CERTIFIED MANAGEMENT ACCOUNTANT
(CMA) CERTIFICATION: COMPLETE PRACTICE
EXAM WITH ANSWERS AND RATIONALES
PART 1: FINANCIAL PLANNING, PERFORMANCE, AND ANALYTICS
Question 1
A management accountant is developing a budget for the upcoming year. The
accountant notices that the historical data shows a strong correlation between
sales volume and a key economic indicator. Which of the following budgeting
approaches would be most appropriate to use?
A) Zero-based budgeting
B) Activity-based budgeting
C) Rolling budget
D) Regression analysis based on historical data
Answer: D
Rationale: Regression analysis is a quantitative forecasting method that uses
historical data to identify relationships between variables. When there is a strong
correlation between sales volume and an economic indicator, regression analysis
can be used to predict future sales based on the economic indicator. Zero-based
budgeting (A) starts from zero each period. Activity-based budgeting (B) focuses
on activities and their costs. Rolling budgets (C) are continuously updated but do
not specifically use statistical relationships .
Question 2
A company uses a standard cost system. The actual variable overhead cost for the
period was $500,000, while the standard variable overhead cost based on actual
,production was $480,000. The variable overhead spending variance was $25,000
favorable. Which of the following is true regarding the variable overhead
efficiency variance?
A) $45,000 unfavorable
B) $20,000 unfavorable
C) $45,000 favorable
D) $20,000 favorable
Answer: A
Rationale: Total variable overhead variance = Actual overhead - Standard
overhead = $500,000 - $480,000 = $20,000 unfavorable. The spending variance is
$25,000 favorable. Efficiency variance = Total variance - Spending variance =
$20,000 U - $25,000 F = $45,000 unfavorable. A favorable spending variance with
an unfavorable efficiency variance means the company paid less per hour than
standard but used more hours than expected .
Question 3
Which of the following statements best describes the concept of a "balanced
scorecard"?
A) It is a financial reporting tool that compares budget to actual results
B) It is a strategic performance management framework that includes financial
and non-financial metrics
C) It is a budgeting technique that allocates resources based on strategic priorities
D) It is a method for evaluating investment proposals based on discounted cash
flows
Answer: B
,Rationale: The balanced scorecard is a strategic performance management
framework that translates an organization's mission and strategy into a
comprehensive set of performance measures. It includes four perspectives:
financial, customer, internal business processes, and learning and growth. It
balances financial metrics with non-financial drivers of future performance. Option
A describes variance analysis. Option C describes strategic budgeting. Option D
describes capital budgeting techniques .
Question 4
A company produces two joint products, Product A and Product B, in a production
process. The total joint costs are $100,000. Product A has a sales value of
$150,000 and Product B has a sales value of $50,000. Using the sales value at split-
off method, the amount of joint costs allocated to Product A is closest to:
A) $50,000
B) $75,000
C) $100,000
D) $25,000
Answer: B
Rationale: The sales value at split-off method allocates joint costs based on the
relative sales value of each product at the split-off point. Total sales value =
$150,000 + $50,000 = $200,000. Product A's percentage = $150,000 / $200,000 =
75%. Allocated joint cost = 75% × $100,000 = $75,000. Product B would receive
$25,000. This method is commonly used when products can be sold at split-off .
Question 5
Which of the following best describes the role of the "data control group" in a
computer department for proper segregation of duties?
, A) The data control group is responsible for designing and writing computer
programs
B) The data control group is responsible for reprocessing errors detected during
data processing
C) The data control group is responsible for managing the computer department
D) The data control group is responsible for analyzing system requirements
Answer: B
Rationale: The data control group is responsible for reprocessing errors detected
during data processing as part of proper segregation of duties. The department
manager (A) should review transactions but not process them. The systems analyst
(D) should view and analyze transactions but not process them. The computer
programmer (C) should have access to programs, not transactions .
Question 6
A company is preparing its cash budget for the next quarter. The company expects
sales of $100,000 in each month. Collections are 40% in the month of sale and
60% in the month following sale. Beginning accounts receivable balance is
$60,000. Total cash collections for the first month of the quarter are closest to:
A) $100,000
B) $140,000
C) $160,000
D) $200,000
Answer: A
Rationale: Cash collections for the first month = Collections from prior month sales
+ Collections from current month sales = (Beginning AR balance) + (40% × Current
month sales). Since Beginning AR represents 60% of prior month sales, the first
(CMA) CERTIFICATION: COMPLETE PRACTICE
EXAM WITH ANSWERS AND RATIONALES
PART 1: FINANCIAL PLANNING, PERFORMANCE, AND ANALYTICS
Question 1
A management accountant is developing a budget for the upcoming year. The
accountant notices that the historical data shows a strong correlation between
sales volume and a key economic indicator. Which of the following budgeting
approaches would be most appropriate to use?
