Pass CMA-Financial-Planning-Performance-and-Analytics Exam Latest Practice Questions Updated on Jul 02, 2023
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To be eligible to take the CMA Part 1 certification exam, candidates must have a bachelor's degree from an accredited institution and at least two years of professional experience in financial planning, performance, or analytics. Alternatively, candidates can also qualify by having a professional certification in a related field, such as CFA or CPA. The exam itself consists of 100 multiple-choice questions and must be completed within four hours.
NEW QUESTION # 46
Life-cycle costing is most effective when used with products that have a
- A. long development period and many costs incurred poor to manufacturing
- B. long development period and many costs incurred during manufacturing
- C. short development period and many costs Incurred during manufacturing
- D. short development period and few costs incurred poor to manufacturing
Answer: A
NEW QUESTION # 47
As part of the COSO Internal Control Framework segregation of duties and documentation are included in which of the components of the COSO model below?
- A. Risk assessment
- B. Operating environment
- C. Control activities
- D. Information and communication
Answer: C
NEW QUESTION # 48
Collins Corporation manufactures its products in a highly automated, just-in-time environment and uses a standard cost system. The variance that would cause the least concern would be a
- A. 6% unfavorable fixed overhead volume variance caused by work stoppages because of missing parts
- B. 9% unfavorable material price variance caused by changing to a supplier that would support the company's just-in-time needs.
- C. 30% unfavorable direct labor efficiency variance caused by idle time while waiting for goods to be received from a previous manufacturing department
- D. 12% unfavorable variable overhead spending variance caused by keeping equipment running during times when there is no production activity
Answer: B
NEW QUESTION # 49
Scully Tools Company is currently completing its master budget for the coming year Immediately before the master budget is approved, it is determined that December sales should be revised upward by S120.000 .
Scully purchases merchandise on a just-in-time basis, and remits cash immediately through electronic transfer All sales are on account. 20% of the sales are collected in the month of sale, and 80% in the month following the sale. Scully's gross profit percentage is 30%. What effect will this budget revision have on Scully's pro forma statement of cash flows?
- A. Cash will increase by $24,000
- B. Cash will increase by $36,000
- C. Cash will decrease by $60,000
- D. Cash will decrease by $84,000
Answer: D
NEW QUESTION # 50
would you recommend any changes to the job responsibilities of ZFl's payroll administrator from an internal control perspective? Explain why.
Essay
Zhiliang Foods Inc. (ZFI) is a privately-held food distributor ZFI has two production departments' the Meat Department is labor-intensive. while the Bakery Department is highly automated ZFI applies a single overhead allocation rate, using the number of pounds produced as an allocation base for the whole company The expected annual overhead costs of ZFI for 100 million pounds produced are as follows (¥ in millions).
ZFI has one payroll administrator in its Human Resources department, but most of the payroll related work is outsourced to a payroll service provider ZFI's payroll administrator is responsible for tracking the list of current employees and maintaining the most up-to-date employee information, including bank accounts for payroll direct deposits.
Each pay period, the payroll administrator emails the information for all current employees' hours worked to the payroll service provider. The service provider then processes the payroll, makes direct deposits to employees' bank accounts, mails payroll stubs to employees' homes and emails payroll reports to ZFI's payroll administrator. The payroll administrator then makes payroll journal entries to ZFI's accounting system based on the payroll reports received ZFI's accountant prepares a bank reconciliation each month to ensure ZFI s payroll payments on ZFI's bank statement match the amounts shown on the payroll reports from the service provider.
ZFl's management is evaluating the purchase of data encryption software and human resources management software next year. The human resource management software is expected to provide various human resources and payroll-related functions.
In addition, the human resource software can generate a report to indicate the monthly employee turnover rate and the average service length of employees who have resigned. The system can also generate a report to indicate the main reasons for resignations and identify current employees who are at risk of resigning. The system will recommend actions to help retain these employees, such as more training opportunities or a pay raise.
Answer:
Explanation:
See the Answer below in Explanation details.
Explanation
The work of the payroll administrator is not supervised so he can add fake employees and get their salaries in account operated by him...... A supervisory or department heads should review his work before processing.
Secondly an accountant should be responsible for passing the entries rather than the administrator, the system lacks segregation of duties which can facilitate fraud and errors.
NEW QUESTION # 51
Discuss how FDL's allocation of shared corporate services costs may overstate the profitability of the Food-To-Go division, and provide your recommendation on shared corporate services costs allocation.
Essay
Food Depot Ltd (FDD is a privately-held company that provides catering services to airlines and operates several restaurant chains including fast food, casual dining, and fine dining restaurants FDL has been profitable m recent years and has a very strong cash position FDL's newest division. Food-To-Go. is an online meal ordering and delivery platform acquired by FDL two years ago.
In 20X7. sales for the entire company were SI billion, with 50% of the business coming from the Airline Catering division. FDL is the country's leading airline catering services provider and controls 60% of the market share. However, the outlook of the airline catering industry is gloomy. The compound annual growth rate of the industry for the past five years was only 0.5% as airline networks have increasingly dropped catering on short domestic flights.
