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  • Exam Name: Fundamentals of management accounting
  • Last Update: 26-May-2024
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BA2 Questions and Answers

Question # 1

The gradient of the line plotted on a profit/volume (PV) graph is determined by:


The fixed costs


The number of units sold


The margin of safety


The profit/volume ratio

Question # 2

Two rival furniture manufacturers have recently merged together. Before the merge each party had three outlets and one factory each. Now they have two factories, six stores with another 3 planned in the next year.

Previously, one company had operated with function cost centres, looking at costs incurred by each department whilst the other had chosen to look at costs per activity.

Whilst the companies were small this worked and costs were easy to manage and issues could be dealt with quickly and efficiently. Since then costs have gone out of control as the old systems no longer work for this

large, nationwide company.

What is a suitable type of cost centre to use now?




Service location



Question # 3

Which of the following is not a relevant cost?


Sunk cost


Incremental cost


Avoidable cost


Differential cost

Question # 4

A chemical process has a normal wastage of 8% of input. For the month of June, 5,000 liters of materials were input and there was an abnormal gain of 200 liters.

The quantity of good production achieved was

Question # 5

The standard labour hours for all products manufactured by a company include an allowance for idle time. Idle time is budgeted to be 5% of total hours worked. Each unit of product G requires an input of 9.5 active labour hours. The labour rate is $12 per hour.

The standard labour cost shown on the standard cost card for one unit of product G will be









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