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Created on May 05, 2026 By

CA Sonal Saboo

CMA Inter

Inter Management Accounting PN-12 Quiz 1

This quiz is based on the CMA Management Accounting paper.
Each question is multiple-choice with 4 options, and only 1 option is correct.
Attempt the quiz to test your understanding of CMA MA concepts.

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Category: Management Accounting PN-12

1. An item for which cost measurement is required e.g. product, job or a customer

a. Cost Pool

b. Cost Driver

c. Cost Absorption

d. Cost Object

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Category: Management Accounting PN-12

2. Which of the following would not be deducted from sales in a management report prepared using ABC?

a. Direct materials

b. Direct labour

c. Variable selling and administration costs

d. Shipping costs

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Category: Management Accounting PN-12

3. In an ABC system, the allocation bases that are used for applying costs to services or procedures are called:

a. Cost Pool

b. Cost Driver

c. Cost Absorption

d. Cost Object

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Category: Management Accounting PN-12

4. In Activity Based Costing

a. Non-manufacturing costs may not be assigned to products

b. Some manufacturing costs may be excluded from product costs

c. Allocation bases are the same as those used in traditional costing methods

d. Similar to traditional costing, ABC only uses one overhead cost pool

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Category: Management Accounting PN-12

5. Assigning overhead using ABC often:

a. Shifts overhead costs from high-volume products to low-volume products

b. Shifts overhead costs from low-volume products to high-volume products

c. Provides the same results as traditional costing

d. Requires one predetermined overhead rate

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Category: Management Accounting PN-12

6. Which of the following is not included in batch level activities?

a. Material ordering cost

b. Machine set-up cost

c. Inspection cost

d. Designing the product

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Category: Management Accounting PN-12

7. Which of the following activities is not a batch level activity?

a. Processing purchase orders

b. Designing products

c. Receive raw materials from suppliers

d. Setting up equipment

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Category: Management Accounting PN-12

8. Activity based costing

a. Uses a plant wide overhead rate to assign overhead

b. Is not expensive to implement

c. Typically applies overhead costs using direct labour hours

d. Uses multiple activity rates

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Category: Management Accounting PN-12

9. In an ABC system, which of the following is likely to be classified as a batch level activity?

a. Machine set-up

b. Product design

c. Inspection of every item produced

d. Production manager’s work

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Category: Management Accounting PN-12

10. According to the Chartered Institute of Management Accountants (CIMA), cost attribution to cost units on the basis of benefits received from indirect activities e.g. ordering, setting up, and assuring quality is known as:

a. Absorption costing

b. Marginal costing

c. Activity-based costing

d. Job costing

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Category: Management Accounting PN-12

11. Which of the following characteristics would be an indicator that a company would benefit from switching to activity based costing?

a. Only one homogenous product is produced on a continuous basis

b. The existing cost system is reliable and has produced excellent results

c. Overhead costs are high and increasing and no one seems to know why

d. The costs of implementing ABC out-weigh the benefits

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Category: Management Accounting PN-12

12. Which of the following is a correct definition of activity-based management?

a. An approach to the costing and monitoring of activities which involves tracing resource consumption and costing final outputs. Resources are assigned to activities and activities to cost objects based on consumption estimates. The latter utilize cost drivers to attach activity costs to outputs.

b. The identification and evaluation of the activity drivers used to trace the cost of activities to cost objects. It may also involve selecting activity drivers with potential to contribute to the cost management function with particular reference to cost reduction

c. A method of budgeting based on an activity framework and utilizing cost driver data in the budget- setting and variance feedback processes.

d. A system of management which uses activity-based cost information for a variety of purposes including cost reduction, cost modeling and customer profitability analysis

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Category: Management Accounting PN-12

13. The primary objective of Management Accounting is to _______________.

a. maximize profits

b. minimize losses

c. maximize profits or minimize losses

d. All of the above

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Category: Management Accounting PN-12

14. Management Accounting is concerned with accounting information, which is useful to the management — This definition is given by ______________.

a. Robert N. Antho

b. Brown and Howard

c. CIMA

d. The Institute of Chartered Accountants of England and Wales

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Category: Management Accounting PN-12

15. Management accounting is concerned with data collection from _____________.

a. internal sources

b. external sources

c. internal and external sources

d. None

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Category: Management Accounting PN-12

16. Management accounting with specific focus on environmental issues is becoming increasingly important in organizations as environmental costs are large in many organisations. There are three specific reasons for this, which are___________________.

a. Environmental costs are often high in the many manufacturing organisations

b. Regulatory requirements often impose huge fines for non-compliance

c. Both 1 and 2

d. Companies are increasingly realizing that being socially and environmentally responsible declines their image and this has positive impact on their bottom line.

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Category: Management Accounting PN-12

17. Management accounting information helps managers formulate strategy by answering which of the following questions?

a. Who are the most important customers, and how can the company deliver value to the customers?

b. What is most critical capability of the company which may be technology, production, or marketing?

c. How can we leverage it for new strategic initiatives?

d. All of the above

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Category: Management Accounting PN-12

18. __________________ criteria are a set of standards for a company’s behaviour used by socially conscious investors to screen potential investments.

a. JIT

b. AMT

c. ESG

d. ABC

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Category: Management Accounting PN-12

19. ‘Period of lost relevance’ is the of the evolution of management accounting.

a. 1st stage

b. 2nd stage

c. 3rd stage

d. 4th stage

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20. Management accounting assists the management in

a. Planning

b. Directing

c. Controlling

d. All of the above

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Category: Management Accounting PN-12

21. The purpose of management accounting is to help make decisions

a. Managers

b. Investors

c. Marketers

d. Banks

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Category: Management Accounting PN-12

22. is the study of managerial aspects of financial accounting _________________.

a. Cost accounting

b. Financial accounting

c. Management accounting

d. Business accounting

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Category: Management Accounting PN-12

23. The main objective of management accounting is ___________________.

a. To maintain the accounting records

b. To know the amount due from customers and suppliers

c. To ascertain analyse and interpret the results of business operations

d. To record all the business transactions

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Category: Management Accounting PN-12

24. Management accounting can be viewed as________________.

a. Marketing-oriented Accounting

b. Management-oriented Accounting

c. Accounting-oriented Management

d. Manager-oriented Accounting

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Category: Management Accounting PN-12

25. Management Accounting __________________.

a. Accumulates, summarizes and analyses the available data.

b. Is primarily concerned with the requirements of the management.

c. Makes Corporate Planning and Strategy effective.

d. All of the above

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Inter PN-12 Management Accounting Quiz 1

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