION 215
The production manager of your company has asked you to explain the methods of overhead analysis used, in particular the meaning of reciprocal servicing.
Reciprocal servicing is:
- A. where two or more service departments provide service to production departments but not to each other
- B. where only one service department exists which provides service to all production departments
- C. where two or more service departments provide service to production departments and to each other
- D. where one service department provides service to another and the second department reciprocates by not charging for its services
Answer: C
NEW QUESTION 216
In investment appraisal, the net present value (NPV) is
- A. The difference between the present value of the project's profit and the present value of the initial investment.
- B. The discount rate at which the project's cash inflows are equal to the cash outflows.
- C. The difference between the present value of the project's cash inflows and the present value of the cash outflows.
- D. The present value of the project's cash inflow.
Answer: C
NEW QUESTION 217
In an integrated accounting system, the accounting entries for over absorption of production overheads would be.
- A. Debit: Finished goods control accountCredit: Production overhead control account
- B. Debit: Finished Goods control accountCredit: Income statement
- C. Debit: Income statementCredit: Work in progress control account
- D. Debit: Production overhead control accountCredit: Income statement
Answer: D
NEW QUESTION 218
A company uses an integrated accounting system. The following data relate to the latest period.
At the end of the period, the entry in the production overhead control account in respect of under or over absorbed overheads will be:
- A. $2,208 credit.
- B. $22,672 credit.
- C. $22,672 debit.
- D. $2,208 debit.
Answer: C
NEW QUESTION 219
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:
Answer:
Explanation:
£52.85
NEW QUESTION 220
According to CIMA's Code of Ethics, CIMA members should not allow bias, conflict of interest or the influence of other people to override their professional judgments.
This is an example of:
- A. integrity.
- B. professional behaviour.
- C. objectivity.
- D. professional competence and due care.
Answer: C
NEW QUESTION 221
Eton Ltd. operates a manufacturing process that produces product A.
Information for this process last month is as follows:
(a) Opening work in progress - 2,500 kg valued at £2,000 for direct material and £1,500 for labour and overheads.
(b) Materials input - 25,000 kg at £2.10 per kg.
(c) Labour - £10,000
(d) Overheads - £5,000
(e) Output during the month - 20,000 kg.
(f) There were 7,500 units of closing work in progress which was complete as to materials and 30% complete as to conversion.
(g) Normal loss for the month was 3% of input and all losses have a scrap value of £1 per kg.
What was the average cost per kg of finished output during the month?
- A. £2.72
- B. £1.73
- C. £2.80
- D. £2.78
Answer: D
NEW QUESTION 222
Refer to the exhibit.
The following information is available for a production process:
The cost per unit of good output is:
Give your answer to 2 decimal places.
Answer:
Explanation:
£13.17
NEW QUESTION 223
It is company policy that the closing inventory of finished goods must be equal to 10% of the following month's budgeted sales. The budget sales for November and December are 8,000 and 9,000 units respectively.
The budgeted production for November will be:
- A. 1,700 units
- B. 8,100 units
- C. 8,900 units
- D. 900 units
Answer: B
NEW QUESTION 224
A company has three production departments X. Y and Z, and one service department The service department's overhead has been apportioned to the production departments in the ratio 32 5 As a result of this apportionment, S2,070 was given to Department Y.
What is the amount of service department overhead that would have been apportioned to Department Z? Give your answer to the nearest dollar.
Answer:
Explanation:
$5175
NEW QUESTION 225
Refer to the exhibit.
The output and costs for two periods were as follows:
Fixed costs will remain constant, but during Period 7, the variable cost per unit will increase by 25%. The output for Period 7 will be 1,600 units.
The budgeted total cost for period 7 will be:
Answer:
Explanation:
£43999
NEW QUESTION 226
Refer to the exhibit.
The prime cost of product 'Z' is as follows:
Overheads are absorbed at £4.00 per labor hour in Department 1 and £6.00 per labor hour in Department 2.
The production cost of Product Z, to the nearest £, will be:
Give your answer to 2 decimal places.
