Question 1

A company is classifying its quality costs to prepare a quality cost report. Which of the following are conformance costs?Select ALL that apply.

Options :

A : Internal Failure Costs

B : External Failure Costs

C : Prevention Costs

D : Appraisal Costs

Answer: C,D

Question 2

How does beyond budgeting NOT help to resolve the weaknesses of traditional budgeting? Select ALL that apply.

Options :

A : Managers are set goals and targets to achieve rather than abiding by strict budgets and variances.

B : Managers have a much larger scope of business goals that when achieved, will increase shareholder value.

C : Managers are given more freedom and control over their business units under Beyond budgeting.

D : Managers focus on keeping costs low in the short term to ensure maximised profits.

E : Managers are given incentives to meet or undercut budgets.

F : Managers are encouraged to designate responsibility to others to lessen their workload so they may concentrate on important tasks.

Answer: A,D

Question 3

A manufacturing company is in the process of introducing just in time (JIT) and total quality management (TQM) into every aspect of its value chain.
Which TWO of the following are appropriate changes to make to the support activities in the organization's value chain?

Options :

A : Inbound logistics would need to ensure that materials of appropriate quality are delivered on a just in time basis.

B : Operations would need to be carried out on a right first time basis as any failure could delay production.

C : After sales service would need to ensure that appraisal costs are kept to a minimum.

D : Procurement would need to arrange to purchase goods so that they are delivered as required.

E : Firm infrastructure would need to arrange appropriate training courses for staff.

F : Technology development would need to ensure that processes are continually improving.

Answer: A,D

Question 4

One of an investment centre's products is sold on an external market. Output is limited because the specialist machine that manufactures the product is operating at full capacity.

Current data for the product are as follows.

Options :

A : $21,400

B : $17,800

C : $23,900

D : $26,160

Answer: A

Question 5

In order to remain competitive an organization wishes to achieve cost savings for one of its existing products.Which of the following correctly describes methods which the organization can use to achieve these cost savings?Select ALL that apply.

Options :

A : Functional analysis is carried out only on existing products and is concerned only with minimizing the cost of the originally defined functions of a product.

B : Value engineering is a fundamental rethinking and radical redesign of an organization-s existing processes.

C : Target costing is continuously setting new stretch targets while the product is in production.

D : Value analysis is examining a product-s costs in order to achieve its purpose at a reduced cost while maintaining its reliability and quality.

E : Kaizen costing is seeking to make cost savings by continuously making small incremental cost reductions while the product is in production.

Answer: A,D

Free CIMAPRA19-P02-1-ENG Mock Exam – Practice Online Confidently

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