Reliable CIMA Management P2 Dumps PDF Apr 29, 2022 Recently Updated Questions [Q75-Q93]

NO.75 Company TTM has the opportunity to invest $60,000 in a project. The project is anticipated to produce annual returns of $12,500 each year for 8 years. The cost of capital is 12%.
What is the net present value of the project? Give your answer to the nearest whole number.

NO.76 S is considering launching a new product.
The variable costs of manufacturing the product will be $6 per unit.
The product must be manufactured in batches of 2,000 units. The machine set up cost for each batch will be $4,000.
Maximum capacity will be 8,000 units each year.
Market research has shown that the unit selling price will affect the demand for the product as follows.

Which unit selling price will maximise annual profit?

NO.77 Which of the following statements are correct with regard to responsibility centres?
Select ALL that apply.

NO.78 In an inflationary environment which is the correct way of calculating net present value (NPV)?

NO.79 One of an investment centre’s products is sold on an external market. Output is limited because the specialist machine that manufactures the product is operating at full capacity.
Current data for the product are as follows.

Investigations have identified that more rigorous maintenance of the machine at an annual cost of
$5,000 would reduce the number of breakdowns and increase its capacity to 1,300 units per year.
There would be no change in the selling price if more units were sold. Any additional labor hours would be paid a premium of 25%. A discount of 2% of the cost of all materials purchased is available if the company increases its purchases to 3,700 kg or more per year.
What would be the increase in the investment centre’s annual controllable profit if more rigorous maintenance is undertaken?

NO.80 Which THREE of the following are advantages of changing from a ‘top-down’ to a ‘bottom-up’ (participative) style of budgeting?

NO.81 An organization has a decentralized structure in which division A supplies division B with an intermediate product for which there is no external market. Division B carries out further processing and then sells the final product on the external market. Due to organizational policy the current transfer pricing basis is variable cost.
The manager of division A has stated, “The current transfer price is unfair because it does not enable us to recoup our costs”.
The manager of division B has stated, “The current transfer pricing system enables us to quote competitive prices for the finished product”.
The Chief Executive of the organization is considering imposing a transfer pricing policy that uses dual pricing.
Dual pricing would:

NO.82 The following data are available for four projects with unequal lives.
A 10% discount rate is appropriate for all four projects.

Which project has the highest equivalent annual benefit?

NO.83 A company has invested $500,000 in developing a new product and requires a return of 12% on this investment.
The company has researched the market and has set the selling price for the new product at $300 per unit. At this price, sales volume for next year is forecast to be 500 units. The forecast unit cost is $210.
What is the target cost gap per unit for the coming year?
Give your answer to the nearest whole $.

NO.84 A company’s competitor has just launched a rival product at a selling price of $38 per unit. Until now the company’s selling price of $41.60 per unit has achieved a 30% mark-up on the product’s unit cost. The company proposes to use a target costing approach to pricing to remain competitive.
Management has decided to match the competitor’s selling price and has set a target cost to achieve a
20% return on the target price.
What is the cost gap?

NO.85 The performance report for the production manager of a company for the last month included the following.
1,000 direct labor hours were worked at a basic rate of pay of $10 per hour. 200 of these hours were worked during overtime for which a 30% overtime premium was paid. 80 of these overtime hours were to fulfill a customer order that had originally been planned for manufacture next month. The sales manager had agreed to bring forward the delivery of this order at the request of the customer. The remaining overtime hours were due to unexpected inefficiency of the workforce; this has been traced to poor supervision by a junior manager.
Material costs included the following:
$5,300 of material A. Material A is a commodity and, due to changes on the global market, the actual unit cost of this material for last month was 6% higher than had been expected
$5,250 of material B. The usage of material B last month was 5% higher than it should have been due to faulty workmanship on the production line.
What is the total value of the above costs that was controllable by the production manager?

NO.86 For a pharmaceutical manufacturer, in which perspective of the Balanced Scorecard should the performance measure ‘number of patents granted during the year’ be included?

NO.87 The performance of an investment centre manager is assessed by return on investment (ROI) alone. At present, his expected ROI for next year is 15%. The manager must now decide whether to invest in a new project that is expected to yield an ROI of 14%. The cost of capital is 12%.
Indicate whether each of the following statements is true or false.

NO.88 A company has a cost of capital of 12% and a maximum of $20 million to invest. It has identified three possible investment projects, none of which is divisible, as follows.

Which project(s) should the company invest in?

NO.89 Which TWO of the following statements are correct?

NO.90 Company B, a video games developer, wants to use data to track the amount of traffic it receives on its social media pages. It specifically wants to find out the demographic it is most popular with on this platform, and how it can branch out to different demographics through further advertising.
How best could the company use big data to expand its demographic reach?
Select ALL that apply.

NO.91 Which basis of transfer pricing retains the full autonomy of divisional managers?

NO.92 How does beyond budgeting NOT help to resolve the weaknesses of traditional budgeting? Select ALL that apply.

NO.93 An organization is comprised of two divisions. One of the divisions manufactures a product that it sells both to an imperfect external market and to the other division.
The organization wishes to establish the most suitable basis for the transfer price for this product and is considering either a negotiated transfer price or a market-based transfer price.
Which of the following statements is correct?