Free IMANET FMAA Exam Questions

Question 1

A specialty instrument manufacturer is in the process of establishing a cost system. The company produces machines that are unique and distinctive. These machines are produced when purchase requests are received from customers. Although some common parts and sub-assemblies are to be held in inventory, no finished goods inventory is maintained since each purchase request is for a customized specialty instrument. The type of cost accumulation system that would be best suited for this type of environment would be

A : Batch-level costing.

B : Process costing.

C : Job-order costing.

D : Backflush costing.

Answer: C

Question 2

Contribution margin focuses on which one of the following?

A : The amount of revenue available to cover fixed costs.

B : The total variable manufacturing costs.

C : How competitive a company is compared to other companies.

D : The total revenue expected during the year.

Answer: A

Question 3

Budgets are a necessary component of financial decision making because they help provide a(n)

A : means to use all the firm's resources

B : means to check managerial discretion

C : automatic corrective mechanism for errors

D : efficient allocation of resources

Answer: D

Question 4

A specialty instrument manufacturer is in the process of establishing a cost system. The company produces machines that are unique and distinctive. These machines are produced when purchase requests are received from customers. Although some common parts and sub-assemblies are to be held in inventory, no finished goods inventory is maintained since each purchase request is for a customized specialty instrument. The type of cost accumulation system that would be best suited for this type of environment would be