Free IMA CMA Part 1 (Financial Planning, Performance, and Analytics) Cost Management Practice Questions
Cost Management on CMA Part 1 covers cost concepts and behavior, costing methods (job order, process, activity-based, life-cycle, joint product, by-product), inventory management (EOQ, JIT, lean), and supply chain management. Activity-based costing and joint-cost allocation are common computational topics.
Sample Questions
Question 1
Easy
Prime costs consist of which of the following?
Solution
C is correct. Prime costs are the direct, traceable inputs to a product: direct materials plus direct labor. Conversion costs (a separate concept) are direct labor plus manufacturing overhead, the costs incurred to convert raw materials into finished goods. Total manufacturing cost is the sum of all three components.
Question 2
Medium
Which of the following best describes a primary objective of a just-in-time (JIT) inventory system?
Solution
B is correct. JIT philosophy aims to receive materials and produce goods only as needed, driving inventory levels toward zero while still meeting production schedules. Achieving this requires reliable suppliers, short setup times, and high-quality processes so that low inventory does not interrupt operations.
Question 3
Hard
Bellweather Co. allocates overhead using activity-based costing with two cost pools. The Setup pool totals $200,000 and is driven by 400 setups; the Machining pool totals $600,000 and is driven by 50,000 machine hours. Product X is produced in an order of 1,000 units that consumes 8 setups and 200 machine hours. What is the ABC overhead cost per unit of Product X?
Solution
D is correct. Compute each activity rate, apply each driver, then divide by units. Setup rate: per setup. Machining rate: per machine hour. Allocated cost for the order: . Per unit: .