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Last Updated: Jul 17, 2026
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| Section | Weight | Objectives |
|---|---|---|
| Decision Making | 35% | - Relevant costing for short-term decisions - Pricing decisions - Investment appraisal techniques - Cost-volume-profit analysis - Risk and uncertainty analysis |
| Planning and Control | 30% | - Budgeting methods and techniques - Budgeting concepts and preparation - Performance measurement and reporting - Standard costing and variance analysis |
| The Context of Management Accounting | 10% | - Global Management Accounting Principles - Role of CIMA and professional ethics - Characteristics of useful financial information - Role and purpose of management accounting |
| Costing | 25% | - Marginal and absorption costing - Overhead allocation, apportionment and absorption - Job, batch, process and service costing - Cost classification and behaviour - Cost estimation techniques |
1. A company operates an absorption costing system. Overheads are absorbed using a pre-determined absorption rate using labour hours. In the period actual labour hours were 10,600, 400 hours below budget. Actual overheads for the period were £234,680 and there was an under-absorption of overheads of £1,480.
What was the budgeted level of overheads?
A) £224,720
B) £233,200
C) £245,072
D) £242,000
2. Which of the following statements about CIMA's role in relation to its students is correct?
i. CIMA's professional conduct staff process complaints made against CIMA students ii. Students are not governed by CIMA's code of ethics until they become registered CIMA members iii. Students may consult CIMA about situations in their work place that appear to conflict with CIMA's code of ethics iv. Once students have passed all of the CIMA exams they may use the designatory letters ACMA
A) (i), (ii) and (iv)
B) (i) and (iii)
C) (i), (iii) and (iv)
D) (iii) and (iv)
3. Relevant costs for decision making are.
A) Future costs which will be affected by the decision
B) Past costs incurred
C) Unavoidable costs
D) Variable costs only
4. A company has produced its cash budget for the year and is concerned at the level of the cash deficit being shown. Which THREE of the following would enable the company to reduce its cash deficit in the short term?
A) Increase the overdraft facility
B) Lease rather than purchase new non-current assets
C) Increase receivable levels to encourage sales
D) Purchase new non-current assets to increase productivity levels
E) Reduce inventory level of finished goods
F) Take longer to pay suppliers
5. In the process account, the accounting treatment of the value of the abnormal gain is:
A) Debit Process account Credit Abnormal Gain account
B) Debit Process account Credit Normal Loss account
C) Credit Process account Debit Abnormal Gain account
D) Credit Process account Debit Normal Loss account
Solutions:
| Question # 1 Answer: D | Question # 2 Answer: B | Question # 3 Answer: A | Question # 4 Answer: B,E,F | Question # 5 Answer: A |
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