CMA Part 1 – Financial Planning, Performance and Control Examination Practice Questions

Cerawell Products Company is a ceramics manufacturer that is facing several challenges in its operations due to economic and industry conditions. The company is currently preparing its annual plan and budget. Which one of the following is subject to the least control by the management of Cerawell in the current fiscal year?

All of the following are advantages of the use of budgets in a management control system except that budgets

In developing the budget for the next year, which one of the following approaches would most likely result in a successful budget with the greatest amount of positive motivation and goal congruence?

Which one of the following statements concerning approaches for the budget development process is correct?

Which one of the following items would most likely cause the planning and budgeting system to fail? The lack of

All of the following are disadvantages of authoritative budgeting as opposed to participatory budgeting, except that it

All of the following statements concerning standard costs are correct except that

One approach for developing standard costs incorporates communication, bargaining, and interaction among product line managers; the immediate supervisors for whom the standards are being developed; and the accountants and engineers before the standards are accepted by top management. This approach would best be characterized as a(n)

When compared with ideal standards, practical standards

Jura Corporation is developing standards for the next year. Currently XZ-26, one of the material components, is being purchased for $36.45 per unit. It is expected that the component’s cost will increase by approximately 10% next year and the price could range from $38.75 to $44.18 per unit depending on the quantity purchased. The appropriate standard for XZ-26 for next year should be set at the

Which one of the following will allow a better use of standard costs and variance analysis to help improve managerial decision-making?

After performing a thorough study of Michigan Company’s operations, an independent consultant determined that the firm’s labor standards were probably too tight. Which one of the following facts would be inconsistent with the consultant’s conclusion?

For cost estimation simple regression differs from multiple regression in that simple regression uses only

A company has accumulated data for the last 24 months in order to determine if there is an independent variable that could be used to estimate shipping costs. Three possible independent variables being considered are packages shipped, miles shipped, and pounds shipped. The quantitative technique that should be used to determine whether any of these independent variables might provide a good estimate for shipping costs is

Dawson Manufacturing developed the following multiple regression equation, utilizing many years of data, and uses it to model, or estimate, the cost of its product. Cost = FC + a*L + b*M Where: FC = fixed costs L = labor rate per hour M = material cost per pound Which one of the following changes would have the greatest impact on invalidating the results of this model?

In order to analyze sales as a function of advertising expenses, the sales manager of Smith Company developed a simple regression model. The model included the following equation, which was based on 32 monthly observations of sales and advertising expenses with a related coefficient of determination of .90. S = $10,000 + $2.50A S = sales A = advertising expenses If Smith Company’s advertising expenses in one month amounted to $1,000, the related point estimate of sales would be

The results of regressing Y against X are as follows. Coefficient Intercept 5.23 Slope 1.54 When the value of X is 10, the estimated value of Y is

Which one of the following techniques would most likely be used to analyze reductions in the time required to perform a task as experience with that task increases?

Aerosub Inc. has developed a new product for spacecraft that includes the manufacturing of a complex part. The manufacturing of this part requires a high degree of technical skill. Management believes there is a good opportunity for its technical force to learn and improve as they become accustomed to the production process. The production of the first unit requires 10,000 direct labor hours. If an 80% learning curve is used and eight units are produced, the cumulative average direct labor hours required per unit of the product will be

A manufacturing firm plans to bid on a special order of 80 units that will be manufactured in lots of 10 units each. The production manager estimates that the direct labor hours per unit will decline by a constant percentage each time the cumulative quantity of units produced doubles. The quantitative technique used to capture this phenomenon and estimate the direct labor hours required for the special order is