The Food-To-Go division only contributed 5% of FDL's total sales in 20X7 and is far behind in competing for market share of the online meal ordering and deliver, industry. It is estimated that Food-To-Go's sales were only 20% of the industry leader's sales However, the outlook for the online meal ordering and delivery services industry is bright. The compound annual growth rate of the industry since it started three years ago was 50%. It is estimated the rapid growth of the industry will continue in the foreseeable future.
The costs of shared corporate services are allocated based on each division s revenue FDL usually caps its capital expenditure budget to 4% of budgeted sales revenue In a recent capital budget coordination meeting.
Smith Whitney, the head of the Airline Catering division. complained that his division is underfunded on capital projects . The budgeted capital expenditure had been much less than 4 % of the division's budgeted sales in the past three years He argued that his division is the company's best-performing division, and it needs more funds to maintain its market share m the industry Whitney wants to reduce the capital expenditure budget for Food-To-Go and reallocate those funds to his division.
Susan Wiley, the bead of Food-To-Go, does not agree that the Airline Catering division is the best-performing division in the company Wiley argues that her division had the highest ROI in 20X7. and it deserves more capital funding FDL's required rate of return is 12%. The selected financial data for the Airline Catering division and Food-To-Go division in 20X7 are as follows (in $ millions).
Answer:
Explanation:
See the Answer below in Explanation details.
Explanation
The revenues of food to go division are less as compared to airline catering division which means less proportion of the overheads win he diverted to the division irrespective of the use Recommended method
-stand-alone
-incremental method of allocating the snares corporate service costs|
NEW QUESTION # 52
Which one of the following best describes the difference between a normal costing system and an actual costing system?
- A. Direct material cost is estimated using a predetermined rate under a normal costing system while it is the actual value under an actual costing system
- B. Both direct labor cost and direct material cost are estimated using a predetermined rate under a normal costing system, while they are the actual value under an actual costing system
- C. Direct labor cost is estimated using a predetermined rate under a normal costing system, while it is the actual value under an actual costing system.
- D. Factory overhead cost is estimated using a predetermined rate under a normal costing system, while it is me actual value under an actual costing system.
Answer: D
NEW QUESTION # 53
One major output of an accounting information system's financing cycle is a summary of
- A. actual operating cash outflows
- B. current cash balances.
- C. actual operating cash inflows
- D. forecasted cash needs
Answer: D
NEW QUESTION # 54
Which statement below best describes the relationship among a company's organizational structure, policies.
objectives and the effectiveness of the control environment?
- A. Management can determine the organizational structure, policies and objectives to create the control environment after the risks are identified
- B. The control environment often Is completely Independent and distinct from the organizational structure policies. and objectives
- C. The control activities have more influence on the control environment than the organizational structure policies and objectives
- D. The policies, organizational structure, and objectives set the foundation tor the internal control components and provide discipline and structure
Answer: D
NEW QUESTION # 55
Trans Action inc. (TAI) is a multidivisional supplier of power train components to the automobile industry.
Following is selected information for the year just ended for each of the three divisions. Gear Axle and Housing.
The tai Board of Directors has decided to reward the employees or the divisions by allowing them to share in a bonus pool equal to S100.000 for each percentage point the return on investment (ROI) earned by their division exceeded the ROI of comparable firms as shown in the table below.
Rank the amounts in the bonus pools for the respective divisions from highest to lowest.
- A. Gear. Housing, Axle
- B. Axle, Gear, Housing
- C. Housing, Axle, Gear.
- D. Axle, Housing, Gear
Answer: C
NEW QUESTION # 56
A company's controller is preparing to allocate service department costs. The controller would like to use a cost allocation method that would be most accurate. The method the controller would most likely use is the
- A. direct method
- B. reciprocal method
- C. step-down method
- D. dual allocation method
Answer: B
NEW QUESTION # 57
GorCo anticipates 10% sales growth each month for the next three months, and plans to sell 120.000 units of finished goods In the first month. The company plans production so that ending inventory is equal to 5% of the next month's budgeted sales On GorCo's production budget for the second month the number of finished goods units to be produced would be
- A. 132,600.
- B. 131,340.
- C. 132,660.
- D. 132,000.
Answer: C
NEW QUESTION # 58
Mauer Company's master budget for next year indicates the following
- A. $30,000,000
- B. $37.950,000
- C. $40,500,000
- D. $39,950,000
Answer: B
NEW QUESTION # 59
Brickworks Inc. prepares its annual budget by focusing on the budgeted costs of the processes necessary to produce and sell its products This type of budgeting is known as
- A. activity-based budgeting
- B. zero-based budgeting
- C. project budgeting
- D. flexible budgeting
Answer: B
NEW QUESTION # 60
A new restaurant chain has installed a new restaurant management system. However many employees have complained 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?
