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

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

• Question 21:

  Identity and explain one benefit and one limitation of outsourcing most of me payroll-related work to an outside payroll service provider. 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.

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

  ---

  Explanation

  Benefit: Outsourcing shifts routine processing to a specialist-ZFI’s provider calculates payroll, makes direct deposits, mails pay stubs, and sends payroll reports-so ZFI can run payroll accurately and on time with minimal internal staff effort.

  Limitation: Control and security risks increase-ZFI’s administrator emails hours worked to the provider, maintains bank-account details, and only a monthly bank reconciliation independently checks results-so errors or unauthorized changes could go undetected for a pay cycle and sensitive data may be exposed in transit.

• Question 22:

  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. CVP analysts
  B. Business process analysis
  C. Sensitivity analysis
  D. Exploratory data analysis
  B. Business process analysis

• Question 23:

  Sportsman inc. manufactures ceramic sports-related figurines. The company's oldest lines are mass produced in a standard variety of colors and designs. A few years ago in an effort to increase sales, the company began accepting special

  orders with modified designs in school colors. The minimum order for these special designs is 100 units. The special orders have become very popular and now represent one quarter of the units produced.

  Estimates for the year follow.

  

  Design costs manufacturing overhead and materials handling costs are budgeted at $700.000 for the year Sportsman has always used a traditional cost allocation system using aired labor hours as the allocation base but is considering an activity based costing system. The most likely result of changing to an activity-based system is that

  A. the overhead costs allocated to the special designs will likely increase because the special design requires proportionally more overhead activity
  B. the overhead costs allocated to the special designs will likely decrease Because demand for them has grown
  C. total production costs are likely to decline as department are held responsible for their costs
  D. the costs allocated to each product should not change but management will be able to control various components of the cost more effectively.
  A. the overhead costs allocated to the special designs will likely increase because the special design requires proportionally more overhead activity

• Question 24:

  Aeronautics Inc. has designed a new 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-

  A. Time series.
  B. Learning curve analysis
  C. Exponential smoothing
  D. Cost-volume-profit analysis
  A. Time series.

• Question 25:

  Edward Pane is an external auditor who is seeking an understanding of the cash receipts process at his new client Pane decides to use a flowchart to analyze the operations for efficiency and control. Which one of the following statements is true with respect to the decision to use a flowchart for this purpose-

  A. Pane should not use a flowchart as it is used primarily after the risks have been identified
  B. Pane should not have selected a flowchart as it is better suited to help with compliance testing of existing controls
  C. Pane property selected the flowchart as a tool to match each of the risks to the corresponding primary control
  D. Pane properly selected the flowchart as it will help to depict the process and identify any missing or inadequate controls
  D. Pane properly selected the flowchart as it will help to depict the process and identify any missing or inadequate controls

• Question 26:

  Return on investment (ROI) is a performance measure that requires managers to respond to several factors that are under their Influence 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 ______

  A. providing the manager with limitations on what can be used to influence the factors involved in computing the ROI.
  B. using the two components of ROI (investment turnover and return on sales) instead of only ROI.
  C. allowing different minimum returns for different investments.
  D. requiring multiple-year measures of ROI and evaluating these results along with the residual incomes from the same periods.
  D. requiring multiple-year measures of ROI and evaluating these results along with the residual incomes from the same periods.

• Question 27:

  in order for the 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 ______

  A. the results of the latest disaster recovery test run
  B. the phone numbers of key employees
  C. vendors who win set up the hot site
  D. program and operating system documentation
  C. vendors who win set up the hot site

• Question 28:

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

  

  which SBU has the lowest contribution margin ratio-

  A. SBU A.
  B

• Question 29:

  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. Axle, Housing, Gear
  B. Gear. Housing, Axle
  C. Axle, Gear, Housing
  D. Housing, Axle, Gear.
  D. Housing, Axle, Gear.

• Question 30:

  Huaxia Manufacturing's standard cost card for product GH1 includes the following:

  

  During the month of June, Huaxia produced 12,300 units. The purchasing department purchased 30,400 yards of fabric for a total cost of $100,320. The production department used 25.300 yards of fabric in June. What is Huaxia's direct materials price variance for the month of June-

  A. $2,450 unfavorable
  B. $6,080 favorable
  C. $14,220 unfavorable
  D. $11,770 unfavorable
  B. $6,080 favorable