CPA EXAM 2025/2026 ACTUAL ACCOUNTING MANAGEMENT
QUESTIONS AND ANSWERS ALREADY GRADED A+
If the total cost of a job is $4200
a) When profit is 25% of sales, the correct selling price is
b) When profit is 25% of cost, the correct selling price is
a) 4200 * (100/75) = $5600
b) 4200 * 25% = $5250
A company manufactures chemical X in a single process. At the start of the month there was no work-in-
process. During the month 300 litres of raw material were input into the process at a total cost of $6000.
Conversion costs during the month amounted to $4500. At the end of the month 250 litres of chemical X were
transferred to finished goods inventory. The remaining work-in-process was 100 percent complete with
respect to materials and 50 percent complete with respect to conversion costs. There were no losses in the
process.
The equivalent units for closing work-in-process at the end of the month would have been
Material Conversion costs
A 25 litres 25 litres
B 25 litres 50 litres
C 50 litres 25 litres
D 50 litres 50 litres
2. If there had been a normal process loss of 10 per cent of input during the month the value of this loss
would have been
A nil.
B $450.
C $600.
D $1050.
1=C
, CPA EXAM 2025/2026 ACTUAL ACCOUNTING MANAGEMENT
QUESTIONS AND ANSWERS ALREADY GRADED A+
2=A
3. 3 In a process account, abnormal losses are valued
A at zero.
B at their scrap value.
C at the cost of raw materials.
D the same as good production. D
3.4 A company needs to produce 340 litres of chemical Y. There is a normal loss of 10 per cent of the
material input into the process. During a given month the company did produce 340 litres of good
production, although there was an abnormal loss of 5 per cent of the material input into the process.
How many litres of material were input into the process during the month?
A 357 litres
B 374 litres
C 391 litres
D 400 litres D
3.5 &6 A company produces a certain food item in a manufacturing process. On 1 November, there was
no opening inventory of work in process. During November, 500 units of material were input to the process,
with a cost of $9000. Direct labour costs in November were $3840. Production overhead is absorbed at the rate
of 200 per cent of direct labour costs. Closing inventory on 30 November consisted of 100 units which were
100 per cent complete as to materials and 80 per cent complete as to labour and overhead. There was no loss
in process.
5 The full production cost of completed units during November was
A $10 400.
B $16 416.
C $16 800.
, CPA EXAM 2025/2026 ACTUAL ACCOUNTING MANAGEMENT
QUESTIONS AND ANSWERS ALREADY GRADED A+
D $20 520.
6 The value of the closing work in process on 30 November is
A $2440.
B $3720.
C $4104.
D $20 520.
5=C
6=B
3.7 How is revenue from scrap treated?
A as a bonus to all employees
B as an addition to sales revenue
C as a reduction in costs of processing
D as a bonus to production employees C
REV 1.1 Possum Ltd is now engaged solely in a service industry having previously been involved in
manufacturing. Its chief accountant is considering which of the following management accounting
processes the company needs to retain
I. capacity planning.
II. inventory valuation.
III. production planning.
IV. workforce planning.
A IV only
B I and III only
C II and III only
D II and IV only A
, CPA EXAM 2025/2026 ACTUAL ACCOUNTING MANAGEMENT
QUESTIONS AND ANSWERS ALREADY GRADED A+
The following relates to Q1 and Q2
$ per unit Selling Price 6
Vari Production Cost 1.2 Vari Selling Cost 0.4 Fixed Production Cost 4 Fixed Selling Cost 0.8
Budgeted production and sales for the year are 10 000 units.
1 What is the company's breakeven point, to the nearest whole unit?
A 8000 units
B 8333 units
C 10 000 units
D 10 909 units
2 It is now expected that the variable production cost per unit and the selling price per unit will each increase
by 10 per cent, and fixed production costs will rise by 25 per cent. What will be the new breakeven point, to
the nearest whole unit?
A 8788 units
B 11 600 units
C 11 885 units
D 12 397 units
1. D
2. C
1.1. Which of the following is not an essential quality of good information?
A It should be timely.
B It should be completely accurate.
C It should be relevant for its purposes.