A) Zero-based budgeting
B) Activity-based budgeting
C) Rolling budget
D) Regression analysis based on historical data
Answer: D
Rationale: Regression analysis is a quantitative forecasting method that uses
historical data to identify relationships between variables. When there is a strong
correlation between sales volume and an economic indicator, regression analysis
can be used to predict future sales based on the economic indicator. Zero-based
budgeting (A) starts from zero each period. Activity-based budgeting (B) focuses
on activities and their costs. Rolling budgets (C) are continuously updated but do
not specifically use statistical relationships .
Question 2
A company uses a standard cost system. The actual variable overhead cost for the
period was $500,000, while the standard variable overhead cost based on actual
,production was $480,000. The variable overhead spending variance was $25,000
favorable. Which of the following is true regarding the variable overhead
efficiency variance?
A) $45,000 unfavorable
B) $20,000 unfavorable
C) $45,000 favorable
D) $20,000 favorable
Answer: A
Rationale: Total variable overhead variance = Actual overhead - Standard
overhead = $500,000 - $480,000 = $20,000 unfavorable. The spending variance is
$25,000 favorable. Efficiency variance = Total variance - Spending variance =
$20,000 U - $25,000 F = $45,000 unfavorable. A favorable spending variance with
an unfavorable efficiency variance means the company paid less per hour than
standard but used more hours than expected .
Question 3
Which of the following statements best describes the concept of a "balanced
scorecard"?
A) It is a financial reporting tool that compares budget to actual results
B) It is a strategic performance management framework that includes financial
and non-financial metrics
C) It is a budgeting technique that allocates resources based on strategic priorities
D) It is a method for evaluating investment proposals based on discounted cash
flows
Answer: B
,Rationale: The balanced scorecard is a strategic performance management
framework that translates an organization's mission and strategy into a
comprehensive set of performance measures. It includes four perspectives:
financial, customer, internal business processes, and learning and growth. It
balances financial metrics with non-financial drivers of future performance. Option
A describes variance analysis. Option C describes strategic budgeting. Option D
describes capital budgeting techniques .
Question 4
A company produces two joint products, Product A and Product B, in a production
process. The total joint costs are $100,000. Product A has a sales value of
$150,000 and Product B has a sales value of $50,000. Using the sales value at split-
off method, the amount of joint costs allocated to Product A is closest to:
A) $50,000
B) $75,000
C) $100,000
D) $25,000
Answer: B
Rationale: The sales value at split-off method allocates joint costs based on the
relative sales value of each product at the split-off point. Total sales value =
$150,000 + $50,000 = $200,000. Product A's percentage = $150,000 / $200,000 =
75%. Allocated joint cost = 75% × $100,000 = $75,000. Product B would receive
$25,000. This method is commonly used when products can be sold at split-off .
Question 5
Which of the following best describes the role of the "data control group" in a
computer department for proper segregation of duties?
, A) The data control group is responsible for designing and writing computer
programs
B) The data control group is responsible for reprocessing errors detected during
data processing
C) The data control group is responsible for managing the computer department
D) The data control group is responsible for analyzing system requirements
Answer: B
Rationale: The data control group is responsible for reprocessing errors detected
during data processing as part of proper segregation of duties. The department
manager (A) should review transactions but not process them. The systems analyst
(D) should view and analyze transactions but not process them. The computer
programmer (C) should have access to programs, not transactions .
Question 6
A company is preparing its cash budget for the next quarter. The company expects
sales of $100,000 in each month. Collections are 40% in the month of sale and
60% in the month following sale. Beginning accounts receivable balance is
$60,000. Total cash collections for the first month of the quarter are closest to:
A) $100,000
B) $140,000
C) $160,000
D) $200,000
Answer: A
Rationale: Cash collections for the first month = Collections from prior month sales
+ Collections from current month sales = (Beginning AR balance) + (40% × Current
month sales). Since Beginning AR represents 60% of prior month sales, the first
