IMANET IMANET-CMA Online Practice Questions and Exam Preparation

IMANET IMANET-CMA Online Questions & Answers

• Question 391:

  Unrelated firms mat share resources to exploit a marketing opportunity constitute a

  A. Mufti channel marketing system.
  B. Administered channel.
  C. Conventional channel.
  D. Horizontal marketing system.
  D. Horizontal marketing system.

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  Explanation

  A horizontal marketing system consists of two or more unrelated firms that share resources to - exploit a marketing opportunity The arrangement may be temporally or permanent or in the form of a joint venture firm 1created for the purpose. An example is a fast-food corn pans agreement to set up stores in a Wal-Mart.

• Question 392:

  An organization's policies and procedures 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
  A. Feedforward control

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  Explanation

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

• Question 393:

  Clay Corporation follows an aggressive financing policy in its working capital management while Los Corporation follows a conservative financing policy. Which one of the following statements is correct?

  A. Clay has a low ratio of short-term debt to total debt while Lott has a high ratio of short-term debt to total debt.
  B. Clay has a low current ratio while Lott has a high current ratio
  C. Clay has less liquidity risk while Lott has more liquidity risk.
  D. Clay's interest charges are lower than Lott's interest charges.
  B. Clay has a low current ratio while Lott has a high current ratio

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  Explanation

  A conservative working capital management financing policy uses permanent capital to finance permanent asset requirements and also some or all of the firm's seasonal demands. Thus, Lott's current ratio (current assets/current liabilities) will be high since its current liabilities will be relatively low. An aggressive policy entails financing some fixed assets and all the current assets with short-term capital. This policy results in a lower current ratio.

• Question 394:

  The controller of JoyCo has requested a quick estimate of the manufacturing supplies needed for the Morton Plant for the month of July when production is expected to be 470,000 units to meet the ending inventory requirements and sales of

  475 .000 units. JoyCo's budget analyst has the following actual data for the last 3 months:

  

  Using these data and the high-low method to develop a cost estimating equation, the estimate or needed manufacturing supplies for July would be

  A. $652,500
  B. $681,500
  C. $749,180
  D. $752,060
  D. $752,060

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  Explanation

  The fixed and variable portions of mixed costs may be estimated by identifying the highest and the lowest costs within the relevant range. The difference in cost divided by the difference in activity is the variable rate. Once the variable rate is found, the fixed portion is determinable April and March provide the highest and lowest amounts. The difference in production was 90,000 units (540,000 April - 450,000 March), and the difference in the cost of supplies was $130,500 ($853,560 - $723,060). Hence, the unit variable cost was 145 ($130,500 + 90,000 units). The total variable costs for March must have been $652,500 (450.000 units x $145 VC per unit), and the fixed cost must therefore have been $70,560 ($723,060 - $652,500). The probable costs for July equal $681,500 (470,000 units x $145 VC per unit) and $70,560 of fixed costs, a total of $752,060.

• Question 395:

  Wiich pairs of systems are considered corrIementary because they inherently focus on andfferent time frames Short-term Long-term

  A. Operation costing Theoryotconslranis
  B. Active*flasedcosbng Theoryotconstrr(s
  C. Theoryotconslrarts Operaboncosting
  D. Theoryctcons#air(s Acti%c.besedcosbng
  D. Theoryctcons#air(s Acti%c.besedcosbng

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  Explanation

  Theory of constraints (TOC) has a short-term focus based on costs of arterials and product raw; activity-based costing has a long-term locus which considers al predict costs and is concerned with strategic pricing and profit plan rang

• Question 396:

  Panyer Co. is a producer of a tank component. This product, J-5, has the following selling price and costs per unit Panyer has recently received a special, one-h me order for 2. 000 units of J-5. Panyer currently has enough excess capacity for this order. what should be the minimum price charged by Panyer?

  

  A. $155
  B. $205
  C. $230
  D. $300
  B. $205

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  Explanation

  With the assumption that idle capacity is sufficient to manufacture 2. 000 extra units, the goal is to find a minimum price that will not affect the price or quantity of other units sold. This minimum price is equal to the sum of the variable costs. $205

• Question 397:

  MEC Corporation has 100,000 shares of stock outstanding. Below is part of Mac's Statement of Financial Position for the last fiscal year.

  

  What is the maximum amount MEC can pay in cash dividends per share and maintain a minimum current ratio of 2 to 1? Assume that all accounts other than cash remain unchanged.

  A. $2. 05
  B. $2. 50
  C. $3. 35
  D. $3. 80
  B. $2. 50

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  Explanation

  Before the dividend, total current assets equal $2050, 000 ($455,000 cash + $900,000 receivables + $650,000 inventory + $45,000 prepaid assets). Current liabilities total $900000 ($285,000 accrued liabilities + $550,000 accounts payable + $65,000 current portion of long-term debt). The payment of the cash dividend will not change current liabilities, so a current ratio of 2 to 1 requires that current assets be maintained at a minimum of $1,800,000 (2 x $900,000). Thus, cash can decrease by $250,000 ($2,050,000 -- $1,800,000). The maximum per-share rate is $2. 50 ($250,000 + 100,000 shares).

• Question 398:

  The maximum capital expansion that FLF Corporation can support in the coming year without resorting to external equity financing is

  A. $2 million.
  B. $3 million.
  C. $5 million.
  D. Cannot determine from the information given.
  C. $5 million.

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  Explanation

• Question 399:

  The price that one division of a company charges another division for goods or services provided is called the

  A. Market price
  B. Transfer price
  C. Outlayprice
  D. Distress price
  B. Transfer price

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  Explanation

  A transfer price is the price charged by one segment of an organization for a product or service supplied to another segment of the same organization.

• Question 400:

  Don Adams Breweries is considering an expansion project with an investment of $1 .500000. The equipment will be depreciated to zero salvage value on a straight-line basis over 5 years. The expansion will produce incremental operating revenue of $400,000 annually for 5 years. The company's opportunity cost of capital is 12%. Ignore taxes.What is the SR of the investment?

  A. 1043%
  B. 12. 68%
  C. 16. 32%
  D. 19.17%
  A. 1043%

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  Explanation