Management Accounting..key important points

 Here are key points for ACCA F2/US CMA Management Accounting topics:

A. The Nature, Source, and Purpose of Management Information

- *Management Information*: Data for planning, control, and decision-making

- *Sources*: Internal (accounting, production) and external (market research)

- *Purpose*: Support decision-making, planning, and control

B. Data Analysis and Interpretation

- *Data Types*: Quantitative and qualitative

- *Analysis Techniques*: Ratio analysis, trend analysis, variance analysis

- *Interpretation*: Identifying trends, patterns, and anomalies

C. Costing Methods and Systems

- *Cost Classification*: Fixed, variable, direct, indirect

- *Costing Methods*: Job costing, process costing, marginal costing

- *Systems*: Standard costing, budgetary control

D. Budgeting and Forecasting

- *Budgeting*: Planning and controlling financial resources

- *Types*: Sales, production, cash budgets

- *Forecasting*: Techniques like moving averages, regression

E. Decision Making Techniques

- *Cost-Volume-Profit (CVP) Analysis*: Break-even analysis, margin of safety

- *Decision Making*: Relevant costs, limiting factors, make-or-buy decisions

F. Standard Costing and Variance Analysis

- *Standard Costing*: Setting standards, calculating variances

- *Variance Analysis*: Identifying causes, investigating variances

G. Performance Measurement and Control

- *Performance Measures*: Financial (profit, ROI) and non-financial (customer satisfaction)

- *Control*: Monitoring, reporting, and corrective action

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Here are 50 ACCA F2 (Management Accounting) Exam-Level MCQs with small caselets . These reflect the scenario-based style used in the ACCA MA (F2) ,US CMA computer-based exam.

ACCA F2 – 50 Exam Level MCQs (Caselet Based)

Section 1 – Cost Classification

1

A manufacturing company produces wooden tables. During the month, the company paid ₹80,000 for wood used directly in production and ₹20,000 for factory electricity.

Which of the following represents direct cost?

A. Factory electricity

B. Wood used in production

C. Factory supervisor salary

D. Machine depreciation

Answer: 

2

A factory rent of ₹120,000 per year remains constant regardless of production levels.

This cost is:

A. Variable cost

B. Fixed cost

C. Semi-variable cost

D. Direct cost

Answer: 

3

A company pays a salesperson a salary of ₹10,000 plus ₹5 per unit sold.

This cost is:

A. Fixed cost

B. Variable cost

C. Semi-variable cost

D. Step cost

Answer: 

4

A factory supervisor oversees production of multiple products and cannot trace their salary to a specific product.

The supervisor salary is:

A. Direct cost

B. Indirect cost

C. Variable cost

D. Prime cost

Answer: 

5

A company produces chairs. Wood costs ₹300 per chair and wages are ₹150 per chair.

What is the prime cost per chair?

A. ₹300

B. ₹150

C. ₹450

D. ₹600

Answer: 

Section 2 – Absorption Costing

6

Budgeted overhead =?

Budgeted machine hours =?

What is the overhead absorption rate per machine hour?

A. ₹2

B. ₹5

C. ₹10

D. ₹20

Answer

7

A product requires 3 machine hours.

OAR = ₹5 per machine hour.

Overhead absorbed per unit = ?

A. ₹5

B. ₹10

C. ₹15

D. ₹20

Answer: 

8

Actual overhead = ₹210,000

Overhead absorbed = ₹200,000

This represents:

A. Over-absorption

B. Under-absorption

C. No variance

D. Fixed variance

Answer: 

9

Which cost is included in absorption costing but excluded in marginal costing?

A. Direct labour

B. Variable overhead

C. Fixed production overhead

D. Direct material

Answer: 

10

Which costing method values inventory higher when production exceeds sales?

A. Marginal costing

B. Absorption costing

C. Standard costing

D. Job costing

Answer: 

Section 3 – Marginal Costing

11

A product sells for ₹80. Variable cost is ₹50.

Contribution per unit = ?

A. ₹20

B. ₹30

C. ₹40

D. ₹50

Answer: 

12

Fixed costs = ₹120,000

Contribution per unit = ₹30

Break-even units = ?

A. 3,000

B. 4,000

C. 5,000

D. 6,000

Answer: 

13

Sales = ₹400,000

Contribution = ₹160,000

Contribution ratio = ?

