Cima P2 Exam Demo Questions - Exam4Help

Question no 1
An electronics company sells a range of tablet computers. Tablet computers come complete with an operating system that is regarded as the market leader. The company aims to launch a new version of its hardware every eighteen months and a major update to its software every three years. The latest version of the tablet computer is always sold at a higher price, but the older version that has been replaced is then sold for a time at a discounted price. Which pricing model does this company appear to be using?

A. Penetration and loss leader pricing
B. Penetration and product bundling
C. Skimming and loss leader pricing
D. Skimming and product bundling
Answer: D


Question No. 2
A company is classifying its quality costs to prepare a quality cost report. Which of the following are conformance costs?Select ALL that apply.

A. Internal Failure Costs
B. External Failure Costs
C. Prevention Costs
D. Appraisal Costs

Answer: C, D


Question No. 3
Which of the following would change if the cost of capital of a proposed project was increased?

A. Internal rate of return
B. Payback period
C. Accounting rate of return
D. Net present value

Answer: D


Question No. 4
Division A and Division B are divisions of the same group. Division A transfers all of its output to Division B.
Which THREE of these alternative transfer pricing bases will prevent any cost inefficiencies in Division A being passed on to Division B?

A. Standard variable cost
B. Actual full cost
C. Actual prime cost
D. Market price
E.  Actual variable cost
F. Standard variable cost plus a profit margin

Answer: A, D, F


Question No. 5

In accordance with a just-in-time (JIT) philosophy, which of the following is regarded as a value added activity?

A. Inspecting raw material deliveries
B. Moving work in progress around production facilities
C. Holding inventory
D. Dispatching products to customers

Answer: D


Question No. 6
When making an investment decision, which THREE of the following are reasons why receiving $1 today is preferable to receiving $1 in the future?

A. Uncertainty
B. Inflation
C. Taxation
D. Re-investment opportunities
E. Depreciation

Answer: A, B, D


Question No. 7
The money cost of capital is 12%. The expected rate of inflation is 4%. What is the real cost of capital? Give your answer to 2 decimal places.



Answer: 7.69 %, 7.70 %

Question No. 8
The money cost of capital is 12%. The expected rate of inflation is 4%. What is the real cost of capital? Give your answer to 2 decimal places.

Answer: 7.69 %, 7.70 %

Question No. 9
Company X is considering the launch of a new product. In order to compete in the market the selling price must be $100 per unit. Company X aims to achieve a sales margin of 25 per cent. Direct materials cost is $75 for each unit. It takes 15 minutes for workers to assemble each unit. Workers are paid $16 per hour. 5 per cent of paid time is idle. Overheads are absorbed at $6.50 per unit. What is the value of any cost gap between the forecast total cost and the target cost?

A. $10.71
B. $5.50
C. $10.50
D. $9.10

Answer: A