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CIMA Updated P2 Exam Questions and Answers by wiktor

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CIMA P2 Exam Overview :

Exam Name: Advanced Management Accounting
Exam Code: P2 Dumps
Vendor: CIMA Certification: CIMA Management
Questions: 202 Q&A's Shared By: wiktor
Question 12

Which of the following statements regarding multinational transfer pricing is INCORRECT?

Options:

A.

Transfer prices affect tax liabilities and royalties because of different laws in countries.

B.

If transfer prices are inflated, this will increase profits of buying division.

C.

Companies have incentives to set transfer price to increase revenues in low-tax countries.

D.

Companies have incentives to set transfer price to increase costs in high-tax countries.

Discussion
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Question 13

A new product is being manufactured for the first time. The first unit required 600 minutes of labor to manufacture. It is expected that there will be a 90% learning curve for the first 20 units.

The learning index for a 90% learning curve is - 0.152.

Calculate the expected labor time to manufacture the 10th unit.

Your answer should be given to the nearest whole minute.

Options:

Discussion
Question 14

Which of the following is a key objective when agreeing a basis for setting transfer prices?

Options:

A.

Promoting goal congruence

B.

Increasing market share

C.

Rewarding profit centre managers

D.

Allocating overhead costs effectively

Discussion
Question 15

Endure Co. makes 1,000 units ofX and 2,000 units of Y.

Costs for X: Material $4, labour $8, direct overhead $2, fixed cost $4.

Costs for Y: Material $9, labour $9, direct overhead $4, fixed cost $6.

Selling price for X and Y are S19 and $25 respectively. Another company can sell ready made product X and product Y's to Endure Co, this company sells X at $12 and Y at $21. Advise Endure Co. on what would be the

most cost effective way to source products X and Y.

Options:

A.

Endure should buy X and Yfrom the other supplier.

B.

Endure should buy X but produce Y themselves.

C.

Endure should produce both X and Y themselves.

D.

Endure should buy Y but produce X themselves.

Discussion
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