A. 20%

B. 30%

C. 40%

D. 50%

Answer: 

14

Break-even sales = ₹300,000

Actual sales = ₹420,000

Margin of Safety = ?

A. ₹120,000

B. ₹300,000

C. ₹420,000

D. ₹720,000

Answer: 

15

Contribution = ₹200,000

Fixed cost = ₹150,000

Profit = ?

A. ₹50,000

B. ₹150,000

C. ₹200,000

D. ₹350,000

Answer: 

Section 4 – Budgeting

16

A company plans to sell 10,000 units next month. Opening inventory is 2,000 units and desired closing inventory is 3,000 units

Production budget units = ?

A. 9,000

B. 10,000

C. 11,000

D ,12,000

17

Which budget is prepared first?

A. Cash budget

B. Production budget

C. Sales budget

D. Labour budget

Answer: 

18

Which budget focuses on expected cash inflows and outflows?

A. Sales budget

B. Cash budget

C. Production budget

D. Materials budget

Answer: 

19

Flexible budgets are prepared for:

A. One level of activity

B. Multiple activity levels

C. Past performance

D. Capital investment

Answer: 

20

Budgetary control helps management to:

A. Eliminate costs

B. Compare actual vs planned results

C. Avoid planning

D. Reduce production

Answer: 

Section 5 – Standard Costing

Standard cost is:

A. Actual cost

B. Predetermined cost

C. Estimated selling price

D. Historical cost

Answer:

22

Standard costing mainly helps in:

A. Tax calculation

B. Variance analysis

C. Inventory valuation only

D. Marketing planning

Answer: 

23

Material price variance occurs due to:

A. Wage increase

B. Change in material price

C. Labour efficiency

D. Machine breakdown

Answer:

24

Material usage variance measures:

A. Efficiency of material usage

B. Labour efficiency

C. Sales performance

D. Machine hours

Answer: 

25

Labour rate variance arises when:

A. Workers use extra time

B. Actual wage rate differs from standard

C. Machine failure occurs

D. Materials increase

Answer: 

Section 6 – Variance Calculations

26

Standard price = ₹10

Actual price = ₹12

Actual quantity = 1,000 units

Material price variance = ?

A. ₹2,000 A

B. ₹2,000 F

C. ₹10,000 A

D. ₹10,000 F

Answer: 

27

Standard hours = 500

Actual hours = 550

Standard rate = ₹20

Labour efficiency variance =

A. ₹1,000 A

B. ₹1,000 F

C. ₹10,000 A

D. ₹10,000 F

Answer: 

28

A favourable variance means:

A. Cost is higher than expected

B. Cost is lower than expected

C. Sales are lower

D. Profit is lower

Answer: 

29

An adverse variance indicates:

A. Better performance

B. Worse performance

C. No difference

D. No cost change

Answer: 

30

Variance analysis is used for:

A. Financial reporting

B. Cost control

C. Marketing decisions

D. Advertising

Answer

Section 7 – Inventory Management

31

EOQ helps minimize:

A. Production cost

B. Ordering and holding cost

C. Marketing cost

D. Labour cost

Answer: 

32

If ordering cost increases, EOQ will:

A. Increase

B. Decrease

C. Remain same

D. Become zero

Answer:

33

Reorder level ensures:

A. Zero inventory

B. Continuous production

C. No storage cost

D. No purchasing

Answer: 

34

FIFO assumes:

A. Latest items sold first

B. Oldest inventory sold first

C. Average cost used

D. Random issue

Answer: 

35

Weighted average method calculates:

A. Average unit cost of inventory

B. Highest cost

C. Lowest cost

D. Selling price

Answer: 

Section 8 – Decision Making

36

Relevant costs are:

A. Past costs

B. Future incremental costs

C. Sunk costs

D. Historical costs

Answer: 

37

Sunk costs are:

A. Future costs

B. Costs already incurred

C. Variable costs

D. Relevant costs

Answer: 

38

A company has limited machine hours. Decision should be based on:

A. Selling price per unit

B. Contribution per unit

C. Contribution per limiting factor

D. Total revenue

Answer: 

39

A make-or-buy decision compares:

A. Selling price vs cost

B. Internal production cost vs purchase price

C. Profit vs revenue

D. Labour vs material

Answer: 

40

A product with highest contribution per limiting factor should be:

A. Discontinued

B. Produced first

C. Outsourced

D. Ignored

Answer: 

