Accountant CMA Exam Questions And

California Certified Management Accountant (CMA) Exam Questions And Correct Answers (Verified Answers) Plus Rationales 2025 Q&A | Instant Download Pdf

• What is the primary purpose of variance analysis in managerial

accounting?

• Forecasting future sales
• Identifying deviations from standards
• Preparing financial statements
• Calculating taxes

Variance analysis helps managers identify areas where performance deviates from the plan, allowing corrective actions.

• A company’s fixed costs are $100,000 and the contribution margin per

unit is $50. What is the breakeven point in units?

• 1,000 units
• 2,000 units 1 / 4

• 5,000 units
• 10,000 units

Breakeven = Fixed Costs ÷ Contribution Margin = $100,000 ÷ $50 = 2,000 units.

• What type of budgeting starts from zero and justifies each expense?
• Incremental budgeting
• Rolling budgeting
• Zero-based budgeting
• Static budgeting

Zero-based budgeting requires justification for all expenses, not just incremental changes.

• The balanced scorecard includes all of the following perspectives

EXCEPT:

• Customer
• Internal processes
• Legal compliance
• Learning and growth

Legal compliance is not one of the four core perspectives of the balanced scorecard.

• What is the formula for Return on Investment (ROI)?
• Net income ÷ Total assets
• Operating income ÷ Average invested capital 2 / 4

• Gross profit ÷ Net sales
• Net income ÷ Equity

ROI evaluates performance by comparing operating income to the capital invested.

6. A budget that adjusts for varying levels of activity is called:

• Static budget
• Flexible budget
• Rolling budget
• Master budget

Flexible budgets allow comparison at different levels of actual activity.

• What is the primary limitation of the payback period method?
• Difficult to calculate
• Ignores time value of money
• Requires future projections
• Ignores initial investment

Payback period is simple but does not consider the time value of money.

• What financial ratio is used to assess a company’s short-term

liquidity?

• Debt-to-equity ratio
• Return on assets
• Current ratio
• Gross margin 3 / 4

Current ratio = Current assets ÷ Current liabilities; it shows short-term liquidity.

• Which cost is most likely to be classified as a variable cost?
• Rent
• Direct materials
• Insurance
• Salaries

Direct materials vary with production levels and are variable costs.

• What type of cost remains constant per unit but changes in total

with activity?

• Mixed cost
• Variable cost
• Fixed cost
• Step cost

Variable costs change in total with activity but remain constant per unit.

• Which technique is used to assess risk in capital budgeting?
• Contribution margin
• Sensitivity analysis
• Net working capital
• Operating leverage

Sensitivity analysis examines how different values of an independent variable affect a dependent variable.

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