Answer:
Explanation:
£123.00
NEW QUESTION 227
Which ONE of the following is a characteristic of operational financial information?
- A. Provides information for long term decision making
- B. Provides detailed information focussed on one business area
- C. Provided infrequently and at irregular intervals
- D. Provided mainly to senior managers
Answer: B
NEW QUESTION 228
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. Fixed cost
- B. Stepped fixed cost
- C. Semi-variable cost
- D. Variable cost
Answer: C
Explanation:
Reference:
https://www.acowtancy.com/textbook/acca-ma/a3-cost-classification/a3g-types-of-cost-behaviour/notes
NEW QUESTION 229
The forecast per unit for a new product are as follows:
The company uses margin cost plus pricing and all products are required to achieve a 40% margin.
What would be the selling price per unit?
- A. $55.00
- B. $37.80
- C. $45.00
- D. $46.20
Answer: A
NEW QUESTION 230
In an integrated cost and financial accounting system, the accounting entries for PAYE deducted from gross wages would be:
- A. Debit: Wages control account Credit: PAYE payable account
- B. Debit: Wages control account Credit: Bank account
- C. Debit: Production overhead control account Credit: Bank account
- D. Debit: PAYE payable account Credit: Bank account
Answer: A
NEW QUESTION 231
Refer to the Exhibit.
Fabex Ltd manufactures a household detergent called "Clear". The standard data for one of the chemicals used in production (chemical XTC) is as follows:
(a) 50 litres used per 100 litres of 'Clear' produced
(b) Budgeted monthly production is 1000 litres of 'Clear'.
The closing inventory of chemical XTC for November valued at standard price was as follows:
Actual results for the period during December were as follows:
(a) 500 litres of chemical XTC was purchased for £1300.
(b) 550 litres of chemical XTC was used.
(c) 900 litres of 'Clear' was produced.
It is company policy to extract the material price variance at the time of purchase.
What is the total direct material price variance (to the nearest whole number)?
- A. £55 adverse
- B. £55 favourable
- C. £50 adverse
- D. £50 favourable
Answer: C
NEW QUESTION 232
A company is appraising two projects. Both projects are for five years. Details of the two projects are as follows.
Based on the above information, which of the following statements is correct?
- A. The annuity factor for project A would be lower than the annuity factor for project B.
- B. An annuity could be used to calculate the net present value of the projects.
- C. A perpetuity could be used to calculate the net present value of the projects.
- D. The annuity factor for project A would be double the annuity factor for project B.
Answer: B
NEW QUESTION 233
A company is considering investing $57,000 in a machine that will last for five years, after which time it will have no value. The machine will generate additional revenue of $190,000 each year. Annual running costs, including depreciation of $11,400, will amount to $168;400. Assuming that all cash flows occur evenly, the payback period of the investment in the machine is closest to:
- A. 1 year 7 months
- B. 1 year 9 months
- C. 2 years 8 months
- D. 2 years 6 months
Answer: A
NEW QUESTION 234
The possible returns and associated probabilities of two independent projects are as follows:
It has been decided that both projects are to be launched. Which TWO of the following statements are correct?
- A. The expected value of the total return is $40,000 gain
- B. The probability of making a total return of exactly $5T000 gain is 0.02.
- C. The probability of the total return being a loss is 0.10.
- D. The expected value of the total return is $41,500 gain.
- E. The probability of the total return being a gain is less than 1.00.
Answer: D,E
NEW QUESTION 235
Refer to the exhibit.
SP, a manufacturing company, uses a standard costing system. The standard variable production overhead cost is based on the following budgeted figures for the year:
During the month of September, 5,300 actual hours were worked and 5,600 standard hours of output were produced. Total variable production overhead costs in September were $8,600.
What was the variable production overhead expenditure variance in September?
- A. $200 favourable
- B. $200 adverse
- C. $650 adverse
- D. $650 favourable
Answer: C
NEW QUESTION 236
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 purchases budget for the month of August is:
- A. 496,000 kg
- B. 512,000 kg
- C. 722,000 kg
- D. 516,000 kg
Answer: A
NEW QUESTION 237
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