Section 9 – Performance Measurement

41

Return on Investment (ROI) measures:

A. Profitability of investment

B. Sales growth

C. Market share

D. Customer satisfaction

Answer: 

42

Non-financial performance measures include:

A. Profit

B. ROI

C. Customer satisfaction

D. Contribution

Answer: 

43

Performance measurement helps managers:

A. Evaluate efficiency

B. Increase taxes

C. Reduce production

D. Avoid planning

Answer: 

44

Balanced performance requires:

A. Only financial measures

B. Only non-financial measures

C. Both financial and non-financial measures

D. No measurement

Answer: 

45

Key performance indicators (KPIs) are used to:

A. Monitor performance

B. Reduce sales

C. Avoid costs

D. Increase inventory

Answer:

Section 10 – Mixed Topics

46

Which cost remains constant per unit?

A. Fixed cost

B. Variable cost

C. Semi-variable cost

D. Step cost

Answer: 

47

Which cost remains constant in total?

A. Variable cost

B. Fixed cost

C. Direct cost

D. Prime cost

Answer: 

48

Contribution helps cover:

A. Variable costs

B. Fixed costs and profit

C. Direct materials only

D. Labour only

Answer: 

49

If selling price increases while costs remain constant:

Contribution will:

A. Decrease

B. Increase

C. Stay same

D. Become zero

Answer: 

50

Management accounting information is mainly used by:

A. External investors

B. Government regulators

C. Internal managers

D. Tax authorities

Answer: 

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Checklist for Cost Accounting Management accounting

 Checklist for all students,know yourself..your first step for preparedness for Exam.. ✍️ yes or no for each point.. please co-operate..so that I can help you...this efforts help you to grab success in Exam confidently..

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1️⃣ Cost Concepts & Cost Classification (VERY IMPORTANT)

Types of Costs

• Fixed, Variable, Mixed (Semi-variable)

• Step fixed cost

• Committed vs Discretionary fixed cost

• Relevant vs Irrelevant cost

• Sunk cost ❌ (never relevant)

• Opportunity cost ✔️ (always relevant)

• Differential / Incremental cost

• Avoidable vs Unavoidable cost

• Explicit vs Implicit cost

• Economic cost = Explicit + Implicit

🔑 Exam trap: Book value ≠ relevant cost

 

2️⃣ Cost Behavior & Cost Estimation

Methods

• High–Low method (most tested)

• Scatter graph

• Least squares regression (conceptual)

Key terms

• Contribution margin

• CM ratio

• Relevant range

• Margin of safety

 

3️⃣ Cost–Volume–Profit (CVP) Analysis ⭐⭐⭐

Core formulas

• BEP (units) = Fixed Cost ÷ CM per unit

• BEP (sales) = Fixed Cost ÷ CM ratio

• Target profit analysis

• Sales mix (weighted CM)

Concepts tested

• Impact of price change

• Impact of fixed cost increase

• Operating leverage

• Assumptions of CVP

🔑 CMA favorite: Multi-product BEP

 

4️⃣ Job Costing vs Process Costing

Job Order Costing

• Direct material

• Direct labor

• Manufacturing overhead (applied)

• Predetermined overhead rate

Process Costing

• Weighted Average vs FIFO

• Equivalent units (EUP)

• Normal vs abnormal loss

🔑 FIFO gives higher cost in inflation

 

5️⃣ Activity-Based Costing (ABC) ⭐⭐⭐

Key terms

• Activities

• Cost pools

• Cost drivers

• Unit-level, Batch-level, Product-level, Facility-level

Exam focus

• Overcosting vs Undercosting

• When ABC is preferred

• Difference between ABC vs Traditional costing

 

6️⃣ Absorption vs Variable Costing ⭐⭐⭐

Differences tested

Item Absorption Variable

Fixed MOH Product cost Period cost

Inventory Higher Lower

Income Depends on inventory change Sales driven

🔑 Inventory ↑ → Absorption profit ↑

 

7️⃣ Standard Costing & Variance Analysis ⭐⭐⭐⭐

Material Variances

• Price variance

• Quantity (efficiency) variance

• Mix & Yield variance

Labor Variances

• Rate variance

• Efficiency variance

Overhead Variances

• Variable OH: Spending & Efficiency

• Fixed OH: Spending & Volume

• Flexible budget variance

🔑 Who is responsible?

