CMA ima questions part 1 Essay examples

6251 Words Nov 21st, 2014 42 Pages
CMA Part 1 – Financial Planning, Performance, & Control
Examination Practice Questions

© Copyright 2013 Institute of Certified Management Accountants

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

1. A company is preparing the sales budget for two potential products. Both products require the use of the same manufacturing equipment, which is only available for 60 hours each month. The contribution margin of product A is $95 per unit and the contribution margin of product B is $55 per unit. Product A requires 4 hours of machine time per unit and product B requires 2.5 hours per unit. In order to efficiently allocate the equipment resources, the company should manufacture
a.
b.
c.
d.

product A,
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Which one of the following best represents the sales pattern that Wheeler has experienced in the past three years?
a.
b.
c.
d.

Cyclical.
Irregular.
Seasonal.
Trend.

9. Ryotel is conducting market research to determine whether or not to launch a new product.
Management believes there is a 60% probability the research will yield favorable results with a 40% probability the results will be unfavorable. If the results are favorable, there is a 70% probability the product will be successful; if the results are unfavorable, the probability the product will be unsuccessful is 75%. If the product is successful, Ryotel anticipates annual profits of $10,000,000, but if the product is unsuccessful, Ryotel will lose $4,000,000 each year. The expected value of the new product’s annual profit is
a.
b.
c.
d.

$3,000,000.
$3,280,000.
$4,000,000.
$5,300,000.

© Copyright 2013 Institute of Certified Management Accountants

10. Last year, Bell Corporation’s sales totaled $200 million. In the current year Bell believes there is a 10% chance sales will decrease to $180 million due to the loss of a major customer, Rock Company. Bell also estimates there is a 40% probability sales will remain constant, a 30% chance sales will increase to $240 million, and a 20% probability sales will increase to $250 million. The expected value of Bell’s sales in millions for the

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