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CMA Online Practice Questions and Answers

Questions 4

The management of an organization has stated that two members of the same family may not be employed in the same department. Identify the component of organization planning that is being demonstrated by management's action.

A. A strategy

B. A policy

C. An objective

D. A mission statement.

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Questions 5

The elements of the marketing mix from the seller's perspective are known as the 4 Ps. Each class of marketing tools corresponds to one of the following 4 Cs, the classes of customer benefits. Which of the following is a correspondence between a customer's 4 Cs and a seller's 4Ps?

A. Customer solution - Price

B. Convenience – Place

C. Customer cost – Perception

D. Communication – Process

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Questions 6

The dominant firm in a market pursues a market-leader strategy. This strategy may involve

A. Holding the market stable to avoid attracting new competitors

B. A flank defense to strengthen the firm's brand

C. Sending market signals as a mobile defense

D. Innovations as an offensive strategy

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Questions 7

Which of the following is a factor in the choice of strategy in a declining industry?

A. Likelihood of an industry produce profits.

B. The nature of entrants to an industry.

C. Externalities in industry development.

D. Mobility burners,

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Questions 8

which of the following is not an assumption that is made when assuming rationality on the part of the company?

A. The company chooses the decision that results in the maximum economic payoff.

B. The criteria and alternatives can be ranked according to their importance.

C. Specific decision criteria are constant and the weights assigned to them are stable over time.

D. The company seeks solutions that minimize conflict.

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Questions 9

Two companies produce and sell the same product in a competitive industry. Thus, the selling price of the product for each company is the same. Company 1 has a contribution margin ratio of 40% and fixed costs of $25 million. Company 2 is more automated, making its fixed costs 40% higher than those of Company 1. Company 2 also has a contribution margin ratio that is 30% greater than that of Company 1. By comparison, Company 1 will have the breakeven point in terms of dollar sales volume and will have the dollar profit potential once the indifference point in dollar sales volume is exceeded.

A. Option A

B. Option B

C. Option C

D. Option D

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Questions 10

Mesa Company is considering an investment to open a new banana processing division. The project in question would entail an initial investment of $45000, and as a result of the project cash inflows of $20000 can be expected in each of the next 3 years. The hurdle rate is 10%. What is the profitability index for the project?

A. 1.0784

B. 1.1053

C. 1.1379

D. 1.1771

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Questions 11

Flex Corporation is studying a capital acquisition proposal in which newly acquired assets will be depreciated using the straight-line method. Which one of the following statements about the proposal would be incorrect if a switch is made to the Modified Accelerated Cost Recovery System (MACRS)?

A. The net present value will increase.

B. The internal rate of return will increase.

C. The payback period will be shortened.

D. The profitability index will decrease.

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Questions 12

Geary Manufacturing has assembled the data appearing in the next column pertaining to two products. Past experience has shown that the unavoidable fixed manufacturing factory overhead included in the cost per machine hour averages $10. Geary has a policy of filling all sales orders, even if it means purchasing units from outside suppliers. Total machine capacity is 50,000 hours.

With all other things constant, if Geary Manufacturing is able to reduce the direct materials for an electric mixer to $6 a per unit, the company should

A. Produce 25,000 electric mixers and purchase all other units as needed.

B. Produce 20,000 blenders and 15,000 electric mixers, and purchase all other units as needed.

C. Produce 20,000 blenders and purchase all other units as needed.

D. Purchase all units as needed.

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Questions 13

The primary difference between centralization and decentralization is

A. Separate offices for all managers.

B. Geographical separation of divisional headquarters and central headquarters.

C. The extent of freedom of decision making by many levels of management

D. The relative size of the firm.

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Exam Code: CMA
Exam Name: Certified Management Accountant
Last Update: Mar 22, 2024
Questions: 1336
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