Question No 44:
Company S has two divisions, X and Y. Division X transfers 50,000 component units to Division Y each quarter. The market price of the component is $20. Division X's variable cost is $10 per unit and its fixed cost is $150,000 each quarter.
What price would be credited to Division X for each component that it transfers to Division Y under: two-part tariff pricing (where the two divisions have agreed that the fixed fee will be $100,000); and dual pricing (based on market price and marginal cost).
A. Two-part tariff pricing = $10
Dual pricing = $22
B. Two-part tariff pricing = $12
Dual pricing = $18
C. Two-part tariff pricing = $10
Dual pricing = $20
D. Two-part tariff pricing = $13
Dual pricing = $22
Answer: C
Thursday 19 May 2016
Sunday 15 May 2016
New CIMA Board Member Appointed
The Council cites Monetary Authority of the Cayman Islands, held in late March, was confirmed by the government this week.
Mr. MacDonald will replace Greenlight Re Brian Murphy, who was appointed to the board, but later said it was not able to serve because of other commitments.
Financial Services Minister Wayne Panton, which is responsible for overseeing the operations of the Monetary Authority of the Cayman Islands, said he was looking for someone with experience in the insurance industry to serve at the table "CIMA administration.
MacDonald served as CEO of Island Heritage Insurance 2007-2013, when he retired.
Before moving to the Cayman Islands in 1994, MacDonald worked with KPMG and international insurance group. He holds a degree in finance and accounting and accounting referee.
Thursday 12 May 2016
Cima P2 Exam Question 43
Question No 43:
The following cash flows are forecast for a potential investment project.
The cost of capital for the project is 12% per year and the company uses a straight line depreciation policy.
What is the modified internal rate of return (MIRR) of the project?
Give your answer to the nearest whole percentage.
Answer: 19%
The following cash flows are forecast for a potential investment project.
The cost of capital for the project is 12% per year and the company uses a straight line depreciation policy.
What is the modified internal rate of return (MIRR) of the project?
Give your answer to the nearest whole percentage.
Answer: 19%
Thursday 5 May 2016
Cima P2 Exam Question 42
Question No 42:
Beyond Budgeting is essentially an approach that places modern management practices within a cultural framework. Analyze the following statements:
1. The organization structure should have clear principles and boundaries.
2. Managers should be given a high degree of freedom to make decisions.
3. Frontline managers should be made responsible for relationships with customers.
4. Information system should be transparent and ethical.
Which of the above statements relate to Beyond Budgeting?
A. 1, 2 and 4 only
B. 2, 3 and 4 only
C. 1, 2 and 3 only
D. All the statements
Answer: D
Beyond Budgeting is essentially an approach that places modern management practices within a cultural framework. Analyze the following statements:
1. The organization structure should have clear principles and boundaries.
2. Managers should be given a high degree of freedom to make decisions.
3. Frontline managers should be made responsible for relationships with customers.
4. Information system should be transparent and ethical.
Which of the above statements relate to Beyond Budgeting?
A. 1, 2 and 4 only
B. 2, 3 and 4 only
C. 1, 2 and 3 only
D. All the statements
Answer: D
Sunday 1 May 2016
Numbers not Adding Up
Economic study counters around the world, including the Caribbean, it was found that most companies are reducing employment and investment.
And the latest study of global economic conditions published by the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants also indicated that 69 percent of respondents in this part of the world feel less optimistic about conditions economic in the first quarter of this year.
"The problems are particularly acute in the largest economy in the region, Brazil, where the president seems [Dilma] Rousseff is on the prosecution and [gross domestic product] will shrink 5.9 percent [one year] in the fourth district according to government figures, "said the report.
"The parts of the Caribbean, including Trinidad and Tobago, also suffered as prices of raw materials fell, which helps explain why our rate of government expenditure pending the region fell during the last year.
"A recovery of the amount and demand for financial services of tourism [US], meanwhile, should help these economies in the Caribbean - as Barbados, Jamaica and the Cayman Islands - where prices commodities are less important" .
Overall, the survey found that more than half of the companies are either cutting or freezing employment, while only 14 percent increase investment in personnel.
In response to the results, Faye Chua, director of ACCA business concentration, said, "Take the North America of the equation and the economic picture painted by this survey is not enough Emerging markets are under siege Sales of raw materials companies.. trade have collapsed since mid 2014. And in China business confidence fell to its lowest level since our records began.
"Almost half of the companies reported lower revenues in each district. As a result, all regions except North America has seen an increase in the number of capital spending by reducing the AT- companies added.
"With emerging economies continues to struggle with the prices of basic and numerous companies in a locking overhead products, the outlook for the global economy is increasingly bleak."
He noted that this is the so-called emerging markets that have been "suffering the most substantive lines being squeezed."
The official also said pulling the global economy out of the doldrums could not be achieved in the short term.
And the latest study of global economic conditions published by the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants also indicated that 69 percent of respondents in this part of the world feel less optimistic about conditions economic in the first quarter of this year.
"The problems are particularly acute in the largest economy in the region, Brazil, where the president seems [Dilma] Rousseff is on the prosecution and [gross domestic product] will shrink 5.9 percent [one year] in the fourth district according to government figures, "said the report.
"The parts of the Caribbean, including Trinidad and Tobago, also suffered as prices of raw materials fell, which helps explain why our rate of government expenditure pending the region fell during the last year.
"A recovery of the amount and demand for financial services of tourism [US], meanwhile, should help these economies in the Caribbean - as Barbados, Jamaica and the Cayman Islands - where prices commodities are less important" .
Overall, the survey found that more than half of the companies are either cutting or freezing employment, while only 14 percent increase investment in personnel.
In response to the results, Faye Chua, director of ACCA business concentration, said, "Take the North America of the equation and the economic picture painted by this survey is not enough Emerging markets are under siege Sales of raw materials companies.. trade have collapsed since mid 2014. And in China business confidence fell to its lowest level since our records began.
"Almost half of the companies reported lower revenues in each district. As a result, all regions except North America has seen an increase in the number of capital spending by reducing the AT- companies added.
"With emerging economies continues to struggle with the prices of basic and numerous companies in a locking overhead products, the outlook for the global economy is increasingly bleak."
He noted that this is the so-called emerging markets that have been "suffering the most substantive lines being squeezed."
The official also said pulling the global economy out of the doldrums could not be achieved in the short term.
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