Question 1

Marsalls Products Inc. manufactures and sells two products CD-ROMs and DVD's. The latest forecast on me

products and their costs tor the coming year is shown in the following table.

Note 1: Fixed manufacturing cost of Si.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

The Manufacturing Team leader just informed the CEO that a fire occurred at one of the manufacturing lines

and that line would be unavailable for the next 12 months. The result is that mere will only be 400 000

machine Hours available The CEO requested the management team to revise the plan for the coming year

based on the new constraint. The Marketing Team leader stated that in order to minimize customer complaints

about the shortage, a minimum of 100,000 units of each product should be produced With the new information

from the Manufacturing and Marketing teams what is the optimal product mix for the coming 12 months''

Assume Marsalls can sell allot its production.

Options :

A : 100,000 CD-ROM-s and 150,000 DVD'[s

B : 120.000 CD-ROM-s 140,000 DVD.

C : 150.000 CD-ROMS and 125.000 DVD

D : 200,000 CD-ROm-s a dn 100,000 DVD

Answer: D

Question 2

Below is the income statement and balance sheet for a retail corporation.

CMA-Strategic-Financial-Management-page49-image5

What is the corporation’s return on equity in Year 2?

Options :

A : 23%

B : 26%

C : 39%

D : 48%

Answer: D

Question 3

A management accountant overheard the company's procurement manager discussing a kickback payment for one of the company s recent projects. The procurement manager promised to pay a share to the other person II the arrangement was kept confidential According to the IMA Statement of Ethical Professional Practice which one of the following is the most appropriate action for the management accountant to take?

Options :

A : Take no action since the incident is not related to the accounting department

B : Report the information directly to a nigh-level company executive since it is a serious matter

C : Call the company-s ethics helpline and report the matter anonymously

D : Discuss the incident with his or her own attorney and consider disassociating from the company

Answer: B

Question 4

IF a company does not have a code of conduct, the company most likely

Options :

A : is missing important guidance on ethical decision making

B : will lack an expressed statement of values regarding ethical behavior

C : can use its statement of values instead to implement ethics in daily decision making

D : must find another way to express its ethical principles

Answer: A

Question 5

Southwest Supplies Inc. (SSI) is considering the following two projects with cash-flows discounted at SSI's weighted average cost of capital.

CMA-Strategic-Financial-Management-page49-image10

SSI can only afford to invest in one of the projects. Which statement would most likely explain why SSI would choose Project B over project A?

Options :

A : Project B results in a higher cumulative accounting income

B : Project B generates significantly more non-cash expenses

C : Project B cash-flows are relatively more certain

D : Project B cash-flows are to be received sooner

Answer: D

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