How many questions are on the CPA Canada Core 2 exam?

The Core 2 final exam is four hours and includes approximately 75 objective-format questions, which include multiple choice and other objective types, plus one 60-minute integrative case. CPA Canada does not fix an exact published count for every writing.

Is the CPA Core 2 exam multiple choice?

The objective portion uses multiple choice along with other objective formats such as matching and short numeric answers. The separate 60-minute integrative case requires a written response. Our free practice bank focuses on the fully MCQ-preppable objective knowledge.

What is the passing score for CPA Core 2?

CPA Canada does not publish a fixed passing percentage. Candidates must demonstrate competence across the objective questions and the integrative case, evaluated through the CPA Board of Examiners standard-setting process.

Do I need to pass Core 1 before Core 2?

Yes. Core 1 (Financial Accounting and Reporting) is the prerequisite module and must be completed successfully before challenging Core 2 in the CPA Professional Education Program.

How much study time does CPA Core 2 require?

The module runs about eight weeks, and candidates commonly invest 150-200 hours on readings, online quizzes, practice cases, integrated problems, and mock exams, with most time spent on Management Accounting.

Is the exam based on the syllabus or the Competency Map?

The exam is based on the CPA Competency Map rather than only the module syllabus, so some tested topics may not appear in the practice cases or integrated problems. Broad competency coverage is recommended.

How much does CPA Core 2 cost?

Module and exam fees are set by each provincial or regional CPA delivery body, such as CPA Western School of Business or CPA Ontario, so confirm current pricing with the body that administers your program.

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100+ Free CPA Canada Core 2 Practice Questions

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Question 1

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A company sells two products in a fixed sales mix of 3 units of X to 1 unit of Y. X has a CM of $10 and Y has a CM of $30. What is the weighted-average contribution margin per unit of the mix?

$40

$15

$20

$10

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2026 Statistics

Key Facts: CPA Canada Core 2 Exam

4 hours

Exam Duration

CPA Canada Core Modules

~75

Objective Questions

CPA PEP Core 2 Format

60 min

Integrative Case

CPA PEP Core 2 Format

50-70%

Management Accounting Weight

Core Modules Blueprint

15-20%

Finance Weight

Core Modules Blueprint

8 weeks

Module Length

CPA PEP

CPA PEP Core 2 is a 4-hour module final exam with roughly 75 objective-format questions (multiple choice and other objective types) plus one 60-minute integrative case. The exam is weighted heavily toward Management Accounting (about 50-70%), followed by Finance (about 15-20%), with Strategy and Governance and a small Financial Reporting component integrated throughout. Assessment follows the CPA Competency Map rather than only the syllabus, so candidates may see topics not explicitly covered in module practice. There is no fixed published passing percentage; competence is determined through CPA Board of Examiners standard setting, and fees are set by each regional CPA delivery body.

Sample CPA Canada Core 2 Practice Questions

Try these sample questions to test your CPA Canada Core 2 exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1A company sells a product for $40 per unit with variable costs of $24 per unit. Fixed costs are $96,000. How many units must be sold to break even?

A.6,000 units

B.16,000 units

C.2,400 units

D.4,000 units

Explanation: The contribution margin per unit is $40 - $24 = $16. Break-even units = Fixed costs / CM per unit = $96,000 / $16 = 6,000 units. At this volume total contribution exactly covers fixed costs and profit is zero.

2Under a contribution-margin income statement, which cost behaviour classification is used to organize expenses?

A.By function (cost of goods sold vs. operating)

B.By variable vs. fixed behaviour

C.By controllable vs. non-controllable

D.By product vs. period

Explanation: A contribution-margin (variable costing) income statement separates costs by behaviour: variable costs are deducted from sales to derive contribution margin, then fixed costs are deducted to reach operating income. This format supports CVP and decision analysis.

3A firm has a contribution margin ratio of 40% and fixed costs of $200,000. What sales revenue is required to earn a target operating income of $80,000?

