CMA Financial Planning Performance and Analytics Exam Practice Questions

1. Return on investment (ROI) is a performance measure that requires managers to respond to several factors that are under theirInfluence or control Decisions Intended to influence ROI are often from a short-term perspective and may conflict with the long-term objectives of the organization. This lack of goal congruence can be minimized by

2. A company has two service departments Security and Human Resources and two operating departments Assembly and Finishing Cost data for these departments are shown below





To determine the full costs of conducting Business m the operating departments the company allocates service department costs to the operating departments Security costs are allocated based on the number of employees and Human Resources costs are allocated based on the number of Human Resources hours used using the step-down method, what amount of Security costs would be allocated to the Assembly department?

3. Aeronautics Inc. has designed anew airplane that entails an extremely complex manufacturing process Upon reviewing the market Aeronautics' management believes the price of the plane will need to be set below current manufacturing costs. Some on the management team have recommended stopping the project, however, the CFO believes that the plane will become profitable in the near future.

The CFO most likely used which forecasting method?

4. MJC Co. is considering adopting a variable costing system using variable costing rather than absorption costing will be more advantageous to MJC because the variable costing system

5. A company reported that its shareholders' equity decreased in the recent year. This could occur if

6. A company has prepared the following pro forma income statements. It plans to sell 10,000 units in the current year and 11.500 units next year.

7. After a recent earthquake in a nearby city the board of directors of a company has requested a review of the company s disaster recovery plan.

Which of the following would be classified as a weakness in the company's disaster recovery plan?

8. A manufacturing companyis setting a standard number of labor hours for a product Management creates a draft standard and asks for employees' feedback.

Which one of the following statements best represents the type of standard that is being set?

9. The master budget for a company contains mefollowing production requirements.

Quarter 1― 50,000 units

Quarter 2 ― 55,000 units

Quarter 3 ― 45,000 units

Quarter 4 ― 52,000 units

Each unit of product requires four pounds of direct material. The company has a policy to begin each quarter with an inventory of aired materials equal to 20% of that quarter's direct material requirements. The budgeted direct mate da I purchases for the third quarter would be

10. The manager in charge of the disaster recovery plan for a company has ensured that there is off-site storage of key data programs, operating systems and documentation.

Which one of the following is the best next step to be prepared for a disaster?

11. The following information pertains to Wang Corporation which usesstandard costing for its materials.

The following information pertains to Wang Corporation which uses standard costing for its materials.





What is me amount of the unfavorable material-related variance that would appear on a report to the production foreman?

12. A corporation had foreign currency translation gains from converting the financial statements of its foreign operations into U.S dollars.

How will these gains be reported on the corporation’s financial statements?

13. Marsalis Products Inc. manufactures and sells batteries and cables for computers.

The latest information on the products and their costs is shown in the following table.





Note: 1 Fixedmanufacturing cost of S1.500,000 per year is allocated to products based on the number of machine hours required to produce the product at a rate of S3 per machine hour.

Based on the information above, what is the annual amount of earnings before interestand taxes (EBIT)?

14. A company had 100.000 shares of common stock issued and outstanding at January 1.

During the year, the company took the following actions:

15. when considering data visualization elements, the incorporation or color, shape, size, or animation can be used to address

16. A company has the following accounts included in its trial balance as of December 31





What amount of equity will be reported on me company’s balance sheet as of December 31?

17. All of the following are limitations of teaming curve analysis except that

18. A company announced a stock dividend under which 1.000.000 shares will be issued to the holders of the 10.000.000 shares that are currently outstanding. The stock which has a par value of $1 per share, traded at $10 on the dividend declaration date.

How will shareholders' equity be affected by this stock dividend?

19. Harris Company sells two products with the following characteristics.





Harris Company's total sales-mix variance for the year is

20. Anatolian Textile Company produces blue-jean pants for a globally known blue-jean brand and its annual financial results are shown below.





Based on the table the sales-price variance for the company is

21. in preparing Klein Corporation's master budget for the following calendar year, the manager of the Production Department requested the purchase of a new piece of machinery with a purchase price of $150.000 in addition, the cost of installing the machine would total $13.000. The purchase price of the machine would be financed by a 6%. 5-year loan with interest due quarterly. The amount Klein Corporation should include in its Capital Expenditures Budget due to this purchase is

22. A company s accounting department is run by only one accountant.

Which one of the following can be implemented as a detective control?

23. The best way to illustrate the entire distribution of numerical data for a single variable is with a

24. A company manufactures dining tables.

The variable costs per unit are as follows.





Other costs are fixed and include advertising costs of $45,000 per year administrative costs of $55,000 annually and fixed manufacturing overhead of S250.000 per year based on Budgeted production of 10.000 dining tables There was no beginning inventory During the prior year, a total of 10.000 dining tables were manufactured, with 9 000 dining tables sold at $100 each.

Based on the above information what would be the cost of the ending finished goods inventory under absorption (full) costing?

25. The contribution margin data is shown below for several strategic business units (SBU).





which SBU has the lowest contribution margin ratio?

26. A company's return on investment will increase it expenses decrease by $100 and

27. A new restaurant chain has installed a new restaurant management system. However many employees havecomplained that the restaurant management system is not user-friendly and has caused many customer service issues.

Which one of the following may help to improve system performance?

28. A company recently used 500 direct labor hours to manufacture ten units of a new product, if the company employs the cumulative average-time learning model with a 90% learning curve, the number of direct labor hours the company would expect to use to produce the next ten units of this product is

29. in order forthe IT manager in cnarge of a company's disaster recovery plan to have complete planning documentation, he should ensure that the documentation includes all of the following except

30. Which statement below best describes therelationship among a company's organizational structure, policies. objectives and the effectiveness of the control environment?

31. Which one of the following best describes the difference between a normal costing system and an actual costing system?

32. Company A currently uses U.S GAAP while Company 8 is currently using IFRS. Both companies are individually in the process of internally developing trademarks that have been demonstrated to be technically andeconomically feasible Both companies have incurred development costs in the current year with respect to their internally developed trademarks.

Which one of the following best describes how Company A and Company B should account for these development costsin their financial statements?

33. For a manufacturing company what is the most Importantadvantage of using variable costing rather than absorption costing?

34. A company expects sales of 225 000 units in April, 210 000 in May and 190 000 in June.

The company maintains an ending Inventory each month of 25% of the next month's sales.

How many units should the company plan to produce in May?