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The CMA Part 1 exam covers a broad range of topics related to financial planning, budgeting, forecasting, and analysis. The exam is designed to test the candidate's ability to analyze financial data and use it to make informed decisions. The exam also covers topics such as cost management, financial statement analysis, and risk management.
The IMA CMA-Financial-Planning-Performance-and-Analytics (CMA Part 1: Financial Planning - Performance and Analytics) Exam is a certification exam offered by the Institute of Management Accountants (IMA) to individuals seeking to earn the Certified Management Accountant (CMA) designation. This exam focuses on financial planning, analysis, control, and decision-making skills. It covers topics such as financial statement analysis, cost management, budgeting, forecasting, and performance management. The exam consists of 100 multiple-choice questions and two essay questions, and candidates have four hours to complete it.
NEW QUESTION # 30
A company has four product noes and must decide to discontinue one so mat it can focus on its more profitable products Information about the four product lines is shown below.
if the company evaluates profitability based on ROl. which product line should be discontinued?
Calculator
- A. Product line Z.
- B. Product line X.
- C. Product line Y.
- D. Product line W.
Answer: B
NEW QUESTION # 31
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. Information and communication
- D. Control activities
Answer: D
NEW QUESTION # 32
La Salle Company purchased 2.150 shares of Barry Chocolates Corporation's common stock at $25.16 per share on November 17 of last year. The broker's commission was $85. The shares were sold on January 11 of the current year for $27.50 per share. The broker's commission on the sale was $76 Barry declared and paid dividends of $0 50 per share on March 26. June 25. September 25. and December 23 during the last two years La Salle's current year income statement would reflect a realized gain of
- A. $5,022
- B. $4,870
- C. $5,031
- D. $4,946
Answer: B
NEW QUESTION # 33
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
- A. 0
- B. 1
- C. 2
- D. 3
Answer: D
NEW QUESTION # 34
Which one of the following represents a temporary difference under U.S GAAP?
- A. Percentage depletion of natural resources
- B. Fines and expenses resulting from violation of the law
- C. Accrued liabilities
- D. interest received in municipal bonds
Answer: C
NEW QUESTION # 35
A timber company is evaluating its products to determine whether to continue to further process scrap wood into wood chips, or to just sell the scrap wood to another company. Which of the following statements best describes what the company should consider regarding the potential by-product?
- A. The company should consider the incremental operating income beyond the split-off point In Its decision.
- B. The company should consider an of the manufacturing costs for Doth products beyond the split-off point.
- C. The company should consider all joint costs throughout the process before it decides if it should process further.
- D. The company should consider all of the separable costs throughout the process as it is incremental.
Answer: A
NEW QUESTION # 36
Which one of the following is not considered to be a Benefit of participative budgeting?
- A. Managers are held responsible for reaching their goals and cannot shift responsibility by blaming the unrealistic goals demanded by the budget.
- B. When managers set the final targets for the budget, it reduces top management's concerns about the profitability of operations
- C. Budget estimates are prepared by those in direct contact with various activities
- D. individuals at all organizational levels are recognized as being pan of the team resulting in greater support of the budget
Answer: B
NEW QUESTION # 37
Which one of the following activities is not a pan of the data mining process?
- A. Generating recommendations based on insights derived from large databases
- B. Using artificial intelligence to identify patterns in large data sets
- C. Creating valid and useful information from large data sets using statistical methods
- D. Applying statistical techniques to derive information from large sets of data
Answer: A
NEW QUESTION # 38
To prevent cyoeratiacks. a company recently implemented penetration testing wnich one of tne following statements best descnbes this test?
- A. A series of attempts to flood the company's network with traffic
- B. A staged break-in of the company s server room after business hours
- C. An authorized attempt to break through the company's firev.au
- D. An email testing employee compliance with phishing guidelines
Answer: C
NEW QUESTION # 39
Explain the difference between the ROI method and the Rl method in performance evaluation 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
Return on investment measures the profit earned over the investment amount by a division where as residual income measures the income over the minimum required rate or return on the capital invested amount Return on investment is a percentage based method which is easy to understand by the managers and residual income is more goal congruent however calculations are subjective and subject to assumptions and estimates
NEW QUESTION # 40
The price of gold is impacted by many variables A gold-mining company analyst wants to estimate the probability that the price of gold will decline by greater than 10%. Which one of the following approaches is the best analytic tool to use?
- A. Regression analysis
- B. Goal-seeking analysis
- C. Monte Carlo simulation
- D. Time series analysis
Answer: C
NEW QUESTION # 41
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. 132,660.
- C. 131,340.
- D. 132,000.
Answer: B
NEW QUESTION # 42
Stone Ltd manufactures socket wrenches .The company produced 400 000 wrenches and sold 350,000 this year. The following information pertains to the costs accumulated in Stone's inventory.
What is the difference between Stones operating income under absorption costing and variable costings
- A. $36.500 higher using absorption costing
- B. $28,000 lower using variable costing
- C. $16,750 higher using absorption costing.
- D. $19,750 lower using variable costing
Answer: C
NEW QUESTION # 43
identify the category of the Food-To-Go division in the BCG Growth-Share Matrix and discuss whether FDL should allocate more capital funding to the Food-To-Go division.
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 food to 90 division will be classed as question mark due to the fact that the market of this industry is growing and expected to grow, however the company share in the market is less as compared to the market leader. It requires funding so that the market opportunities can be exploited and hence the company can expand in this industry to secure its future.
NEW QUESTION # 44
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. reciprocal method
- B. direct method
- C. dual allocation method
- D. step-down method
Answer: A
NEW QUESTION # 45
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?
- A. 210,000 units
- B. 205,000 units.
- C. 215.000 units
- D. 221,250 units
Answer: B
NEW QUESTION # 46
Identify one external factor that provides opportunity for the Food-To-Go division.
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
Chanding trend of consumers to order the food instead of visiting the restaurants
NEW QUESTION # 47
Which one of the following statements best defines data governance?
- A. A framework used to oversee the availability, usability and integrity of data
- B. The corporate records retention policy setting out the contents of the system data records
- C. The company's framework for supervising and managing the IT function
- D. Procedures implemented by the board of directors to manage data.
Answer: C
NEW QUESTION # 48
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 # 49
A manufacturing company is considering implementing activity-based costing. Which one of the following statements is a valid consideration when making this change?
- A. Activity-based costing systems may not replace traditional costing systems used for prepar.ng external financial statements.
- B. In an activity-based costing system, all costs including idle capacity costs, are allocated to products, customers and other costing objects
- C. Companies that make diverse products are least likely to benefit from activity based costing
- D. An activity-based costing system is more costly to maintain than a traditional costing system
Answer: D
NEW QUESTION # 50
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?
- A. $92,500.
- B. $599,000.
- C. $626,500
- D. $657,500
Answer: A
NEW QUESTION # 51
Sullivan Company's static Budget for the past year is shown below.
Sullivan actually sow 11.000.000 units throughout the year which was a quantity within its relevant range. The flexible budget net income that should be used to compare to actual results is
- A. $11,500,000.00
- B. $7,500,000.00
- C. $4,200,000.00
- D. $6,580,000.00
Answer: D
NEW QUESTION # 52
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?
- A. Retained earnings will decrease by $9.000.000
- B. Retained earnings will decrease by $1.000.000
- C. Common stock will increase by $10.000.000
- D. Paid-in capital will increase by $9,000.000
Answer: D
NEW QUESTION # 53
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