Free Practice CIMA CIMAPRA19-P02-1-ENG Exam Questions 2025

Stay ahead with 100% Free P2 Advanced Management Accounting (Online) CIMAPRA19-P02-1-ENG Dumps Practice Questions

Page: 1 / 41

Total 205 Questions | Updated On: Jan 28, 2025

Add To Cart

Question 1

Division A is an investment centre with assets of $7.3 million. The following is an extract from the annual budget for division A:

The cost of capital is 14%.
Calculate the residual income for division A.

A : $808,000

B : $1,727,800

C : $358,000

D : $2,008,000

Answer: A

Question 2

GHY has two subsidiaries. GHY-Motor manufactures car engines and GHY-Build designs and assembles cars. In the car industry it is common for manufacturers to buy parts, including engines, from other manufacturers.
GHY has granted GHY-Motor and GHY-Build full autonomy. GHY-Build is considering using an engine from another company for a new model that it is designing. GYY-Motor has a suitable engine, but it charges more than GHY-Build's preferred supplier.
Which of the following statements is correct? Select ALL that apply.

A : GHY should consider permitting GHY-Motor to charge part of the selling price on engines sold to GHY-Build to head office.

B : Forcing GHY-Motor to grant a discount to GHY-Build could lead to dysfunctional behavior.

C : There could be significant non-financial issues associated with GHY-Build's decision to buy another engine.

D : Parent companies should never grant subsidiaries full autonomy on matters such as intra-group sales.

E : The threat of dysfunctional behavior is largely theoretical and managers can be trusted to maximise shareholder wealth.

Answer: A,B,C

Question 3

A company is investing $150,000 in a project which will yield an annual cash inflow of $40,000 for eight years. The company's cost of capital is 10%.
To the nearest $100, what is the project's equivalent annual net present value?

A : $11,900

B : $7,900

C : $63,400

D : $21,300

Answer: A

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.

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.

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

Page: 1 / 41

Total 205 Questions | Updated On: Jan 28, 2025

Add To Cart