Free IMA CMA Part 1 (Financial Planning, Performance, and Analytics) Performance Management Practice Questions
Performance Management on CMA Part 1 covers cost-volume-profit analysis, variance analysis (direct materials, direct labor, factory overhead, sales-mix and sales-quantity), responsibility centers (cost, revenue, profit, investment), key performance indicators, balanced scorecard, and segment reporting. Variance analysis is a frequently tested computational area.
159 questions60 easy65 medium34 hard2026 syllabus
Sample Questions
Question 1
Easy
Which of the following best describes an investment center?
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Correct Answer: A
Solution
A is correct. An investment center is a responsibility center whose manager is accountable for revenues, costs, and the capital (asset) investment used by the segment. Performance is typically evaluated using ROI, residual income, or EVA.
Question 2
Medium
Which of the following performance measures would most appropriately be classified under the internal business process perspective of a balanced scorecard?
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Correct Answer: C
Solution
C is correct. The internal business process perspective measures the efficiency and effectiveness of internal operations that create value for customers, including manufacturing cycle time, defect rates, on-time delivery, and order fulfillment time. Cycle time directly captures how quickly the firm converts inputs into finished output ready for the customer, making it a core internal-process metric.
Question 3
Hard
A company's standard cost for direct materials is 3 pounds per unit at $4.00 per pound. During the period, the company produced 5,000 units and used 16,000 pounds of material at a total cost of $62,400. What is the total direct materials variance (price plus quantity)?
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Correct Answer: C
Solution
C is correct. Actual price per pound = $62,400/16,000=$3.90. Standard quantity allowed = 5,000×3=15,000 pounds. Price variance = ($3.90−$4.00)×16,000=$1,600 favorable. Quantity variance = (16,000−15,000)×$4.00=$4,000 unfavorable. Total variance = $4,000 U−$1,600 F=$2,400 unfavorable. Equivalently, actual cost $62,400 minus standard cost allowed 15,000×$4=$60,000 equals $2,400 unfavorable.
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