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Gleim CMA Review
Updates to Part 1
15th Edition, 2nd Printing
January 20, 2012
NOTE: Text that should be deleted from the outline is displayed with a line through the text.
New text is shown with a blue background.
Introduction – Preparing for and Taking the CMA Exam
The following edits correct information about the Certification Entrance Fee.
Page 3 (This text was previously updated in the August 26, 2011, update.)
Requirements to Attain the CMA Designation
The CMA designation is granted only by the ICMA. Candidates must complete the following
steps to become a CMA:
1.
Become a member of the IMA [$195 ($210 beginning September 1, 2011) per year for
regular membership].
2.
Register for the exam and pay the exam entrance fee ($200 225 for domestic/international
members, $75 for student/academic members).
3.
Pass both parts of the exam within 3 years ($350 registration fee per part).
4.
Satisfy the education requirement (bachelor’s degree in any area from an accredited
institution).
5.
Satisfy the experience requirement [2 years (continuous) of professional experience].
6.
Comply with the IMA Statement of Ethical Professional Practice.
Upon completion of all requirements, the ICMA will issue a numbered CMA certificate. To keep
the certificate, a CMA must (1) maintain active membership in the IMA, (2) fulfill the requirements for
continuing professional education, and (3) continue to comply with the IMA Statement of Ethical
Professional Practice.
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Page 7
How to (1) Apply and (2) Register for the CMA Exam
First, you are required to apply both for membership in the IMA and for admission into the
Certification Program (see sample application form in Appendix A on pages 518 and 519).
Apply to join the IMA and the Certification Program today -- it takes only a few minutes.
Application to the ICMA requires education, employment, and reference data. The educational and
experience requirements are discussed beginning on page 3. You must provide two references if
requested: one from your employer and the second from someone other than a family member or
fellow employee. An official transcript providing proof of graduation is also required after you have
completed the exams. There is a $200 225 Certification Entrance Fee ($75 for students and
academics), and everyone who enters the certification program receives 6 month’s access to sample
questions and answers and the CMA Assessment Tool. Once a person has become a candidate,
(s)he must register for an exam part within the first 12 months or repay the entrance fee. Also, there
is no participant’s fee other than IMA membership dues, unless a candidate does not register for a
part within 12 months or complete the exam within 3 years, in which case the entrance fee must be
paid again to take the exam.
Second, it is necessary to register each time you wish to sit for the exams. The exam
registration form (see pages 520 and 521) is very simple and takes about 2 minutes to complete. The
registration fee for each part of the exam is $350. North American student and academic members,
as well as any candidate taking two parts in one window, have a discount price. See the table below
for a concise listing of fees. If you register for a specific testing window and fail to take the exam, you
must register again and repay the full registration fee.
Entrance Fee
Exam Fee
One Part/Window
Exam Fee
Both Parts/Window
Regular
$200 225
$350
$300
Student
$75
$175
$150 $125
Academic
$75
$175
$150 $125
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Study Unit 5 – Cost Allocation Techniques
Page 240, Subunit 5.3, 9.c.: We modified the outline because, although extended normal
costing is sometimes called standard costing, standard costing and extended normal
costing are different.
c. Extended normal costing applies the use of a normalized rate to direct costs as well as
to manufacturing overhead.
1) Also called standard costing, this technique is discussed in detail in Study Unit 7.
Page 276, Essay Question 1, 2 – Unofficial Answers, 1.: This essay was edited to correct the
order of operations in an equation.
1. Calculate the cost and volume differentials to determine the variable overhead rate:
$34,500,000
2,760,000
$34,500,000
2,760,000
–
–
–
$29,880,000
2,160,000
$29,880,000
2,160,000
=
$4,620,000
600,000
=
$4,620,000
600,000
=
$7.70/direct labor hour
Total overhead -- Year 1
Less: variable overhead -- Year 1 (2,760,000 × $7.70)
Annual fixed overhead
Projected variable overhead (2,300,000 × $7.70)
Add: annual fixed overhead
Projected total overhead
$34,500,000
(21,252,000)
$13,248,000
$17,710,000
13,248,000
$30,958,000
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Study Unit 7 – Cost and Variance Measures
Page 360, Subunit 7.6, Question 49: This question was edited because the variance
described ignores efficiency variances.
Questions 49 and 50 are based on the following
information. Tiny Tykes Corporation had the following
activity relating to its fixed and variable overhead for the
month of July:
Actual costs
Fixed overhead
Variable overhead
Flexible budget
(Actual output achieved inputs ×
budgeted rate)
Variable overhead
Applied
(Standard input allowed for actual
output achieved × budgeted rate)
Fixed overhead
Variable overhead spending variance
Production volume variance
$120,000
80,000
90,000
125,000
2,000 F
5,000 U
49. If the budgeted rate for applying variable overhead was
$20 per direct labor hour, how efficient or inefficient was Tiny
Tykes Corporation in terms of using direct labor hours as an
activity base?
A. 100 direct labor hours inefficient.
B. 100 direct labor hours efficient.
C. 400 direct labor hours inefficient.
D. 400 direct labor hours efficient.
Answer (D) is correct. (CMA, adapted)
REQUIRED: The efficiency variance stated in terms of
direct labor hours.
DISCUSSION: The variable overhead spending and
efficiency variances are the components of the total variable
overhead variance. Given that actual variable overhead was
$80,000 and the flexible budget amount variable overhead
based on the budgeted rate was $90,000, the total variance
is $10,000 favorable. If the overhead spending variance is
$2,000 favorable, the efficiency variance must be $8,000
favorable ($10,000 total – $2,000 spending). At a rate of $20
per hour, this variance is equivalent to 400 direct labor hours
($8,000 ÷ $20).
Answer (A) is incorrect. The variances are favorable.
Answer (B) is incorrect. The number of 100 direct labor hours
are equivalent to the spending variance (100 hours × $20 =
$2,000). Answer (C) is incorrect. The variances are
favorable.
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