Exam 4: BA2 - Strategic Management Question Tutorial

The possible returns and associated probabilities of two independent projects are as follows: 11ec37eb_8bb0_1edc_97b9_f397002659f4__00 It has been decided that both projects are to be launched. Which TWO of the following statements are correct? (Choose two.)

Which of the following is a relevant cost?

A company which manufactures and sells one product has fixed costs of $80,000 per period. The selling price per unit of $25 generates a contribution/sales ratio of 40%. How many units would need to be sold in a period to earn a profit of $10,000?

The forecast costs per unit for a new product are as follows: 11ec37eb_8bb0_1edd_97b9_57796e7a54f9__00 The company uses marginal cost plus pricing and all products are required to achieve a 40% margin. What would be the selling price per unit?

Which of the following would NOT require taking into account the time value of money?

Every month for the last three years, a company has recorded the number of new customers for that month. The data have been summarised and grouped as follows: 11ec37eb_8bae_e654_97b9_ad266ba46be0__00 What is the arithmetic mean of the number of new customers per month?

Which of the following statements regarding variances is valid?

According to CIMA's Code of Ethics, CIMA members should not allow bias, conflict of interest of the influence of other people to override their professional judgement. This is an example of:

A company's management accountant wishes to calculate the present value of the cost of renting a delivery vehicle. There will be five annual rental payments of $5,000, the first of which is due immediately. The company's discount rate is 12%. Which TWO of the following are valid ways to calculate the present value of the rental payments? (Choose two.)

A company makes and sells a range of products. The standard details per unit for one of these products, product X, are as follows. 11ec37eb_8baf_0d65_97b9_dbf4e7f6ef95__00 To meet sales demand, the company must obtain 2,000 units of product X next month. There is sufficient labour capacity to produce 1,500 of these units in-house during normal time. However, any production above this level would require overtime working which would be paid at a premium of 50%. The company can buy as many units of product X as it wishes next month from an external supplier at a price of $120 per unit. What is the total financial benefit to the company of purchasing the appropriate number of units from the external supplier rather than producing them in-house?

A company that uses standard costing wishes to reconcile the difference between the profit for a period calculated using absorption costing with that calculated using marginal costing. Which TWO of the following will NOT help with this reconciliation? (Choose two.)

A company has two production departments and two service departments (Maintenance and Stores). The overhead costs of each of the departments are as follows. 11ec37eb_8bb0_6cff_97b9_8dc28be6d6c9__00 The following equations represent the reapportionment of each of the service department overheads to the other. M = 4,700 + 0.1S S = 5,800 + 0.2M Where M = total Maintenance overhead after reapportionment from Stores S = total Stores overhead after reapportionment from Maintenance 60% of the total Maintenance overhead and 50% of the total Stores overhead are to be apportioned to Production Department 1. The total production overhead for Production Department 1 after reapportionment of the service departments' overhead costs is closest to:

A company uses an integrated accounting system. The following data relate to the latest period. 11ec37eb_8baf_a9a9_97b9_41705c90d720__00 At the end of the period, the entry in the production overhead control account in respect of under or over absorbed overheads will be:

Which of the following is a valid definition of a cash budget?

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 company is appraising two projects. Both projects are for five years. Details of the two projects are as follows. 11ec37eb_8baf_5b87_97b9_2559fdf87bff__00 Based on the above information, which of the following statements is correct?