Division A and Division B are divisions of the same group. Division A transfers all of its output to Division B.

Which THREE of these alternative transfer pricing bases will prevent any cost inefficiencies in Division A being passed on to Division B?

A. Standard variable cost

B. Actual full cost

C. Actual prime cost

D. Market price

E. Actual variable cost

F. Standard variable cost plus a profit margin

In accordance with a just-in-time (JIT) philosophy, which of the following is regarded as a value added activity?

A. Inspecting raw material deliveries

B. Moving work in progress around production facilities

C. Holding inventory

D. Dispatching products to customers

Residual income is an appropriate performance measure for which type of responsibility centre?

A. Cost centre

B. Revenue centre

C. Investment centre

D. Profit centre

Kaizen costing is being used by an organization to gradually reduce the unit cost of one of its products in order to achieve a 20% mark up on the product's cost. The selling price of the product must be $72 per unit and this selling price has

been maintained for two years.

Two years ago the product's cost was $3 per unit more than its selling price. Kaizen costing has achieved an 8% reduction from the previous period's unit cost in each of the past two years. The organization expects to continue to achieve the

same rate of cost reduction next year. Which of the following statements provides an accurate analysis of the extent to which Kaizen costing has been successful in achieving the required unit cost for the product?

A. Kaizen costing has successfully achieved the necessary cost reduction.

B. The current cost is $63.00 per unit and the required unit cost will be achieved next year.

C. Kaizen costing has not yet achieved the required unit cost of $57.60 because a greater rate of reduction in costs was needed.

D. The current cost is $63.48 per unit and the required unit cost will be achieved next year.

A company has just launched a new product at a selling price that is designed to rapidly gain market share and to discourage other competitors from entering the market. Which pricing strategy is the company using?

A. Penetration pricing

B. Loss leader

C. Market skimming

D. Premium pricing

Which of the following statements is correct?

A. Risk can be quantified and probabilities can be assigned reliably to the possible outcomes.

B. Uncertainty cannot be quantified and probabilities can be assigned reliably to the possible outcomes.

C. Risk cannot be quantified and probabilities cannot be assigned reliably to the possible outcomes.

D. Uncertainty can be quantified and probabilities can be assigned reliably to the possible outcomes.

A large company that sells a single product has many customers. The contribution per unit of the product is $40. Data for the company as a whole are given below.

Using customer profitability analysis, what is the total annual profit for this customer?

A. $1,660,000

B. $1,780,000

C. $1,460,000

D. $2,340,000

Which of the following statements are fundamental concepts that underlie the Beyond Budgeting approach?

1.

Use traditional budgeting in conjunction with other techniques.

2.

Use adaptive management processes rather than the more rigid annual budget.

3.

Move towards devolved networks rather than centralized hierarchies.

4.

Move towards centralized hierarchies rather than devolved networks.

A. Statements 1 and 2 apply.

B. Statements 1, 2 and 3 apply.

C. Statements 2 and 3 apply.

D. Statements 2, 3 and 4 apply.

Which TWO of the following expressions are correct?

A. 1 + money rate = (1 + real rate) x (1 + inflation rate)

B. 1 + real rate = (1 + money rate) / (1 + inflation rate)

C. 1 + real rate = (1 + inflation rate) / (1 + money rate)

D. 1 + money rate = (1 + inflation rate) / (1 + real rate)

E. 1 + inflation rate = (1 + money rate) x (1 + real rate)

SkillWeave are an international clothing manufacturer known for their durable and high quality products. Recently their biggest market in the world's premier customs union has had some economic volatility. This has resulted in the currency of this market being very unstable and difficult to predict in terms of whether it will retain, lose or gain relative value to domestic currency. Which of the following is an effective risk reduction technique for SkillWeave's clothing sales to this region?

A. Pay part suppliers from the region in their currency, generated from sales in the region

B. Temporarily stop producing for and selling cars to the region

C. Pay part suppliers from the region in domestic currency, generated from sales in the region

D. Buy parts domestically to avoid using the region's currency