CIMAPRO19-P02-1 P2 Advanced Management Accounting Exam Practice Test

A company is investing in a huge diversification project. The plan is to develop and sell a whole new product line that they have never sold before. They've already started a massive marketing campaign for this new

product line and they are getting good feedback in their market research.

They've had to use debt funding in order to finance the project, but they hope that the returns will be worth the investment and restructuring. If they are successful they will be a step ahead of all their competitors and offer

something none of them can.

What is the risk appetite of this company?

Which of the following statements regarding multinational transfer pricing is INCORRECT?

How does beyond budgeting NOT help to resolve the weaknesses of traditional budgeting? Select ALL that apply.

A company uses activity based costing. The total production overheads of $16,050 for the next period are for set up costs of $6,450 and quality inspection costs of $9,600. The company produces two products, Product F and Product G. Details relating to the next period are as follows:

A new customer has offered to purchase Product F for $28.00 per unit. The only costs incurred would be those shown above.

What is the profit per unit of Product F that would be gained by accepting the offer? Give your answer to two decimal places.

A firm of accountants uses an activity-based costing system. The firm's costing system permits staff to indicate specific tasks undertaken for clients, such as requesting missing information. The amount charged for a request for missing information is based on the following analysis.

Each request takes an average of 15 minutes of professional staff time. Professional staff are charged out at $100 per hour.

Administrators then process the information request and prepare a standard letter. The average time administration staff spend on each information request is 20 minutes. The cost of administration staff at the firm is $75,600 per year. Administration staff work for a total of 6,000 hours per year. The cost of printing and posting a letter is $1.

Calculate the cost of an information request.

Give your answer to 2 decimal places.

A large manufacturing company sells a range of products. Details of one of these products are as follows.

Each completed batch is delivered immediately in full to the one customer that purchases this product. The delivery vehicle is currently only 50% full when it makes these deliveries. The customer will accept deliveries of any size.

Managers are considering changing the production batch size to 150 units.

Increased material storage would be needed; this can be rented nearby at a cost of $1,500 per month.

The additional storage facility would enable an increase in the reorder quantity for the materials. As a result a 5% discount would be received on all materials purchased.

Using direct product profitability (DPP), what will be the monthly profit attributable to the product if the production batch size is changed to 150 units?

Give your answer to the nearest whole $.

Risk management can be represented as a four step process. The four steps, shown randomly, are:

1. Establish appropriate risk management policies.

2. Risks are identified by key stakeholders.

3. Risks are monitored on an ongoing basis.

4. Risks are evaluated according to the likelihood of occurrence and impact on the organization.

Which of the following is the correct order for the four steps?