CPA MA - Management Accounting Exam
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Total 80 questions
Question #6 (Topic: )
Hera Co is developing a new product using a target costing approach. The initial
assumption was that a sales volume of 200,000 units could be achieved at a selling price of
$25 per unit.
However, market research indicates that to achieve the sales volume of 200,000 units, the
selling price should be $2350.
Hera wishes to obtain an average profit margin of 20% on sales.
The following data have been estimated for the product:
Direct material$1045 per unit
Hourly production volume20 units
Directlaborcost$64 per hour
Variable overheads$82 per hour (absorbed on a directlaborhour basis)
Fixed costs to produce 200,000 units are estimated to be $680,000.
What reduction in the cost per unit is required in order to achieve the target cost per unit?
assumption was that a sales volume of 200,000 units could be achieved at a selling price of
$25 per unit.
However, market research indicates that to achieve the sales volume of 200,000 units, the
selling price should be $2350.
Hera wishes to obtain an average profit margin of 20% on sales.
The following data have been estimated for the product:
Direct material$1045 per unit
Hourly production volume20 units
Directlaborcost$64 per hour
Variable overheads$82 per hour (absorbed on a directlaborhour basis)
Fixed costs to produce 200,000 units are estimated to be $680,000.
What reduction in the cost per unit is required in order to achieve the target cost per unit?
A. $0.38
B. $1.15
C. $1.88
D. $2.35
Answer: D
Question #7 (Topic: )
The sales budget of Cambri Co includes the following sales volumes for one of the
companys products:
July150,900 units
August144,800 units
September164,800 units
The sales director estimates that 10% of customers will pay in the month of sale, with 70%
paying in the following month. The remaining customers will take a further months credit.
All sales will be at $5.50 per unit, with customers paying in the month of sale obtaining a
10% settlement discount.
What is the budgeted value of cash received from customers in September for sales of this
product?
companys products:
July150,900 units
August144,800 units
September164,800 units
The sales director estimates that 10% of customers will pay in the month of sale, with 70%
paying in the following month. The remaining customers will take a further months credit.
All sales will be at $5.50 per unit, with customers paying in the month of sale obtaining a
10% settlement discount.
What is the budgeted value of cash received from customers in September for sales of this
product?
A. $758,362
B. $749,298
C. $805,046
D. $814,110
Answer: C
Question #8 (Topic: )
The marketing director of Peek Co has suggested that, despite an anticipated increase in
variable cost per unit of $2, the selling price of the product manufactured by one of the
divisions should be reduced by 3% to increase sales volume. The product is currently sold
for $110 per unit which generates a contribution/sales ratio of 32%. Fixed costs for the next
year are estimated to be $1,250,000.
What will be the breakeven sales volume in the next year (to the nearest unit)?
variable cost per unit of $2, the selling price of the product manufactured by one of the
divisions should be reduced by 3% to increase sales volume. The product is currently sold
for $110 per unit which generates a contribution/sales ratio of 32%. Fixed costs for the next
year are estimated to be $1,250,000.
What will be the breakeven sales volume in the next year (to the nearest unit)?
A. 41,806
B. 35,511
C. 39,062
D. 40,323
Answer: A
Question #9 (Topic: )
Hyginus Co depreciates plant at a rate of 25% per annum on the reducing balance basis.
On 1 November 2011 a new machine was acquired. The invoice included the following
items:
Machine$105,000
Installation$25,000
Testing$5,000
Maintenance for 12 months to 31 October 2012$6,000
What total charge should be made against profit for the year to 31 October 2012 in respect
of the machine?
On 1 November 2011 a new machine was acquired. The invoice included the following
items:
Machine$105,000
Installation$25,000
Testing$5,000
Maintenance for 12 months to 31 October 2012$6,000
What total charge should be made against profit for the year to 31 October 2012 in respect
of the machine?
A. $35,250
B. $62,250
C. $33,750
D. $39,750
Answer: D
Question #10 (Topic: )
As a result of completing a transaction, Deyal Co will receive an economic benefit in the
future.
Which of the following items of financial statements should now berecognized?
future.
Which of the following items of financial statements should now berecognized?
A. Income
B. Equity
C. Asset
D. Liability
Answer: C
