IMA CMA-FINANCIAL-PLANNING-PERFORMANCE-AND-ANALYTICS Online Practice Questions and Exam Preparation

IMA CMA-FINANCIAL-PLANNING-PERFORMANCE-AND-ANALYTICS Online Questions & Answers

• Question 91:

  Harris Company sells two products with the following characteristics.

  

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

  A. $300,000 Unfavorable
  B. $350,000 unfavorable
  C. $375,000 Unfavorable
  D. $725,000 Favorable
  C. $375,000 Unfavorable

• Question 92:

  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. Operating environment
  B. Risk assessment
  C. Control activities
  D. Information and communication
  C. Control activities

• Question 93:

  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).

  

  A. See the Answer below in Explanation details.
  B. PlaceHolder
  C. PlaceHolder
  D. PlaceHolder
  A. See the Answer below in Explanation details.

  ---

  Explanation

  Food-To-Go is a “Question Mark” in the BCG matrix: it competes in a very high-growth market (~50% CAGR) but has low relative market share (~20% of the leader). FDL should allocate more capital to Food-To-Go because its projects are value-creating today (ROI 25% and RI = $5 − 12%×$20 = +$2.6 million), and incremental investment can push it toward “Star” status. Funding should be prioritized here-even above the 4%-of-sales cap-so long as projects clear the 12% hurdle, while Airline Catering (a low-growth “Cash Cow” with 10% ROI and −$40 million RI) should receive only maintenance capex.

• Question 94:

  Which one of me following statements is correct concerning the Sarbanes-Oxley Act of 2002

  A. A company's Chief Accounting Officer cannot have been employed by the company's audit firm for the five years preceding the audit
  B. The five-member Public Company Accounting Oversight Board will be overseen by the AICPA and the FASB working together
  C. Corporate executives must personally certify the financial statements and company disclosures under the possibility of imprisonment
  D. The company's audit firm must be rotated every five years and the lead auditor must be rotated every year
  C. Corporate executives must personally certify the financial statements and company disclosures under the possibility of imprisonment

• Question 95:

  A company carried out the following activities for the current period.

  

  According to U.S GAAP, what amount of cash was provided by financing activities-

  A. ($55.000).
  B. ($45.000)
  C. ($40, 000).
  D. ($25,000).
  B. ($45.000)

• Question 96:

  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-

  A. She should enter into reciprocal agreements with alternative ''hot'' sites.
  B. She should make sure that everyone Knows the location of offsite data storage.
  C. She should create a planning document including a list of critical applications.
  D. She should ensure that the "cold" sites are fully equipped and ready.
  B. She should make sure that everyone Knows the location of offsite data storage.

• Question 97:

  Which one of the following is the most important factor in the successful implementation of a balanced scorecard-

  A. Providing a feedback mechanism
  B. Setting appropriate measurement criteria
  C. Linking the scorecard to external criteria
  D. Obtaining management buy-in and support
  C. Linking the scorecard to external criteria

• Question 98:

  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 ______

  A. 4,500 unfavorable
  B. 4,500 favorable
  C. 10,500 favorable
  D. 10,500 unfavorable
  C. 10,500 favorable

• Question 99:

  For a manufacturing company what is the most Important advantage of using variable costing rather than absorption costing-

  A. Variable costing includes only variable direct and indirect costs in inventory which makes it more useful for short-term decision making and performance evaluation.
  B. Variable costing is the required inventory method for external reporting in most countries and therefore is less costly to implement
  C. Variable costing is cost-effective and Jess confusing to managers and is therefore more useful in performance evaluation.
  D. Variable costing measures the cost of all manufacturing resources, whether variable or fixed and thus provides the most complete cost.
  A. Variable costing includes only variable direct and indirect costs in inventory which makes it more useful for short-term decision making and performance evaluation.

• Question 100:

  A company uses the full cost method to determine transfer prices between business units The related data are shown below

  

  Based on these data, what is the transfer price-

  A. $22 50
  B. $25.00
  C. $37.50.
  D. $50.00
  B. $25.00