- A. Exploratory data analysis
- B. CVP analysts
- C. Business process analysis
- D. Sensitivity analysis
Answer: C
NEW QUESTION # 61
A company incurred the following selected costs In its manufacturing operations during the month.
- A. $20,000
- B. $22,000
- C. $23,000
- D. $21,000
Answer: B
NEW QUESTION # 62
Ingle Inc. has adopted a quality management program that considers all defects as avoidable and unnecessary The goal of this program is to have zero defects ingle uses a process costing system and has recognized the cost of normal and abnormal spoilage on its financial statements How will the new quality management program affect the accounting for normal and abnormal spoilage?
- A. All spoilage will be assigned to ending finished goods inventory
- B. There will be no effect
- C. All spoilage will be recognized as normal spoilage
- D. All spoilage will be recognized as abnormal spoilage
Answer: D
NEW QUESTION # 63
Harris Company sells two products with the following characteristics.
Harris Company's total sales-mix variance for the year is
- A. $350,000 unfavorable
- B. $300,000 Unfavorable
- C. $375,000 Unfavorable
- D. $725,000 Favorable
Answer: C
NEW QUESTION # 64
Describe one example of predictive data analytics that the proposed human resources management software can perform.
Essay
Zhiliang Foods Inc. (ZFI) is a privately-held food distributor ZFI has two production departments' the Meat Department is labor-intensive. while the Bakery Department is highly automated ZFI applies a single overhead allocation rate, using the number of pounds produced as an allocation base for the whole company The expected annual overhead costs of ZFI for 100 million pounds produced are as follows (¥ in millions).
ZFI has one payroll administrator in its Human Resources department, but most of the payroll related work is outsourced to a payroll service provider ZFI's payroll administrator is responsible for tracking the list of current employees and maintaining the most up-to-date employee information, including bank accounts for payroll direct deposits.
Each pay period, the payroll administrator emails the information for all current employees' hours worked to the payroll service provider. The service provider then processes the payroll, makes direct deposits to employees' bank accounts, mails payroll stubs to employees' homes and emails payroll reports to ZFI's payroll administrator. The payroll administrator then makes payroll journal entries to ZFI's accounting system based on the payroll reports received ZFI's accountant prepares a bank reconciliation each month to ensure ZFI s payroll payments on ZFI's bank statement match the amounts shown on the payroll reports from the service provider.
ZFl's management is evaluating the purchase of data encryption software and human resources management software next year. The human resource management software is expected to provide various human resources and payroll-related functions.
In addition, the human resource software can generate a report to indicate the monthly employee turnover rate and the average service length of employees who have resigned. The system can also generate a report to indicate the main reasons for resignations and identify current employees who are at risk of resigning. The system will recommend actions to help retain these employees, such as more training opportunities or a pay raise.
Answer:
Explanation:
See the Answer below in Explanation details.
Explanation
The HRm software can help lo predict the turnover rate of the labour which then can he used by the department heads to counter and ensure that the talent is retained within the company]
2nd Essay
NEW QUESTION # 65
Which one of the following is not considered to be a Benefit of participative budgeting?
- A. When managers set the final targets for the budget, it reduces top management's concerns about the profitability of operations
- B. individuals at all organizational levels are recognized as being pan of the team resulting in greater support of the budget
- C. Budget estimates are prepared by those in direct contact with various activities
- D. Managers are held responsible for reaching their goals and cannot shift responsibility by blaming the unrealistic goals demanded by the budget.
Answer: A
NEW QUESTION # 66
What is the best type of accounting system control to help prevent improper manipulation of data and to ensure the continued, satisfactory use of the hardware and software?
- A. Output controls such as a maximum check
- B. Processing controls such as limiting access
- C. input controls such as a limit check
- D. Throughput controls such as a hash total
Answer: C
NEW QUESTION # 67
Grayson Inc. experienced the following costs per unit this year for one of the direct materials involved in producing its main product
3.1 pounds @ $4 20 per pound = $13.02 per finished unit
For the next year. Grayson expects to produce 7.400 finished units. The price per pound of the direct material is expected to rise 10%. To combat this increase. Grayson has adapted its manufacturing process to reduce the amount of the direct material needed per finished unit by 5% What is the direct materials budget for the next year?
- A. $100,684
- B. $101,165
- C. $91,531
- D. $105,983
Answer: A
NEW QUESTION # 68
In trying to predict the returns on the stock market, a novice investor collected data on the sightings of sperm whales off the eastern coast of North America and the performance of the Dow Jones Industrial Average (the Dow) A regression of the two variables resulted in a correlation coefficient of -0.90 or a coefficient of determination (r2) of 81%. The sightings of whales seemed to be negatively correlated with the performance of the Dow. The novice investor should
- A. conclude that there is a cause-and-effect relationship between the two variables
- B. conclude that the poor performance of the Dow leads to high sightings of sperm whales
- C. conclude that this is an example of spurious correlation
- D. track the sighting of sperm whales and buy the Dow when sightings are low: conclude that sperm whale sightings are a strong indicator of poor performance of the Dow
Answer: C
NEW QUESTION # 69
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