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Part 2 Practice Exam 9

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CMA Part 2 Practice Exam 9

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Question 1 of 10

1. Question

A company sets prices using cost-plus pricing, adding a 35% markup to the full absorption cost of the product. If the full absorption cost per unit is $40, what selling price will the company set?

$14.00
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$61.54
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$54.00
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$40.35
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Question 2 of 10

2. Question

A company plans to launch a new product expected to sell for $60 per unit based on market research, and management requires a minimum profit margin of 25% of the selling price. Using target costing, what is the maximum allowable cost per unit for this product?

$48.00
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$15.00
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$75.00
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$45.00
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Question 3 of 10

3. Question

A company currently sells 20,000 units per month at a price of $25. Management is considering raising the price to $27.50. Market research indicates the price elasticity of demand for the product is 2.0. Based on this elasticity, what is the expected percentage change in quantity demanded?

−20%
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−10%
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−5%
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+20%
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Question 4 of 10

4. Question

A new government regulation increases compliance costs across an entire industry. Under a typical enterprise risk classification framework, this exposure is best classified as:

Strategic risk
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Compliance (legal/regulatory) risk
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Financial risk
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Hazard (pure) risk
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Question 5 of 10

5. Question

During risk assessment, a particular operational risk is found to have a high likelihood of occurring but a relatively low financial impact if it does occur. On a typical risk heat map, this risk would generally be plotted as requiring:

Immediate, intensive intervention by senior management
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No action at all, since likelihood alone does not warrant a response
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Routine monitoring and operational-level controls rather than extensive resources
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Risk transfer through insurance as the only acceptable response
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Question 6 of 10

6. Question

A company decides to discontinue an entire product line because management considers the potential product-liability exposure unacceptable, even though the product line is currently profitable. This risk response is best described as:

Risk acceptance
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Risk reduction
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Risk sharing
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Risk avoidance
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Question 7 of 10

7. Question

Which of the following best describes the role of the ‘Performance’ component in the updated COSO Enterprise Risk Management framework?

Identifying and assessing risks that may affect the achievement of strategy and business objectives
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Establishing the organization's mission, vision, and core values
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Reviewing entity performance results and revising the risk profile as conditions change
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Communicating risk-related information across the organization to relevant stakeholders
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Question 8 of 10

8. Question

After a company implements internal controls and purchases insurance to address an identified risk, the level of risk that remains is known as:

Inherent risk
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Residual risk
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Control risk
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Detection risk
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Question 9 of 10

9. Question

A project requires an initial investment of $250,000 and is expected to generate cash inflows of $70,000 per year for 6 years. The company’s required rate of return is 12%, and the present value annuity factor for 6 years at 12% is 4.111. What is the project’s Net Present Value (NPV)?

$287,770
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−$37,770
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$70,000
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$37,770
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Question 10 of 10

10. Question

A commonly cited criticism of using the Internal Rate of Return (IRR) method to compare mutually exclusive projects of significantly different sizes is that IRR:

Ignores the time value of money entirely
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Cannot be calculated for projects with uneven cash flows
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Always produces the same project ranking as NPV
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Implicitly assumes interim cash flows are reinvested at the project's own IRR
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Next: CMA Part 2 Practice Exam 10

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CMA Part 1

Practice Exam 1
Practice Exam 2
Practice Exam 3
Practice Exam 4
Practice Exam 5
Practice Exam 6
Practice Exam 7
Practice Exam 8
Practice Exam 9
Practice Exam 10

CMA Part 2

Practice Exam 1
Practice Exam 2
Practice Exam 3
Practice Exam 4
Practice Exam 5
Practice Exam 6
Practice Exam 7
Practice Exam 8
Practice Exam 9
Practice Exam 10

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