D It should be communicated to the right person. B
QUESTIONS AND ANSWERS ALREADY GRADED A+
If the total cost of a job is $4200
a) When profit is 25% of sales, the correct selling price is
b) When profit is 25% of cost, the correct selling price is
a) 4200 * (100/75) = $5600
b) 4200 * 25% = $5250
A company manufactures chemical X in a single process. At the start of the month there was no work-in-
process. During the month 300 litres of raw material were input into the process at a total cost of $6000.
Conversion costs during the month amounted to $4500. At the end of the month 250 litres of chemical X were
transferred to finished goods inventory. The remaining work-in-process was 100 percent complete with
respect to materials and 50 percent complete with respect to conversion costs. There were no losses in the
process.
The equivalent units for closing work-in-process at the end of the month would have been
Material Conversion costs
A 25 litres 25 litres
B 25 litres 50 litres
C 50 litres 25 litres
D 50 litres 50 litres
2. If there had been a normal process loss of 10 per cent of input during the month the value of this loss
would have been
A nil.
B $450.
C $600.
D $1050.
1=C
, CPA EXAM 2025/2026 ACTUAL ACCOUNTING MANAGEMENT
QUESTIONS AND ANSWERS ALREADY GRADED A+
2=A
3. 3 In a process account, abnormal losses are valued
A at zero.
B at their scrap value.
C at the cost of raw materials.
D the same as good production. D
3.4 A company needs to produce 340 litres of chemical Y. There is a normal loss of 10 per cent of the
material input into the process. During a given month the company did produce 340 litres of good
production, although there was an abnormal loss of 5 per cent of the material input into the process.
How many litres of material were input into the process during the month?
A 357 litres
B 374 litres
C 391 litres
D 400 litres D
3.5 &6 A company produces a certain food item in a manufacturing process. On 1 November, there was
no opening inventory of work in process. During November, 500 units of material were input to the process,
with a cost of $9000. Direct labour costs in November were $3840. Production overhead is absorbed at the rate
of 200 per cent of direct labour costs. Closing inventory on 30 November consisted of 100 units which were
100 per cent complete as to materials and 80 per cent complete as to labour and overhead. There was no loss
in process.
5 The full production cost of completed units during November was
A $10 400.
B $16 416.
C $16 800.
, CPA EXAM 2025/2026 ACTUAL ACCOUNTING MANAGEMENT
QUESTIONS AND ANSWERS ALREADY GRADED A+
D $20 520.
6 The value of the closing work in process on 30 November is
A $2440.
B $3720.
C $4104.
D $20 520.
5=C
6=B
3.7 How is revenue from scrap treated?
A as a bonus to all employees
B as an addition to sales revenue
C as a reduction in costs of processing
D as a bonus to production employees C
REV 1.1 Possum Ltd is now engaged solely in a service industry having previously been involved in
manufacturing. Its chief accountant is considering which of the following management accounting
processes the company needs to retain
I. capacity planning.
II. inventory valuation.
III. production planning.
IV. workforce planning.
A IV only
B I and III only
C II and III only
D II and IV only A
, CPA EXAM 2025/2026 ACTUAL ACCOUNTING MANAGEMENT
QUESTIONS AND ANSWERS ALREADY GRADED A+
The following relates to Q1 and Q2
$ per unit Selling Price 6
Vari Production Cost 1.2 Vari Selling Cost 0.4 Fixed Production Cost 4 Fixed Selling Cost 0.8
Budgeted production and sales for the year are 10 000 units.
1 What is the company's breakeven point, to the nearest whole unit?
A 8000 units
B 8333 units
C 10 000 units
D 10 909 units
2 It is now expected that the variable production cost per unit and the selling price per unit will each increase
by 10 per cent, and fixed production costs will rise by 25 per cent. What will be the new breakeven point, to
the nearest whole unit?
A 8788 units
B 11 600 units
C 11 885 units
D 12 397 units
1. D
2. C
1.1. Which of the following is not an essential quality of good information?
A It should be timely.
B It should be completely accurate.
C It should be relevant for its purposes.
D It should be communicated to the right person. B