• Price → Purchasing

• Efficiency → Production

 

8️⃣ Responsibility Accounting & Performance Measurement

Responsibility centers

• Cost center

• Revenue center

• Profit center

• Investment center

Performance measures

• ROI

• Residual income

• ROA

• Balanced Scorecard (Financial & Non-financial)

🔑 Residual income avoids under-investment

 

9️⃣ Budgeting & Forecasting ⭐⭐⭐

Types of budgets

• Operating budget

• Capital budget

• Cash budget

• Flexible budget

• Zero-based budgeting

• Rolling (continuous) budget

Budgetary control

• Static vs Flexible budget variance

 

🔟 Decision-Making Techniques (Highly Tested)

Decisions

• Make or buy

• Special order

• Shutdown vs continue

• Sell or process further

• Product mix (limiting factor)

Key principle

➡️ Only relevant costs & revenues matter

 

1️⃣1️⃣ Transfer Pricing

Methods

• Market price

• Cost-based

• Negotiated price

🔑 Goal congruence is the key concept

 

1️⃣2️⃣ Capacity Management & Throughput

• Theoretical capacity

• Practical capacity (used for OH rate)

• Normal capacity

• Throughput contribution

• Bottleneck analysis

 

1️⃣3️⃣ Lean Accounting & Modern Concepts

• Just-in-Time (JIT)

• Kaizen costing

• Target costing

• Total Quality Management (TQM)

• Value chain analysis

 

🔑 FINAL EXAM STRATEGY (US CMA)

• CMA tests logic more than formulas

• Identify relevant cost

• Watch inventory movement

• Variances → cause & responsibility

• CVP → assumptions always tested

 

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Comprehensive mocktest Dec 22

  US CMA & ACCA (MA) focused question  covering costing, budgeting, variance analysis, performance measurement, financial statements, and decision-making.

 

PART A – 40 MCQs (Conceptual + Numerical Logic)

1. Cash Flow Statement

1. Interest paid under US GAAP is classified as:

A. Investing

B. Financing

C. Operating

D. OCI

Answer: 

2. Increase in accounts receivable results in:

A. Increase in operating cash flow

B. Decrease in operating cash flow

C. No effect

D. Financing cash flow

Answer: 

 

2. Cash Budget

3. Cash budget primarily focuses on:

A. Profitability

B. Liquidity

C. Solvency

D. Leverage

Answer: 

4. Depreciation is excluded from cash budget because it is:

A. Sunk cost

B. Historical cost

C. Non-cash item

D. Opportunity cost

Answer: 

 

3. Production & Purchase Budget

5. Production budget depends on:

A. Sales forecast and desired inventory

B. Purchase budget

C. Cash budget

D. Capital budget

Answer: 

6. Purchase budget calculates quantity of:

A. Finished goods

B. Direct materials

C. Labor hours

D. Overheads

Answer: 

 

4. Flexible Budget

7. Flexible budget adjusts costs based on:

A. Budgeted sales

B. Actual activity level

C. Standard cost

D. Capacity utilization

Answer: 

8. Flexible budget variance isolates:

A. Volume variance

B. Price variance

C. Efficiency & spending variance

D. Fixed cost variance

Answer: 

 

5. Job Order & Process Costing

9. Job order costing is suitable for:

A. Cement industry

B. Oil refinery

C. Custom furniture

D. Chemical plants

Answer: 

10. Process costing averages costs over:

A. Jobs

B. Batches

C. Units

D. Orders

Answer: 

 

6. Overhead Applied Rate

11. Predetermined overhead rate is based on:

A. Actual overhead / actual activity

B. Budgeted overhead / budgeted activity

C. Actual overhead / budgeted activity

D. Budgeted overhead / actual activity

Answer: 

12. Over-applied overhead means:

A. Applied < Actual

B. Applied > Actual

C. Budgeted < Actual

D. Fixed cost variance

Answer: 

 

7. Inventory Over/Under-valuation

13. Under-absorption of overhead causes inventory to be:

A. Overvalued

B. Undervalued

C. Correctly valued

D. Written off

Answer: 

 

8. Abnormal Losses

14. Abnormal process loss is:

A. Included in product cost

B. Charged to P&L

C. Capitalized

D. Deferred

Answer: 

 

9. Activity-Based Costing (ABC)

15. ABC reduces:

A. Prime cost

B. Conversion cost

C. Cross-cost subsidization

D. Variable costs

Answer: 

