CMA (CERTIFIED MANAGEMENT
ACCOUNTANT) EXAM BANK –
COMPREHENSIVE EXAM WITH
ANSWERS AND RATIONALES
1. Which of the following is a primary difference
between financial accounting and management
accounting?
A) Financial accounting is future-oriented;
management accounting is historical
B) Financial accounting must follow GAAP;
management accounting does not
C) Management accounting is mandatory for public
companies; financial accounting is optional
D) Management accounting reports only to external
parties
Correct answer: B
Rationale: Financial accounting follows GAAP/IFRS
for external users; management accounting provides
internal information without required external
standards, focusing on relevance for decision-
making.
,2. A manufacturing company has direct materials
used of $50,000, direct labor of $30,000,
manufacturing overhead of $20,000, and beginning
work-in-process of $10,000. Ending WIP is $15,000.
The cost of goods manufactured (COGM) is:
A) $95,000
B) $110,000
C) $85,000
D) $100,000
Correct answer: A
Rationale: Total manufacturing costs = DM + DL +
MOH = $50,000 + $30,000 + $20,000 = $100,000.
COGM = Total Mfg Costs + Beginning WIP – Ending
WIP = $100,000 + $10,000 – $15,000 = $95,000.
3. Which of the following costs is classified as a
period cost rather than a product cost?
A) Depreciation on factory equipment
B) Direct labor wages
C) Sales commissions
D) Raw materials used in production
Correct answer: C
,Rationale: Period costs are expensed in the period
incurred (selling and administrative expenses). Sales
commissions are selling costs. Product costs (DM,
DL, MOH) are inventoried until sale.
4. A company produces 10,000 units. Total fixed
costs are $100,000. Variable cost per unit is $15. The
selling price per unit is $25. The break-even point in
units is:
A) 4,000 units
B) 6,667 units
C) 10,000 units
D) 2,500 units
Correct answer: C
Rationale: Contribution margin per unit = $25 – $15 =
$10. Break-even units = Fixed costs / CM per unit =
$100,000 / $10 = 10,000 units.
5. A company has actual sales of $500,000, break-
even sales of $350,000. The margin of safety ratio is:
A) 30%
B) 42.86%
C) 70%
, D) 25%
Correct answer: A
Rationale: Margin of safety = Actual sales – Break-
even sales = $500,000 – $350,000 = $150,000. Margin
of safety ratio = $150,000 / $500,000 = 30%.
6. Operating leverage is defined as:
A) Fixed costs divided by variable costs
B) Contribution margin divided by operating income
C) Sales divided by total costs
D) Variable costs divided by sales
Correct answer: B
Rationale: Degree of operating leverage (DOL) =
Contribution Margin / Operating Income. It measures
sensitivity of operating income to changes in sales
volume.
7. A company has contribution margin of $200,000
and operating income of $50,000. If sales increase by
10%, operating income will increase by
approximately:
A) 10%
B) 20%
ACCOUNTANT) EXAM BANK –
COMPREHENSIVE EXAM WITH
ANSWERS AND RATIONALES
1. Which of the following is a primary difference
between financial accounting and management
accounting?
A) Financial accounting is future-oriented;
management accounting is historical
B) Financial accounting must follow GAAP;
management accounting does not
C) Management accounting is mandatory for public
companies; financial accounting is optional
D) Management accounting reports only to external
parties
Correct answer: B
Rationale: Financial accounting follows GAAP/IFRS
for external users; management accounting provides
internal information without required external
standards, focusing on relevance for decision-
making.
,2. A manufacturing company has direct materials
used of $50,000, direct labor of $30,000,
manufacturing overhead of $20,000, and beginning
work-in-process of $10,000. Ending WIP is $15,000.
The cost of goods manufactured (COGM) is:
A) $95,000
B) $110,000
C) $85,000
D) $100,000
Correct answer: A
Rationale: Total manufacturing costs = DM + DL +
MOH = $50,000 + $30,000 + $20,000 = $100,000.
COGM = Total Mfg Costs + Beginning WIP – Ending
WIP = $100,000 + $10,000 – $15,000 = $95,000.
3. Which of the following costs is classified as a
period cost rather than a product cost?
A) Depreciation on factory equipment
B) Direct labor wages
C) Sales commissions
D) Raw materials used in production
Correct answer: C
,Rationale: Period costs are expensed in the period
incurred (selling and administrative expenses). Sales
commissions are selling costs. Product costs (DM,
DL, MOH) are inventoried until sale.
4. A company produces 10,000 units. Total fixed
costs are $100,000. Variable cost per unit is $15. The
selling price per unit is $25. The break-even point in
units is:
A) 4,000 units
B) 6,667 units
C) 10,000 units
D) 2,500 units
Correct answer: C
Rationale: Contribution margin per unit = $25 – $15 =
$10. Break-even units = Fixed costs / CM per unit =
$100,000 / $10 = 10,000 units.
5. A company has actual sales of $500,000, break-
even sales of $350,000. The margin of safety ratio is:
A) 30%
B) 42.86%
C) 70%
, D) 25%
Correct answer: A
Rationale: Margin of safety = Actual sales – Break-
even sales = $500,000 – $350,000 = $150,000. Margin
of safety ratio = $150,000 / $500,000 = 30%.
6. Operating leverage is defined as:
A) Fixed costs divided by variable costs
B) Contribution margin divided by operating income
C) Sales divided by total costs
D) Variable costs divided by sales
Correct answer: B
Rationale: Degree of operating leverage (DOL) =
Contribution Margin / Operating Income. It measures
sensitivity of operating income to changes in sales
volume.
7. A company has contribution margin of $200,000
and operating income of $50,000. If sales increase by
10%, operating income will increase by
approximately:
A) 10%
B) 20%
