Free CIMA P2 Practice Exam with Questions & Answers | Set: 6

An organization's transfer pricing system involves:

• The transferring division receiving $20 per unit; an amount equal to its variable costs.

• The receiving division paying an additional $30,000 every month to the transferring division.

Which transfer pricing system is the organization using?

Company D is about to launch an innovative and unique product which may face direct competition within three years. The company needs to achieve a rapid payback on all investments because it has limited access to external finance.

Which is the most appropriate pricing strategy for company D's new product, and for what reason?

Which of the following would change if the cost of capital of a proposed project was increased?

Performance measures that monitor the extent to which a not-for-profit organization's objectives have been achieved are measures of:

Which of the following statements is true?

An 80% learning curve is expected for a repetitive and complex task.

Which of the following statements is correct?

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A company is considering the replacement of its outdated information system.

Which of the following are appropriate approaches for the company to take to assess the potential qualitative benefits of a replacement information system?

(1) Ignore the qualitative benefits that may arise because there is too much subjectivity involved in their assessment.

(2) Attempt to attribute monetary values to each of the qualitative benefits identified.

(3) Acknowledge the existence of qualitative benefits and attempt to assess them in a reasonable manner that is acceptable to all parties.

(4) Attempt to express qualitative benefits in general terms linked to a hierarchy of organizational objectives.

An organization wants to increase the use value that customers place on one of its products - a laptop computer.

Which of the following actions, taken to increase the value to the customer, would increase the product's use value?

Select ALL that apply.

Which of the following investment appraisal methods provides an absolute monetary value on which to base decisions?