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CMA Part 1 – Financial Planning, Performance and Control Examination Practice Questions

Mark Anthony Pusing 20 perguntas

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Perguntas do quiz (20)

  1. 1Cerawell Products Company is a ceramics manufacturer that is facing several challenges in its operations due to economic and industry conditions. The company is currently preparing its annual plan and budget. Which one of the following is subject to the least control by the management of Cerawell in the current fiscal year?
    1. AA new machine that was purchased this year has not helped reduce Cerawell’s unfavorable labor efficiency variances.
    2. BA competitor has achieved an unexpected technological breakthrough that has given them a significant quality advantage, and has caused Cerawell to lose market share.
    3. CVendors have asked that the contract price for the goods they supply to Cerawell be renegotiated and adjusted for inflation.
    4. DExperienced employees have decided to terminate their employment with Cerawell and go to work for the competition.
  2. 2All of the following are advantages of the use of budgets in a management control system except that budgets
    1. Aforce management planning.
    2. Bprovide performance criteria.
    3. Cpromote communication and coordination within the organization.
    4. Dlimit unauthorized expenditures.
  3. 3In developing the budget for the next year, which one of the following approaches would most likely result in a successful budget with the greatest amount of positive motivation and goal congruence?
    1. APermit the divisional manager to develop the goal for the division that in the manager’s view will generate the greatest amount of profits.
    2. BHave senior management develop the overall goals and permit the divisional manager to determine how these goals will be met.
    3. CHave the divisional and senior management jointly develop goals and objectives while constructing the corporation’s overall plan of operation.
    4. DHave the divisional and senior management jointly develop goals and the divisional manager develop the implementation plan.
  4. 4Which one of the following statements concerning approaches for the budget development process is correct?
    1. AThe authoritative approach to budgeting discourages strict adherence to strategic organizational goals.
    2. BTo prevent ambiguity, once departmental budgeted goals have been developed, they should remain fixed even if the sales forecast upon which they are based proves to be wrong in the middle of the fiscal year
    3. CWith the information technology available, the role of budgets as an organizational communication device has declined.
    4. DSince department managers have the most detailed knowledge about organizational operations, they should use this information as the building blocks of the operating budget.
  5. 5Which one of the following items would most likely cause the planning and budgeting system to fail? The lack of
    1. Ahistorical financial data.
    2. Binput from several levels of management.
    3. Ctop management support.
    4. Dadherence to rigid budgets during the year.
  6. 6All of the following are disadvantages of authoritative budgeting as opposed to participatory budgeting, except that it
    1. Amay result in a budget that is not possible to achieve.
    2. Bmay limit the acceptance of proposed goals and objectives.
    3. Creduces the communication between employees and management.
    4. Dreduces the time required for budgeting.
  7. 7All of the following statements concerning standard costs are correct except that
    1. Atime and motion studies are often used to determine standard costs.
    2. Bstandard costs are usually set for one year.
    3. Cstandard costs can be used in costing inventory accounts.
    4. Dstandard costs are usually stated in total, while budgeted costs are usually stated on a per-unit basis.
  8. 8One approach for developing standard costs incorporates communication, bargaining, and interaction among product line managers; the immediate supervisors for whom the standards are being developed; and the accountants and engineers before the standards are accepted by top management. This approach would best be characterized as a(n)
    1. Aimposed approach.
    2. Bauthoritative approach.
    3. Cengineering approach.
    4. Dparticipative approach.
  9. 9When compared with ideal standards, practical standards
    1. Aproduce lower per-unit product costs.
    2. Bresult in a less desirable basis for the development of budgets.
    3. Cincorporate very generous allowances for spoilage and worker inefficiencies.
    4. Dserve as a better motivating target for manufacturing personnel.
  10. 10Jura Corporation is developing standards for the next year. Currently XZ-26, one of the material components, is being purchased for $36.45 per unit. It is expected that the component’s cost will increase by approximately 10% next year and the price could range from $38.75 to $44.18 per unit depending on the quantity purchased. The appropriate standard for XZ-26 for next year should be set at the
    1. Acurrent actual cost plus the forecasted 10% price increase.
    2. Blowest purchase price in the anticipated range to keep pressure on purchasing to always buy in the lowest price range.
    3. Chighest price in the anticipated range to insure that there are only favorable purchase price variances.
    4. Dprice agreed upon by the purchasing manager and the appropriate level of company management

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Financial Planning, Performance and Control Examination Practice Questions
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