IMANET IMANET Certifications IMANET-CMA Questions & Answers

• Question 1291:

  Which one-of the following best describes tactical profit plans?

  A. Details, short-term, broad responsibilities qualitative

  B. Broad, short-term responsibilities at all levels, quantitative

  C. Detailed, short-term responsibilities at all levels, quantitative

  D. Broad long-term broad responsibilities qualitative

  Correct Answer: C

  A tactical profit plan, also called a budget, must be detailed enough that middle managers know exactly what cost and revenue targets they are responsible for. Tactical plans necessarily focus on the short term, and they must detail responsibilities at all levels of the organization. Lastly, they must be quantitative so that managers know exactly what their goals are.

• Question 1292:

  Which of the following activities would likely not be a consideration in strategic planning?

  A. New product development

  B. Capital budgeting

  C. Mergers

  D. Materials procurement

  Correct Answer: D

  Strategic, or long-term, planning covers long periods of time and is concerned with matters such as new product development, capital budgeting; major financing, and mergers, acquisitions, and divestitures. Operational matters, such as materials procurement, are not a part of strategic planning, but they are a consideration in short- term, or operational , planning.

• Question 1293:

  Strategic planning is?

  A. Short term.

  B. Operational

  C. Long term

  D. Informal.

  Correct Answer: C

  Strategic planning, also called long-term planning. Covers periods from 1 to 20 years. Strategic planning is somewhat difficult because of uncertainty about future conditions. Thus, long-range plans are more general and exclude operational detail.

• Question 1294:

  Which of the following statements regarding budgets is false?

  A. Budgets present organizational plans in a formal, logical, and integrated manner.

  B. Budgets are used only as a planning function.

  C. Budgets may be developed for cash flows or labor usage.

  D. A budget is a plan that contains a quantitative statement of expected results.

  Correct Answer: B

  Budget formulation is a planning function; however, budgets are also useful control devices. Budget provide a basis for control of performance through comparisons of actual with budgeted data. They permit analysis of variations from plans and signal the need for corrective managerial action.

• Question 1295:

  Zero-based budgeting force managers to?

  A. Estimate a product's revenues and expenses over its expected life cycle.

  B. Prepare a budget based on historical costs.

  C. Formulate a budget by objective rather than function.

  D. Justify all expenditures at the beginning of every budget period.

  Correct Answer: D

  Zero-based budget is a planning process in which each manager must justify his/her department's full budget for each period. The purpose is to encourage periodic reexamination of all costs in the hope that some can be reduced or eliminated.

• Question 1296:

  The process of developing plans for a company's expected operations and controlling the operations to help carry out those plan is?

  A. Preparing a period budget.

  B. Preparing a master budget.

  C. Budgetary control

  D. Participative budgeting.

  Correct Answer: C

  The budget has same structure as the organization itself. Is made up of a hierarchy of smaller budgets, each representing the plan of a division, department, or other unit in the organizational structure. Successful budgeting requires completion of plan that states organizational goals before the budgeting process. Prevention and detection of deviations from the budget are the control purposes of budgets.

• Question 1297:

  In planning and controlling capital expenditures, the most logical sequence is to begin with?

  A. Analyzing capital addition proposals.

  B. Making capital expenditure decision.

  C. Analyzing and evaluating all promising alternatives.

  D. Identifying capital addition projects and other capital needs.

  Correct Answer: D

  Capital budgeting is a long-term planning process for investments. This process beings with the identification of capital needs, that is of projects required to achieve organization goals. The next step is to search for specific investments. The third step is to acquire and analyze information about the potential choices. The fourth step is to select specific investments after considering both qualitative and quantitative factors. The fifth step is to finance the undertakings. Yhe final step is implementation and monitoring.

• Question 1298:

  After the goals of the company have been established and communication, the next step in the planning process is development of the?

  A. Production budget

  B. Direct materials budget

  C. Selling and administrative budget

  D. Sales budget

  Correct Answer: D

  The sales budget is the first step in the operating budget process because it is needed to prepare all of the other budget. For example, the production budget cannot be prepared until the sales department has determined how many until are needed.

• Question 1299:

  An organization's policies and producers are part of its overall system of internal controls. The control function performed by policies and procedures is?

  A. Feedforward control

  B. Implementation control

  C. Feedback control

  D. Application control

  Correct Answer: A

  Feedfroward control anticipates and prevents problem. Policies and procedures serve as feed-forward controls because they provide guidance on how an activity should be performed to best insure that an objective is achieved.

• Question 1300:

  In an organization with empowered work team, organizational policies?

  A. Should define the limits or constraints within which the work team must act if they are to remain self-directing.

  B. Become more important than ever. Without clear rules to follow, empowered work teams are almost certain to make mistakes.

  C. Should be few or none. The work teams should have the freedom to make their own decision.

  D. Should be set by the teams themselves in periodic joint meetings.

  Correct Answer: A

  Work teams are not "empowered" to do anything they please. The organization has certain expectations for what is to be accomplished and how the teams are to go about accomplishing these expectations. Once the organization defines its objectives and sets appropriate policies, the work teams are able to make and implement decision within those boundaries. Policies in this context are usually quite broad (e.g. relating to ethical business conduct) but nevertheless important.