CIMAPRO17-BA2-X1-ENG Online Practice Questions and Answers

DRAG DROP

A company manufactures three products using the same direct labour which will be in short supply next month. No inventories are held. Data for the three products are as follows:

The fixed costs are all committed costs and cannot now be altered for the next month.

Place the labels against the correct product to indicate the order of priority for manufacture that will maximise the profit for the next month.

Select and Place:

Which of the following is NOT a valid purpose of budgeting?

A. To communicate targets to managers.

B. To comply with financial reporting requirements.

C. To coordinate the different activities of an organisation.

D. To authorise managers to incur expenditure.

Based upon extensive historical evidence, a company's daily sales volume is known to be normally distributed with a mean of 1,728 units and a standard deviation of 273 units. What is the probability that, on any one day, the sales volume will be at least 1,300 units?

A. 5.82%

B. 73.89%

C. 44.18%

D. 94.18%

A project is about to be launched. Two of the three possible outcomes and their associated probabilities are as follows:

The remaining possible outcome is a $70,000 gain.

What is the correct calculation of the expected value of the project?

A. ($30,000 + $70,000 - $25,000) / 3

B. ($30,000 + $70,000 - $25,000) x (0.7 + (1.0 - (0.2 + 0.7)) + 0.2)

C. ($30,000 x 0.7) + ($70,000 x (1.0 - (0.2 + 0.7))) + ($25,000 x 0.2)

D. ($30,000 x 0.7) + ($70,000 x (1.0 - (0.2 + 0.7))) - ($25,000 x 0.2)

A company is appraising two projects. Both projects are for five years. Details of the two projects are as follows.

Based on the above information, which of the following statements is correct?

A. An annuity could be used to calculate the net present value of the projects.

B. The annuity factor for project A would be lower than the annuity factor for the project B.

C. A perpetuity could be used to calculate the net present value of the projects.

D. The annuity factor for project A would double the annuity factor for project B.

Which of the following is NOT a characteristic of useful operational level information?

A. Sufficiently accurate.

B. Focused on the decision to be made.

C. Available immediately.

D. Governed by financial reporting standards.

Which THREE of the following are included in the Global Management Accounting Principles? (Choose three.)

A. Accountability

B. Influence

C. Value

D. Professional behaviour

E. Relevance

F. Integrity

An organisation's management report contains the following data:

Which division has the highest operating margin percentage?

A. Division A

B. Division B

C. Division C

D. Division D

Which THREE of the following are parts of the master budget? (Choose three.)

A. Finished goods inventory budget.

B. Budgeted statement of profit or loss.

C. Cash flow budget.

D. Sales budget.

E. Administration overhead budget.

F. Budgeted statement of financial position.

A company has spent $5,000 on a report into the viability of using a subcontractor. The report highlighted the following:

A machine purchased six years ago for $30,000 would become surplus to requirements. It has a written-down value of $10,000 but would be resold for $12,000.

A machine operator would be made redundant and would receive a redundancy payment of $40,000.

The administration of the subcontractor arrangement would cost the company $25,000 each year.

Which THREE of the following are relevant for the decision? (Choose three.)

A. A relevant cost of $5,000 for the viability report.

B. A relevant cost of $30,000 for the machine.

C. A relevant cost of $40,000 for the redundancy payment.

D. A relevant cost of $10,000 for the machine.

E. A relevant cost of $25,000 each year for administration.

F. A relevant revenue of $12,000 for the machine.