CMA Exam Practice Questions
To provide candidates with a brief view of some of the types of questions on the CMA® (Certified Management Accountant) exam, below are five questions, with correct answers and explanations for each.
You can also check out these additional practice multiple-choice and essay questions (in PDF format) and try the interactive practice quiz, available on the IMA® (Institute of Management Accountants) website, to test your skills and expertise.
CMA Exam Part 1:
1. Richter Company has an unfavorable materials efficiency (usage) variance for a particular month. Which one of the following is least likely to be the cause of this variance?
- Inadequate training of direct labor employees.
- Poor performance of shipping employees.
- Poor design of the production process or product.
- Poor quality of raw materials.
- Correct answer b. Employees in the shipping department have nothing to do with the amount of material used in the production process. All of the other answers could affect the quantity of material used.
2. In situations where it is crucial that data be entered correctly into an accounting information system, the best method of data control would be to use
- key verification.
- compatibility tests.
- limit checks
- reasonableness tests.
- Correct answer a. Key verification is a data control. A record’s key is the group of values that uniquely identify the record. No application process should be able to alter the data in these key fields.
CMA Exam Part 2:
3. All of the following are included when calculating the acid test ratio except
- six-month Treasury bills.
- prepaid insurance.
- accounts receivable.
- 60-day certificates of deposit.
- Correct answer b. The purpose of the acid test ratio is to measure debt-paying ability using highly liquid assets. Items such as prepaid insurance may be excluded as they do not represent current cash flow.
4. Ticker Company sells two products. Product A provides a contribution margin of $3 per unit, and Product B provides a contribution margin of $4 per unit. If Ticker’s sales mix shifts toward Product A, which one of the following statements is correct?
- The total number of units necessary to break even will decrease.
- The overall contribution margin ratio will increase.
- Operating income will decrease if the total number of units sold remains constant.
- The contribution margin ratios for Product A and Product B will change.
- Correct answer c. If Ticker’s sales mix shifts toward Product A, operating income will decrease if the number of units sold remains constant. Since Product A’s contribution margin is lower than Product B’s, there will be less contribution toward covering fixed costs, resulting in lower operating income.
5. A German clothing retailer sells its products mainly online to customers worldwide. Company management believes that its primary risk relates to problems with its online website. A secondary risk is exchange rate volatility. Which one of the following best categorizes the company’s primary risk and secondary risk?
- Strategic risk, financial risk.
- Hazard risk, operational risk.
- Operational risk, hazard risk.
- Operational risk, financial risk.
- Correct answer d. Website problems relate to losses incurred from inadequate or failed internal processes and systems, which are classified as operational risk. Exchange rate risk is an example of financial risk.