CIMA BA2 Fundamentals of Management Accounting 2025 — 55
Q&A Practice Exam
Series:
CrashCourses Professional Study Series
Author:
Dr Z. Moomba, MBChB, MRCPsych | BethelWellness Ltd
Exam Target:
CIMA BA2
Year:
2025/2026
Format:
55 Questions with Verified Answers and Rationales
>
Author's Note:
This document is an original work produced for the CrashCourses Professional Study Series.
Clinical questions and professional scenarios were composed by Dr Z. Moomba based on current
exam objectives, published guidelines, and evidence-based sources (2024–2025). All patient
names, ages, and case details are fictional. Any resemblance to existing published Q&A banks is
coincidental. For personal study use only — not for reproduction or redistribution.
SECTION A — FOUNDATIONS
1. A private hospital network is reviewing the cost of its MRI scanning department. The monthly lease
for the MRI machine is £15,000, and the cost of contrast dye is £40 per scan. How should the MRI
lease cost be classified based on behaviour?
A) Variable cost
B) Semi-variable cost
C) Fixed cost
D) Stepped fixed cost
Answer: C
,Rationale:
a) A fixed cost remains constant in total within a relevant range of activity, regardless of the
volume of output (number of scans).
b) The lease is £15,000 per month regardless of whether 0 or 1,000 scans are performed.
c) Semi-variable is incorrect as it would contain both a fixed and variable element (e.g., a phone
tariff).
d) Examiner Pearl: Always identify the cost object and activity level when classifying costs; time-
bound leases are classic fixed costs. [CIMA BA2 Syllabus 2025]
2. A manufacturing plant produces custom orthopaedic implants. The factory supervisor's salary is
£45,000 per year. For a specific batch of titanium knee joints, how is the supervisor's salary
classified?
A) Direct material
B) Direct labour
C) Indirect production overhead
D) Non-production overhead
Answer: C
Rationale:
a) The supervisor oversees the whole factory, so their salary cannot be directly traced to a single
batch of knee joints.
b) The key discriminator is that it is a factory (production) cost, but not traceable to a specific unit.
c) Non-production overhead is incorrect because the supervisor is involved in the manufacturing
facility, not admin or selling.
d) Examiner Pearl: Direct costs can be specifically and exclusively identified with a cost object;
indirect costs must be apportioned or absorbed. [CIMA BA2 Syllabus 2025]
3. A dental clinic uses high-speed handpiece drills. The maintenance contract costs £500 per month
plus £10 per hour of usage. What type of cost is this?
A) Fixed cost
B) Variable cost
C) Semi-variable cost
D) Stepped fixed cost
,Answer: C
Rationale:
a) Semi-variable costs have both a fixed component (the basic £500 monthly fee) and a variable
component (£10 per hour).
b) The explicit separation of a flat rate and a usage rate defines semi-variable behaviour.
c) Stepped fixed is wrong because the cost increases continuously with every hour, rather than
jumping at specific capacity thresholds.
d) Examiner Pearl: The high-low method is the standard technique used to separate the fixed and
variable elements of semi-variable costs. [CIMA BA2 Syllabus 2025]
4. A pharmaceutical company absorbs overheads based on direct labour hours. Budgeted overheads
are £120,000 and budgeted labour hours are 8,000. Actual overheads incurred were £125,000 and
actual labour hours worked were 8,500. What is the over or under absorption?
A) £5,000 under-absorbed
B) £2,500 over-absorbed
C) £5,000 over-absorbed
D) £2,500 under-absorbed
Answer: B
Rationale:
a) The predetermined Overhead Absorption Rate (OAR) is £120,,000 = £15 per hour.
Absorbed overhead = £15 x 8,500 actual hours = £127,500.
b) Absorbed (£127,500) > Actual (£125,000), meaning £2,500 was over-absorbed.
c) £5,000 under-absorbed incorrectly compares budgeted overhead to actual overhead without
adjusting for actual activity.
d) Examiner Pearl: Over-absorption increases reported profit because too much overhead was
charged to inventory/cost of sales. [CIMA BA2 Syllabus 2025]
5. In a period, a company produces 10,000 units and sells 8,000 units. Opening inventory is zero.
Which costing method will report a higher profit?
A) Marginal costing
B) Absorption costing
, C) Both will report the same profit
D) Depends on the variable cost per unit
Answer: B
Rationale:
a) Absorption costing capitalises fixed production overheads into inventory. When production
exceeds sales, inventory increases, deferring some fixed costs to the next period.
b) The deferral of fixed overheads in closing inventory means fewer costs are charged to the
current income statement under absorption costing.
c) Marginal costing is incorrect because it writes off all fixed production overheads as period
costs immediately, resulting in lower profit.
d) Examiner Pearl: If Production > Sales, Absorption Profit > Marginal Profit. If Sales > Production,
Marginal Profit > Absorption Profit. [CIMA BA2 Syllabus 2025]
6. A clinic offers health screening packages for £150 each. Variable costs are £60 per package, and
fixed monthly costs are £18,000. What is the break-even point in packages?
A) 120 packages
B) 200 packages
C) 300 packages
D) 450 packages
Answer: B
Rationale:
a) Contribution per unit = Selling Price (£150) - Variable Cost (£60) = £90. Break-even point =
Fixed Costs / Contribution per unit.
b) £18,000 / £90 = 200 packages required to break even.
c) 300 packages incorrectly uses the variable cost (£18,000 / £60) instead of the contribution.
d) Examiner Pearl: Break-even analysis assumes fixed costs remain constant and variable costs
per unit are linear within the relevant range. [CIMA BA2 Syllabus 2025]
7. A company has a P/V (Profit/Volume) ratio of 40%. Fixed costs are £50,000. They want to achieve
a target profit of £30,000. What is the required sales revenue?