16. Cost pool in ABC refers to:

A. Activity group

B. Department

C. Job

D. Product line

Answer: 

17. Cost driver measures:

A. Output

B. Consumption of activity

C. Profitability

D. Efficiency

Answer: 

 

10. Overhead Allocation

18. Cost tracing uses:

A. Cause-and-effect

B. Arbitrary basis

C. Equal sharing

D. Judgment

Answer: 

19. Apportionment is used when cost:

A. Can be directly traced

B. Benefits multiple cost centers

C. Is irrelevant

D. Is sunk

Answer: 

20. Re-apportionment distributes:

A. Production overhead

B. Service department costs

C. Selling costs

D. Prime costs

Answer: 

 

11. ROI & Residual Income

21. ROI =

A. Profit ÷ Sales

B. Profit ÷ Assets

C. Sales ÷ Assets

D. Contribution ÷ Sales

Answer: 

22. Residual Income overcomes ROI limitation by considering:

A. Sales volume

B. Cost of capital

C. Gross margin

D. Operating cycle

Answer: 

 

12. Variance Analysis

23. Material efficiency variance is caused by:

A. Price change

B. Usage inefficiency

C. Wage rate

D. Capacity change

Answer: 

24. Labor efficiency variance focuses on:

A. Hours used vs standard

B. Wage rate

C. Idle time

D. Budgeted hours

Answer: 

25. Variable overhead efficiency variance is driven by:

A. Machine hours

B. Labor efficiency

C. Spending rate

D. Fixed cost

Answer: 

26. Fixed overhead volume variance arises due to:

A. Spending change

B. Capacity utilization

C. Rate change

D. Inflation

Answer: 

 

13. Responsibility Centers

27. Investment center manager is responsible for:

A. Cost only

B. Revenue only

C. Profit

D. Assets + profit

Answer: 

28. Cost center performance is measured by:

A. ROI

B. Revenue

C. Cost control

D. Market share

Answer: 

 

14. Cost Concepts

29. Sunk costs are:

A. Relevant

B. Avoidable

C. Irrelevant

D. Incremental

Answer: 

30. Opportunity cost represents:

A. Past cost

B. Explicit cost

C. Foregone benefit

D. Fixed cost

Answer: 

31. Economic cost includes:

A. Explicit only

B. Implicit only

C. Explicit + implicit

D. Historical

Answer: 

 

15. Capacity Concepts

32. Theoretical capacity assumes:

A. No interruptions

B. Normal downtime

C. Idle time

D. Breakdowns

Answer: 

33. Idle capacity represents:

A. Excess demand

B. Underutilized resources

C. Overhead absorption

D. Full utilization

Answer: 

 

16. Financial Performance

34. Gross profit =

A. Sales – variable cost

B. Sales – COGS

C. Contribution – fixed cost

D. Net income + tax

Answer: 

35. Contribution margin is useful for:

A. External reporting

B. CVP analysis

C. Tax reporting

D. Balance sheet

Answer: 

36. Break-even sales occur when:

A. Profit is maximum

B. Contribution = fixed cost

C. Revenue = cash inflow

D. Gross margin is zero

Answer: 

 

17. Liquidity, Solvency & Risk

37. Liquidity measures ability to:

A. Earn profit

B. Pay long-term debt

C. Meet short-term obligations

D. Increase leverage

Answer: 

38. Financial leverage increases:

A. Business risk

B. Operating risk

C. Financial risk

D. Market risk

Answer: 

39. Risk owner is the person who:

A. Identifies risk

B. Accepts risk

C. Is accountable for managing risk

D. Transfers risk

Answer: 

40. High operating efficiency implies:

A. High idle capacity

B. Optimal resource utilization

C. Excess capacity

D. Overcapitalization

Answer: 

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PART B – 10 Fill in the Blanks

41. Raw materials consumed = Opening RM + Purchases – ______

Answer: 

42. Prime cost includes direct material and ______

Answer: 

43. Conversion cost = Direct labor + ______

Answer: 

44. Joint costs are incurred ______ the split-off point.

Answer:

45. By-products have ______ economic value compared to joint products.

Answer: 

46. EPS = (Net income – ______) ÷ Weighted average shares

Answer: 

47. Diluted EPS assumes conversion of ______ securities.

Answer: 

48. Step-fixed costs remain constant within a ______ range.

Answer:

49. Super-variable costs change ______ with activity.

Answer: 

