CIMA CIMAPRO19-P02-1 Exam Questions Instant Access

Question 1

Which TWO of the following statements are correct?

AIt is worthwhile for a company to sell further units when the marginal revenue is greater than the marginal cost.

BPrice is the only factor affecting the demand for products and services.

CPremium pricing is possible when there is a measure of product or service differentiation.

DLoss leadership pricing is appropriate for a new product which is not part of a range of products.

EDemand functions can be predicted accurately and the relationship between price and quantity demanded is always constant.

Answer : A, C

Question 2

The following data are available for an investment centre for the latest period. Where appropriate the data have been adjusted to reflect economic values.

What cost of capital has been used to calculate the EVA?

Give your answer to the nearest percentage.

See Below Explanation:

Answer : A

Question 3

A company produces a single product which is sold to one customer.

Components for the product are stored in a warehouse and when required for production they are inspected. Those passing the quality check are moved to the initial production line. Part-completed items are then inspected and those passing this second quality check are moved to the warehouse until required in the finishing process. After the finishing process the products are inspected, packaged and returned to the warehouse until required by the customer.

The company is considering implementing a full just-in-time (JIT) system for both purchasing and production and has asked your advice about the activities that will be necessary if this system is implemented.

Which THREE of the following activities will definitely be required in the proposed JIT system?

AComponents received

BComponents inspected

CProduct manufactured

DPart finished product inspected

EFinished product stored

FFinished product despatched to customer

Answer : A, C, F

Question 4

A company wishes to appraise a potential project. One of the project's relevant cash flows is the receipt, expressed in money terms, of $20,000 per year for the first 5 years.

The company's real cost of capital is 5% per year and the expected rate of inflation is 3% per year.

What is the real value of the expected receipt in year 2?

Give your answer to the nearest $10.

See Below Explanation:

Answer : A

Question 5

The following data are available for a division for the latest period.

What is the division's residual income for the period?

A12.50%

B31.25%

C$36,000

D$3,000

Answer : D

Question 6

A company has just received the latest in a series of annual payments; this payment was $620. The annual payments are expected to continue for three more years with each payment being increased by the expected rate of inflation. The real cost of capital is 8% per year and the expected rate of inflation is 6% per year.

What is the present value of the future payments the company expects to receive?

Give your answer to the nearest $.

See Below Explanation:

Answer : A

Question 7

Which of the following activities are included within activity based management (ABM)?

1. Cost reduction

2. Product design decisions

3. Variance analysis

4. Operational control

5. Performance evaluation

A3, 4 and 5 only.

B1, 2 , 4 and 5 only.

C1, 3, 4 and 5 only

DAll of them.

Answer : B

CIMA P2 Advanced Management Accounting CIMAPRO19-P02-1 Exam Questions