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Gleim CMA Review
Updates to Part 1
16th Edition, 1st Printing
February 2013
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.
Study Unit 1 – Ethics for Management Accountants and Cost Management Concepts
Page 32, Subunit 1.6, 3.c.: This edit clarifies allocation of manufacturing costs using activity-based
costing.
c. Activity-based costing (ABC) attaches costs to activities rather than to physical goods first
assigns resource costs to activities. These activity costs are then assigned to physical
goods.
1) ABC is a response to the distortions of product cost information brought about by
peanut-butter costing, which is the inaccurate averaging or spreading of costs like
peanut butter over products or service units that use different amounts of resources.
a) A major cause of the problems associated with peanut-butter costing is the
significant increase in indirect costs brought about by the increasing use of
technology.
Study Unit 7 – Cost and Variance Measures
Page 267, Subunit 7.6, 2.3): This edit removes the word “efficiency” from the total.
Variable Overhead Variances
Static budget variable overhead
Flexible budget variable overhead
Actual variable overhead
Units
18,000
16,500
16,500
Machine
Hours
1.2
1.2
1.3
Variable overhead spending variance
AQ × (AP − SP)*
Variable overhead efficiency variance
SP × (AQ − SQ)**
Total variable overhead efficiency variances
Actual
Quantity
21,600
19,800
21,450
Rate
$ 8.00
$ 8.00
$10.00
Total
$172,800
$158,400
$214,500
$42,900 U
13,200 U
$56,100 U
*21,450 × ($10 − $8)
**$8 × (21,450 − 19,800)
Page 273, Subunit 7.8: This update corrects the multiple-choice question numbers for Study Unit 7.8.
Stop and review! You have completed the outline for this subunit. Study multiple-choice
questions 84 through 99 beginning 37 and 38 on page 288.
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