50. Other comprehensive income includes unrealized gains on ______ securities.

Answer: 

 

✅ Exam Tip (CMA Focus)

• ABC + Variance + ROI/RI = guaranteed high-weight area

• Flexible budget variances always use actual activity

• Sunk ≠ Relevant (CMA loves this trap)

 

🔢 US CMA NUMERICAL MCQs

 

1. Material Price Variance

Standard price = $5 per kg

Actual price = $6 per kg

Actual quantity purchased = 8,000 kg

Material price variance is:

A. $8,000 F

B. $8,000 U

C. $5,000 U

D. $6,000 F

✅ Answer: 

 

2. Material Efficiency Variance

Standard quantity = 2 kg/unit

Actual output = 3,000 units

Actual quantity used = 6,500 kg

Standard price = $4/kg

Material efficiency variance is:

A. $2,000 U

B. $1,800 U

C. $2,400 F

D. $2,000 F

✅ Answr

 

3. Labor Rate Variance

Standard rate = $20/hour

Actual rate = $18/hour

Actual hours = 4,500

Labor rate variance is:

A. $9,000 F

B. $9,000 U

C. $7,200 F

D. $7,200 U

✅ Answer: 

 

4. Labor Efficiency Variance

Standard hours per unit = 1.5

Actual output = 4,000 units

Actual hours = 6,500

Standard rate = $16

Labor efficiency variance:

A. $4,000 U

B. $6,000 U

C. $8,000 F

D. $6,000 F

✅ Answer: 

 

5. Variable Overhead Spending Variance

Actual VOH = $42,000

Actual hours = 7,000

Standard VOH rate = $5/hour

Spending variance equals:

A. $7,000 U

B. $7,000 F

C. $3,500 U

D. $3,500 F

✅ Answer: 

 

6. Variable Overhead Efficiency Variance

Standard hours = 6,000

Actual hours = 6,500

Standard VOH rate = $6

Efficiency variance:

A. $3,000 U

B. $3,000 F

C. $6,500 U

D. $6,500 F

✅ Answer: 

 

7. Fixed Overhead Volume Variance

Budgeted FOH = $120,000

Budgeted units = 30,000

Actual units = 27,000

Volume variance is:

A. $12,000 F

B. $12,000 U

C. $9,000 F

D. $9,000 U

✅ Answer: 

 

8. Predetermined Overhead Rate

Budgeted overhead = $180,000

Budgeted machine hours = 60,000

Predetermined OH rate is:

A. $3/hour

B. $4/hour

C. $2.5/hour

D. $5/hour

✅ Answer: 

 

9. Over-Applied Overhead

Applied OH = $195,000

Actual OH = $185,000

Over/under-applied overhead equals:

A. $10,000 over-applied

B. $10,000 under-applied

C. $195,000 over-applied

D. $185,000 under-applied

✅ Answer: 

 

10. Contribution Margin Ratio

Sales = $500,000

Variable costs = $350,000

Contribution margin ratio is:

A. 30%

B. 70%

C. 40%

D. 50%

✅ Answer: 

 

11. Break-Even Sales (Units)

Fixed costs = $180,000

Contribution per unit = $12

Break-even units:

A. 12,000

B. 15,000

C. 18,000

D. 20,000

✅ Answer: 

 

12. Break-Even Sales (Dollars)

CM ratio = 40%

Fixed costs = $200,000

Break-even sales revenue:

A. $300,000

B. $400,000

C. $500,000

D. $800,000

✅ Answer: 

 

13. ROI Calculation

Operating income = $90,000

Average assets = $600,000

ROI equals:

A. 10%

B. 12%

C. 15%

D. 18%

✅ Answer: 

 

14. Residual Income

Operating income = $150,000

Required return = 12%

Average assets = $1,000,000

Residual income equals:

A. $30,000

B. $120,000

C. $150,000

D. $270,000

✅ Answer: 

 

15. Cash Budget

Beginning cash = $40,000

Cash receipts = $120,000

Cash payments = $145,000

Ending cash balance:

A. $15,000

B. $25,000

C. $(15,000)

D. $(25,000)

✅ Answer: 

 

🔥 CMA EXAM SHORTCUTS

• Efficiency variances → Quantity/Hours

• Spending variances → Rate

• FOH volume → Capacity

• Residual income > ROI for decision-making

• Cash budget ignores depreciation

 

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