A) £75,000
Q&A Practice Exam
Series:
CrashCourses Professional Study Series
Author:
Dr Z. Moomba, MBChB, MRCPsych | BethelWellness Ltd
Exam Target:
CIMA BA2
Year:
2025/2026
Format:
55 Questions with Verified Answers and Rationales
>
Author's Note:
This document is an original work produced for the CrashCourses Professional Study Series.
Clinical questions and professional scenarios were composed by Dr Z. Moomba based on current
exam objectives, published guidelines, and evidence-based sources (2024–2025). All patient
names, ages, and case details are fictional. Any resemblance to existing published Q&A banks is
coincidental. For personal study use only — not for reproduction or redistribution.
SECTION A — FOUNDATIONS
1. A private hospital network is reviewing the cost of its MRI scanning department. The monthly lease
for the MRI machine is £15,000, and the cost of contrast dye is £40 per scan. How should the MRI
lease cost be classified based on behaviour?
A) Variable cost
B) Semi-variable cost
C) Fixed cost
D) Stepped fixed cost
Answer: C
,Rationale:
a) A fixed cost remains constant in total within a relevant range of activity, regardless of the
volume of output (number of scans).
b) The lease is £15,000 per month regardless of whether 0 or 1,000 scans are performed.
c) Semi-variable is incorrect as it would contain both a fixed and variable element (e.g., a phone
tariff).
d) Examiner Pearl: Always identify the cost object and activity level when classifying costs; time-
bound leases are classic fixed costs. [CIMA BA2 Syllabus 2025]
2. A manufacturing plant produces custom orthopaedic implants. The factory supervisor's salary is
£45,000 per year. For a specific batch of titanium knee joints, how is the supervisor's salary
classified?
A) Direct material
B) Direct labour
C) Indirect production overhead
D) Non-production overhead
Answer: C
Rationale:
a) The supervisor oversees the whole factory, so their salary cannot be directly traced to a single
batch of knee joints.
b) The key discriminator is that it is a factory (production) cost, but not traceable to a specific unit.
c) Non-production overhead is incorrect because the supervisor is involved in the manufacturing
facility, not admin or selling.
d) Examiner Pearl: Direct costs can be specifically and exclusively identified with a cost object;
indirect costs must be apportioned or absorbed. [CIMA BA2 Syllabus 2025]
3. A dental clinic uses high-speed handpiece drills. The maintenance contract costs £500 per month
plus £10 per hour of usage. What type of cost is this?
A) Fixed cost
B) Variable cost
C) Semi-variable cost
D) Stepped fixed cost
,Answer: C
Rationale:
a) Semi-variable costs have both a fixed component (the basic £500 monthly fee) and a variable
component (£10 per hour).
b) The explicit separation of a flat rate and a usage rate defines semi-variable behaviour.
c) Stepped fixed is wrong because the cost increases continuously with every hour, rather than
jumping at specific capacity thresholds.
d) Examiner Pearl: The high-low method is the standard technique used to separate the fixed and
variable elements of semi-variable costs. [CIMA BA2 Syllabus 2025]
4. A pharmaceutical company absorbs overheads based on direct labour hours. Budgeted overheads
are £120,000 and budgeted labour hours are 8,000. Actual overheads incurred were £125,000 and
actual labour hours worked were 8,500. What is the over or under absorption?
A) £5,000 under-absorbed
B) £2,500 over-absorbed
C) £5,000 over-absorbed
D) £2,500 under-absorbed
Answer: B
Rationale:
a) The predetermined Overhead Absorption Rate (OAR) is £120,,000 = £15 per hour.
Absorbed overhead = £15 x 8,500 actual hours = £127,500.
b) Absorbed (£127,500) > Actual (£125,000), meaning £2,500 was over-absorbed.
c) £5,000 under-absorbed incorrectly compares budgeted overhead to actual overhead without
adjusting for actual activity.
d) Examiner Pearl: Over-absorption increases reported profit because too much overhead was
charged to inventory/cost of sales. [CIMA BA2 Syllabus 2025]
5. In a period, a company produces 10,000 units and sells 8,000 units. Opening inventory is zero.
Which costing method will report a higher profit?
A) Marginal costing
B) Absorption costing
, C) Both will report the same profit
D) Depends on the variable cost per unit
Answer: B
Rationale:
a) Absorption costing capitalises fixed production overheads into inventory. When production
exceeds sales, inventory increases, deferring some fixed costs to the next period.
b) The deferral of fixed overheads in closing inventory means fewer costs are charged to the
current income statement under absorption costing.
c) Marginal costing is incorrect because it writes off all fixed production overheads as period
costs immediately, resulting in lower profit.
d) Examiner Pearl: If Production > Sales, Absorption Profit > Marginal Profit. If Sales > Production,
Marginal Profit > Absorption Profit. [CIMA BA2 Syllabus 2025]
6. A clinic offers health screening packages for £150 each. Variable costs are £60 per package, and
fixed monthly costs are £18,000. What is the break-even point in packages?
A) 120 packages
B) 200 packages
C) 300 packages
D) 450 packages
Answer: B
Rationale:
a) Contribution per unit = Selling Price (£150) - Variable Cost (£60) = £90. Break-even point =
Fixed Costs / Contribution per unit.
b) £18,000 / £90 = 200 packages required to break even.
c) 300 packages incorrectly uses the variable cost (£18,000 / £60) instead of the contribution.
d) Examiner Pearl: Break-even analysis assumes fixed costs remain constant and variable costs
per unit are linear within the relevant range. [CIMA BA2 Syllabus 2025]
7. A company has a P/V (Profit/Volume) ratio of 40%. Fixed costs are £50,000. They want to achieve
a target profit of £30,000. What is the required sales revenue?
A) £75,000
