CIMA CIMAPRA17-BA2-1 Quiz 2 Topic 1 Questions 6-10

Question: 1

Refer to the exhibit.

q1_CIMAPRA17-BA2-1

A company issued its production budget based on an anticipated output of 800 units. Actual output was 1,000 units. The details of the costs are shown below:

The total budget variance was:

A5,000 adverse

B3,000 adverse

C2,000 adverse

D19,750 favourable

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Question: 2

A management accountant has forecast the following cash inflows from four potential projects.

q2_CIMAPRA17-BA2-1

All four projects require the same initial investment and will last for four years. They all result in a positive net present value but only one of the projects can be undertaken.

Which project should be selected?

AProject A

BProject B

CProject C

DProject D

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Question: 3

A management accountant has forecast the following cash inflows from four potential projects.

q3_CIMAPRA17-BA2-1

All four projects require the same initial investment and will last for four years. They all result in a positive net present value but only one of the projects can be undertaken.

Which project should be selected?

AProject A

BProject B

CProject C

DProject D

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Question: 4

The variable overhead expenditure variance is:

AThe over or under absorbed variable overhead

BThe difference between the actual hours worked and the standard hours produced, multiplied by the variable overhead absorption rate

CThe actual hours worked multiplied by the variable absorption rate

DThe difference between the variable overheads incurred and the flexed budget allowance for variable overheads

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Question: 5

Which of the following would NOT require taking into account the time value of money?

ADeciding to make a long-term investment in a project on the basis of its payback period.

BSelecting an investment project on the basis that it has a positive net present value (NPV).

CCalculating the present value of a five-year annuity.

DTaking a long-term investment decision on the basis of the project's internal rate of return (IRR).

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CIMA CIMAPRA17-BA2-1 Quiz:2 Topic:1 Questions:6-10