CMA Accounting Exam Questions & Answers 2026 (21–30)

Question 1

Kaizen budgeting incorporates:

TheoryPractice · Accepted Answer

Continuous improvement and cost reduction targets into the budget. Kaizen budgeting builds expected continuous-improvement cost reductions directly into budgeted figures for each successive period.

Question 2

Activity-based budgeting builds the budget by:

TheoryPractice · Accepted Answer

Estimating the cost of activities needed to produce budgeted output. ABB starts with output demand, determines the activities required, and budgets resources based on activity cost drivers rather than department line items.

Question 3

Budgeted sales are 10,000 units at $20. Variable cost is $12/unit and fixed costs are $50,000. Budgeted operating income is:

TheoryPractice · Accepted Answer

$30,000. Contribution margin = (20-12) x 10,000 = $80,000. Operating income = $80,000 - $50,000 fixed = $30,000.

Question 4

Production is budgeted at 5,000 units, each requiring 0.5 labor hours at $18/hour. Budgeted direct labor cost is:

TheoryPractice · Accepted Answer

$45,000. Direct labor cost = 5,000 units x 0.5 hr x $18 = $45,000.

Question 5

A standard cost is best described as:

TheoryPractice · Accepted Answer

A carefully predetermined cost that should be attained. Standard costs are predetermined benchmarks for what a unit should cost under efficient conditions, used as a basis for budgeting and variance analysis.

Question 6

Building budgetary slack is most likely when:

TheoryPractice · Accepted Answer

Managers' performance evaluations are tightly tied to meeting their own self-set budgets. When rewards depend on beating self-set targets, managers are tempted to lowball revenue or pad costs, creating slack.

Question 7

In time-series forecasting, the systematic, calendar-related up-and-down pattern within a year is the:

TheoryPractice · Accepted Answer

Seasonal component. Seasonality refers to recurring within-year patterns tied to the calendar (e.g., holiday sales), distinct from the longer-term trend and multi-year cyclical effects.

Question 8

A capital budget primarily addresses:

TheoryPractice · Accepted Answer

Long-term investments in property, plant, and equipment. The capital budget plans major long-term asset acquisitions and projects, evaluated with techniques such as NPV and IRR.

Question 9

The financial budgets within a master budget typically include all EXCEPT the:

TheoryPractice · Accepted Answer

Sales budget. The sales budget is an operating budget; financial budgets focus on cash, capital spending, and the budgeted balance sheet.

Question 10

In simple linear regression of total cost on units, the intercept term best estimates:

TheoryPractice · Accepted Answer

Fixed cost. The regression equation Y = a + bX gives 'a' (intercept) as estimated fixed cost and 'b' (slope) as variable cost per unit.

CMA Accounting Exam Questions & Answers 2026 (21–30)

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