A.$280,000

B.$500,000

C.$700,000

D.$560,000

Explanation: Required sales = (Fixed costs + Target income) / CM ratio = ($200,000 + $80,000) / 0.40 = $280,000 / 0.40 = $700,000. The CM ratio converts required total contribution into required revenue.

4Under activity-based costing (ABC), overhead is assigned to products primarily based on:

A.The relative sales revenue of each product line

B.Direct material cost as the sole allocation base

C.A single plant-wide rate using direct labour hours

D.Cost drivers that capture the activities consumed by each product

Explanation: ABC assigns overhead to cost pools by activity (e.g., setups, inspections, machine hours) and allocates each pool using a cost driver that reflects actual resource consumption. This improves accuracy for products that consume activities disproportionately to volume.

5A company budgeted 10,000 units but produced 9,000. Budgeted fixed manufacturing overhead was $120,000. Using a denominator of 10,000 budgeted units, what is the fixed overhead production-volume variance?

A.$12,000 unfavourable

B.$12,000 favourable

C.$120,000 unfavourable

D.Zero

Explanation: The fixed overhead rate is $120,000 / 10,000 = $12 per unit. Volume variance = (Budgeted units - Actual units) x rate = (10,000 - 9,000) x $12 = $12,000 unfavourable, because fewer units absorbed the budgeted fixed overhead.

6Standard direct materials are 3 kg per unit at $5/kg. The company produced 2,000 units using 6,300 kg costing $30,240. What is the direct materials price (rate) variance?

A.$1,260 unfavourable

B.$1,260 favourable

C.$1,500 unfavourable

D.$240 favourable

Explanation: Actual price = $30,240 / 6,300 = $4.80/kg. Price variance = (Standard price - Actual price) x Actual quantity = ($5.00 - $4.80) x 6,300 = $1,260 favourable, because the firm paid less than standard per kilogram.

7Which costing approach treats fixed manufacturing overhead as a period cost expensed when incurred, rather than as part of inventory?

A.Standard costing

B.Absorption costing

C.Variable (direct) costing

D.Activity-based costing

Explanation: Variable costing includes only variable manufacturing costs in inventory and expenses all fixed manufacturing overhead in the period incurred. Absorption costing, required for external IFRS/ASPE reporting, capitalizes fixed overhead into inventory.

8In a period where production exceeds sales, operating income under absorption costing compared with variable costing will generally be:

A.Identical, because both expense the same total costs

B.Lower, because variable costs are deferred

C.Lower, because more fixed overhead is expensed

D.Higher, because fixed overhead is deferred in ending inventory

Explanation: When production exceeds sales, inventory rises and absorption costing defers a portion of fixed manufacturing overhead in ending inventory rather than expensing it. This makes absorption-costing income higher than variable-costing income for the period.

9A company can sell 5,000 units of a special order at $18 each. Variable cost is $13 per unit and there is idle capacity. Avoidable fixed costs of the order are $8,000. Should the order be accepted on financial grounds?

A.Accept; it adds $17,000 to operating income

B.Reject; it reduces income by $8,000

C.Accept; it adds $25,000 to operating income

D.Reject; the $18 price is below full cost

Explanation: With idle capacity, only incremental costs are relevant. Incremental contribution = 5,000 x ($18 - $13) = $25,000, less avoidable fixed costs of $8,000 = $17,000 net benefit. The order should be accepted.

10Which of the following is a sunk cost in a decision to replace an old machine?

A.The resale value of the old machine

B.The original purchase price of the old machine

C.The operating cost savings from the new machine

D.The purchase price of the new machine

Explanation: A sunk cost is a past outlay that cannot be changed by any current decision. The original purchase price of the old machine has already been incurred and is irrelevant to the replacement decision. Its current resale value, however, is relevant.

About the CPA Canada Core 2 Practice Questions

Verified exam format metadata for CPA PEP Core 2: Management Accounting, Planning and Control is pending. The practice questions above remain available while official exam length, timing, passing score, fee, and administrator details are reviewed.