IMA CMA Part 1: Financial Planning - Performance and Analytics Sample Questions:

1. The best way to illustrate the entire distribution of numerical data for a single variable is with a

A) heat map
B) pie chart
C) bubble chart
D) histogram

2. Marsalis Products Inc. manufactures and sells batteries and cables for computers. The latest information on the products and their costs is shown in the following table.

Note: 1 Fixed manufacturing cost of S1.500,000 per year is allocated to products based on the number of machine hours required to produce the product at a rate of S3 per machine hour.
Based on the information above, what is the annual amount of earnings before interest and taxes (EBIT)?

A) $4,420,000.
B) $2,960.000.
C) $2,920,000.
D) $1,460,000.

3. Edward Pane is an external auditor who is seeking an understanding of the cash receipts process at his new client Pane decides to use a flowchart to analyze the operations for efficiency and control. Which one of the following statements is true with respect to the decision to use a flowchart for this purpose?

A) Pane should not have selected a flowchart as it is better suited to help with compliance testing of existing controls
B) Pane properly selected the flowchart as it will help to depict the process and identify any missing or inadequate controls
C) Pane property selected the flowchart as a tool to match each of the risks to the corresponding primary control
D) Pane should not use a flowchart as it is used primarily after the risks have been identified

4. Lewis Farms inc, is a large grower of vegetables in Northern California. During a year in which there is no drought the firm earns S3 million from its produce In a year with a partial drought, earnings are $1 million and if there is a severe drought, the firm has zero earnings Based on many years of weather data, in 50% of the years there was no drought in 30% of the years there was a partial drought, and a severe drought occurred 20% of the time. Lewis Farms has an opportunity to purchase an insurance policy that would pay Lewis $2 million in the event of a severe drought $1 million in the case of a partial drought, and nothing in the event there is no drought ignoring taxes, the maximum premium that Lewis would be willing to pay for the policy is

A) $1, 500, 000.
B) $700,000.
C) $1, 200, 000.
D) $500,000.

5. Trans Action inc. (TAI) is a multidivisional supplier of power train components to the automobile industry.
Following is selected information for the year just ended for each of the three divisions. Gear Axle and Housing.

The tai Board of Directors has decided to reward the employees or the divisions by allowing them to share in a bonus pool equal to S100.000 for each percentage point the return on investment (ROI) earned by their division exceeded the ROI of comparable firms as shown in the table below.

Rank the amounts in the bonus pools for the respective divisions from highest to lowest.

A) Gear. Housing, Axle
B) Axle, Housing, Gear
C) Axle, Gear, Housing
D) Housing, Axle, Gear.

Solutions: