To provide candidates with a brief view of some of the types of questions on the CMA® (Certified Management Accountant) exam, following are five questions – with correct answers and explanations for each. 

You can also check out these additional practice multiple-choice and essay questions to test your CMA knowledge.

CMA Exam Part 1:

1. The concurrent action of basic competitive forces as defined by Porter’s 5 forces model determines the

a. strategy that a firm should follow to achieve its objectives.
b. rivalry inside the industry.
c. entrance barriers that potential players must face to get into the industry.
d. long-term profitability and the competitive intensity of the industry.

Correct answer d.
Michael Porter developed a comprehensive model of the structure of industries and competition. One feature is his analysis of the five competitive forces that determine long-term profitability measured by long-term return on investment. This analysis determines the attractiveness of an industry.

2. The marketing manager of Ames Company has learned the following about a new product that is being introduced by Ames. Sales of this product are planned at $100,000 for the first year. Sales commission expense is budgeted at 8% of sales plus the marketing manager’s incentive budgeted at an additional 0.5%. The preparation of a product brochure will require 20 hours of marketing salaried staff time at an average rate of $100 per hour, and 10 hours, at $150 per hour, for an outside illustrator’s effort. The variable marketing cost for this new product would be

a. $8,000.
b. $8,500.
c. $10,000.
d. $10,500.

Correct answer b.
The variable marketing cost would include the 8% sales commission plus the 0.5% manager’s incentive, 8.5% x $100,000 = $8,500.

3. Which one of the following options allow multiple employees to use a browser to remotely access and use one application software?

a. Virtualization.
b. Cloud computing.
c. Distributed ledger.
d. Blockchain.

Correct answer b.
Cloud computing is the process of using a browser to remotely access software, data storage, hardware, and applications.

CMA Exam Part 2:

4. The owner of a chain of grocery stores has bought a large supply of mangoes and paid for the fruit with cash. This purchase will adversely impact which of the following?

a. Working capital.
b. Current ratio.
c. Quick or acid test ratio.
d. Price earnings ratio.

Correct answer c.
The purchase will adversely affect the quick ratio by reducing the cash balance. Since inventory is not included in the quick ratio, the change in inventory will not offset the reduction in cash.

5. Aril Industries is a multiproduct company that currently manufactures 30,000 units of Part 730 each month for use in production. The facilities now being used to produce Part 730 have fixed monthly overhead costs of $150,000 and a theoretical capacity to produce 60,000 units per month. If Aril were to buy Part 730 from an outside supplier, the facilities would be idle and 40% of fixed costs would continue to be incurred. There are no alternative uses for the facilities. The variable production costs of Part 730 are $11 per unit. Fixed overhead is allocated based on planned production levels.

If Aril Industries continues to use 30,000 units of Part 730 each month, it would realize a net benefit by purchasing Part 730 from an outside supplier only if the supplier’s unit price is less than 

a. $12.00.
b. $12.50.
c. $13.00.
d. $14.00.

Correct answer d.
For Aril to benefit from purchasing the units rather than making the units, the purchase price must be less than $14 as shown below.

Remaining fixed cost/unit = ($150,000 x .6) ÷ 30,000 = $3
Relevant cost to make unit = $3 + $11 = $14