Free CMA-Strategic-Financial-Management Mock Exam – Practice Online Confidently

Marsalls Products Inc. manufactures and sells two products CD-ROMs and DVD's. The latest forecast on meproducts and their costs tor the coming year is shown in the following table.Note 1: Fixed manufacturing cost of Si.500 000 per year is allocated to products based on the number ofmachine hours required to produce the product at a rate of S3 per machine hourThe Manufacturing Team leader just informed the CEO that a fire occurred at one of the manufacturing linesand that line would be unavailable for the next 12 months. The result is that mere will only be 400 000machine Hours available The CEO requested the management team to revise the plan for the coming yearbased on the new constraint. The Marketing Team leader stated that in order to minimize customer complaintsabout the shortage, a minimum of 100,000 units of each product should be produced With the new informationfrom the Manufacturing and Marketing teams what is the optimal product mix for the coming 12 months''Assume Marsalls can sell allot its production.

Plenary Inc specializes in overnight package delivery. Total packages delivered last year were 10 000.000. and this quantity is expected to remain unchanged in the coming year. Unit contribution margin is $4,50 and total fixed costs are S40.000,000. The firm's 300 delivery truck drivers are seeking a S10 000 raise in annual salary In addition to a current base salary of $45 000 per year, the drivers receive a commission of $0 50 per package delivered If the firm grants the $10,000 salary increase to each driver and seeks to maintain the same level of pre-tax operating profit what is the maximum amount of commission the firm can pay its drivers per package delivered?

Which one or the following costs Is a variable product cost? 

L&H Sports owns and operates several stadiums used for baseball and soccer games Management is considering installing machines that would be used to roast peanuts on the premises. This equipment would allow L&H to sell freshly roasted peanuts rather than the pre-roasted peanuts that are currently sold Marketing studies suggest that this feature would increase peanut sales. The roasters can be purchased in several sizes, and the annual rental fees and operating costs vary with the size of the roaster Information about the roasters is shown below.L&H currently sells pre-roasted peanuts for $0 60 pet bag. Management plans to sell the freshly roasted peanuts for a higher price but at no more than a 10% increase. The demand for freshly roasted peanuts is estimated to be 250, 000 bags pet year. Which roaster should L&H purchase to maximize its profit?

Studler’s Restaurant is considering a contract to supply the weal senior citizen center with 10,000 meals. Regular sales at regular prices would be unaffected. The food cost for each meal s S3 Additional costs incurred as a result of the contract would De variable overhead of S 50 and variable selling general and administrative costs of S SO per meal sold. The selling price per meal would be $5, A total of $20,000 in fixed costs would be allocated at $2 per meal. The fixed costs are part of an overall total of $500,000 in annual fixed costs incurred regardless of the contract. What will be the effect on pretax income if Studiers takes the special order?