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CIMA Management Advanced Management Accounting

Advanced Management Accounting

Last Update Dec 22, 2024
Total Questions : 202

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Questions 2

Endure Co. makes 1,000 units ofX and 2,000 units of Y.

Costs for X: Material $4, labour $8, direct overhead $2, fixed cost $4.

Costs for Y: Material $9, labour $9, direct overhead $4, fixed cost $6.

Selling price for X and Y are S19 and $25 respectively. Another company can sell ready made product X and product Y's to Endure Co, this company sells X at $12 and Y at $21. Advise Endure Co. on what would be the

most cost effective way to source products X and Y.

Options:

A.  

Endure should buy X and Yfrom the other supplier.

B.  

Endure should buy X but produce Y themselves.

C.  

Endure should produce both X and Y themselves.

D.  

Endure should buy Y but produce X themselves.

Discussion 0
Questions 3

Which of the following is a key objective when agreeing a basis for setting transfer prices?

Options:

A.  

Promoting goal congruence

B.  

Increasing market share

C.  

Rewarding profit centre managers

D.  

Allocating overhead costs effectively

Discussion 0
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Questions 4

A company is investing $150,000 in a project which will yield an annual cash inflow of $40,000 for eight years. The company's cost of capital is 10%.

To the nearest $100, what is the project's equivalent annual net present value?

Options:

A.  

$11,900

B.  

$7,900

C.  

$63,400

D.  

$21,300

Discussion 0
Questions 5

A company manufactures and sells a range of products. Relevant data for one unit of a particular product are as follows.

Questions 5

The company is using target costing to ensure that it achieves a contribution of 40% of the market selling price.

In order to achieve the target cost, by how much does the company need to reduce the variable cost per unit?

Options:

A.  

$ 2.10

B.  

$ 0.50

C.  

$ 1.40

D.  

$ 2.60

Discussion 0

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