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Advanced Management Accounting

Last Update May 21, 2024
Total Questions : 184

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All CIMA Management Related Certification Exams

E2 Total Questions : 185 Updated : May 21, 2024
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Advanced Management Accounting Questions and Answers

Questions 1

A product requires one each of three different components.

Faulty components are identified only at the end of the manufacturing process.

The following average fault rates have been identified:

Component A – 1 in 100

Component B – 1 in 20

Component C – 1 in 10

The probability that a unit of finished product contains no faulty components is:










Questions 2

In order to support decision making, management accounting information categorizes costs in a variety of ways.

Responsibility accounting primarily distinguishes between costs on the basis that they are either:



sunk or opportunity costs


fixed or variable costs


controllable or uncontrollable costs


relevant or non-relevant costs

Questions 3

A company has invested $500,000 in developing a new product and requires a return of 12% on this investment.

The company has researched the market and has set the selling price for the new product at $300 per unit. At this price, sales volume for next year is forecast to be 500 units. The forecast unit cost is $210.

What is the target cost gap per unit for the coming year?

Give your answer to the nearest whole $.