CMA Exam Tip #2: Time Management and the Various Difficulty Levels of Questions

Performing well on the Certified Management Accountant (CMA^®) exam requires knowledge, confidence, and, equally important, time management. The fact is, except for Part 4 (which consists of essays), a candidate has only about 90 seconds on average to spend on each question. While some questions can be answered in under a minute, others may seem downright impossible. Since each question is worth the same number of points regardless of its difficulty, the trick is to find the questions that can be answered quickly-But how? Following is a "three—pass technique," that can give the most correct answers in the least amount of time.

Pass 1: Read all the questions and answer all noncomputational ones. Mark any answers you are unsure about using the testing software’s "mark" feature, but be sure to answer all noncomputational ones, even if all you can do is guess.

Pass 2: Answer all computational questions (which should be all the questions left unanswered in Pass 1.) Don’t spend more than two minutes on any question. If necessary, guess and move on, marking any questions where you are unsure about your answer. By the end of this pass, you should have at least tried to answer all the exam questions.

Pass 3: In the remaining time, go back and review the "marked" questions. Spend your time on those questions where you simply need more time to get the correct answer rather than those where you have no idea how to proceed. Unmark questions that you won’t spend more time on, either because you are confident of your answer or because you will never do better than make a random guess.

Bear in mind that although all questions count equally, all questions aren’t at the same level of difficulty. The CMA exam presents questions at varying cognitive levels. While some questions demand simply a recall of material, others call for a sophisticated understanding and require the application of knowledge to a novel situation. Every question on the CMA exam is at one of the following levels:

Level A: This is the most basic cognitive level and includes items that test for knowledge (the recall of facts and ideas) and comprehension. A comprehension question often uses a situation as a way to present the idea. In order to the answer the question correctly, you must be able to recognize the principle demonstrated in the problem; memory alone won’t be sufficient. For example:

In the budgeting and planning process for a firm, which one of the following should be completed first?

a. Sales budget.
b. Financial budget.
c. Cost management budget.
d. Strategic plan.

(The answer is "D." Strategic planning drives all other planning and budgeting activities within the firm.)

Level B: This cognitive level tests for two things: (1) the application of material to novel situations and (2) the ability to analyze or break down information into its component parts.

Questions related to application measure a candidate’s ability to understand ideas or content to a point where they can be applied in a real-life situation. Similarly, questions involving application involve the ability to differentiate, discriminate, distinguish, infer, and determine the relevancy of data. For example:

A firm is considering the implementation of a lock-box collection system at a cost of $80,000 per year. Annual sales are $90 million, and the lock-box system will reduce collection time by three days. The firm currently is in debt for $3 million. If the firm can invest the funds designated for the lock-box at 8%, should it use the lock-box system? (Assume a 360-day year.)

a. Yes, it will produce a savings of $140,000 per year.
b. Yes, it will produce a savings of $60,000 per year.
c. No, it will produce a loss of $20,000 per year.
d. No, it will produce a loss of $60,000 per year.

(The answer is "C." Here you must identify data that are relevant to the problem, apply principles to determine savings or loss, and then make an analysis of the outcomes of the alternative courses of action.)

Level C: The most challenging cognitive level, questions at Level C require a candidate to judge the value of material for a given purpose, based on defined criteria. Questions at this level ask you to appraise, conclude, support, compare, contrast, interpret, and summarize information, as well as evaluate and recommend. For example:

Bennet Inc. is considering two mutually exclusive projects for its manufacturing business. Both projects require an initial outlay of $120,000 and are expected to have a useful life of four years. The company’s required rate of return is 10%, and the projected after-tax cash flows associated with these projects are as follows:

Assuming adequate funds are available, which of the following project options would you recommend?

a. Project X only.
b. Project Y only.
c. Project X and Y.
d. Neither project.

(The answer is A. Using a 10% required rate of return, the net present value of Project X = $126,800; and the net present value of Project Y = $125,310. Since Project X has the higher net present value and only one of the projects can be selected, you would recommend Project X.)

Parts 1, 2, and 3 of the CMA exam divide all questions into topic areas, with each topic area being assigned a Learning Level. Also of note: If a topic is designated a Level C, it means that it can include questions with Level C, B, or A. Similarly, Level B topics include questions at Level B or A. Level A topics include just Level A questions. Refer to your CMA Candidate Handbook, available at www.imanet.org/pdf/handbook.pdf, for further information.

In addition, candidates who want to converse online with others preparing to take the exam are encouraged to join the CMA Candidate List Serve. The list offers a great tool for candidates to share study tips, encourage one another, and obtain answers to questions. There is also an archives section, which allows access to previously discussed topics. To sign up to receive and send e-mail posts, please visit www.imanet.org/membership_communitites.asp.

To learn more about the content of the CMA Exam, visit the following links:

CMA Exam Content Specifications

CMA Exam Learning Outcome Statements

In the next issue: An Overview of Part 2 – and How to Guess Intelligently.