Online Access Free P2 Practice Test

During a Board meeting at a manufacturing company, concerns regarding the analysing of the current inventory management systems and processes are brought up.
Attendees of the meeting have made several claims and suggestions but the managing director admits that he does not know who to believe and so has asked you to let him know which statements of the following statements are TRUE?
Select ALL that apply.

• A.ABC is ideal for organisations running a JIT inventory system
• B.Standard costing is ideal for organisations in a TQM environment
• C.A JIT inventory system reduces inventory costs
• D.Standard Costing is ideal for organisations running a JIT inventory system
• E.A JIT system is likely to result in economies of scale

Place each performance measure against the correct perspective of the Balanced Scorecard for a company that operates a chain of hotels.

Correct Answer:

In order to support decision making, management accounting information categorizes costs in a variety of ways.
Responsibility accounting primarily distinguishes between costs on the basis that they are either:

• A.fixed or variable costs
• B.sunk or opportunity costs
• C.controllable or uncontrollable costs
• D.relevant or non-relevant costs

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

• A.Managers are given incentives to meet or undercut budgets.
• 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 encouraged to designate responsibility to others to lessen their workload so they may concentrate on important tasks.
• F.Managers are set goals and targets to achieve rather than abiding by strict budgets and variances.

Which TWO of the following statements are correct?

• A.Price is the only factor affecting the demand for products and services.
• B.Premium pricing is possible when there is a measure of product or service differentiation.
• C.It is worthwhile for a company to sell further units when the marginal revenue is greater than the marginal cost.
• D.Loss leadership pricing is appropriate for a new product which is not part of a range of products.
• E.Demand functions can be predicted accurately and the relationship between price and quantity demanded is always constant.