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| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Cost Management | 15% | - Cost Concepts and Methodologies
|
| Topic 2: External Financial Reporting Decisions | 15% | - Recognition, Measurement and Valuation
|
| Topic 3: Performance Management | 20% | - Performance Evaluation
|
| Topic 4: Technology and Analytics | 15% | - Technology and Data Analysis
|
| Topic 5: Planning, Budgeting, and Forecasting | 20% | - Planning and Forecasting
|
| Topic 6: Internal Controls | 15% | - Governance and Control
|
1. An analytic model that seeks to find variables in a data set that will enable customer segmentation is a
A) market basket analysis
B) prediction analysis
C) classification analysis
D) clustering analysis
2. Discuss how FDL's allocation of shared corporate services costs may overstate the profitability of the Food-To-Go division, and provide your recommendation on shared corporate services costs allocation.
Essay
Food Depot Ltd (FDD is a privately-held company that provides catering services to airlines and operates several restaurant chains including fast food, casual dining, and fine dining restaurants FDL has been profitable m recent years and has a very strong cash position FDL's newest division. Food-To-Go. is an online meal ordering and delivery platform acquired by FDL two years ago.
In 20X7. sales for the entire company were SI billion, with 50% of the business coming from the Airline Catering division. FDL is the country's leading airline catering services provider and controls 60% of the market share. However, the outlook of the airline catering industry is gloomy. The compound annual growth rate of the industry for the past five years was only 0.5% as airline networks have increasingly dropped catering on short domestic flights.
The Food-To-Go division only contributed 5% of FDL's total sales in 20X7 and is far behind in competing for market share of the online meal ordering and deliver, industry. It is estimated that Food-To-Go's sales were only 20% of the industry leader's sales However, the outlook for the online meal ordering and delivery services industry is bright. The compound annual growth rate of the industry since it started three years ago was 50%. It is estimated the rapid growth of the industry will continue in the foreseeable future.
The costs of shared corporate services are allocated based on each division s revenue FDL usually caps its capital expenditure budget to 4% of budgeted sales revenue In a recent capital budget coordination meeting.
Smith Whitney, the head of the Airline Catering division. complained that his division is underfunded on capital projects . The budgeted capital expenditure had been much less than 4 % of the division's budgeted sales in the past three years He argued that his division is the company's best-performing division, and it needs more funds to maintain its market share m the industry Whitney wants to reduce the capital expenditure budget for Food-To-Go and reallocate those funds to his division.
Susan Wiley, the bead of Food-To-Go, does not agree that the Airline Catering division is the best-performing division in the company Wiley argues that her division had the highest ROI in 20X7. and it deserves more capital funding FDL's required rate of return is 12%. The selected financial data for the Airline Catering division and Food-To-Go division in 20X7 are as follows (in $ millions).
3. Which one of the following best describes the difference between a normal costing system and an actual costing system?
A) Direct labor cost is estimated using a predetermined rate under a normal costing system, while it is the actual value under an actual costing system.
B) Factory overhead cost is estimated using a predetermined rate under a normal costing system, while it is me actual value under an actual costing system.
C) Both direct labor cost and direct material cost are estimated using a predetermined rate under a normal costing system, while they are the actual value under an actual costing system
D) Direct material cost is estimated using a predetermined rate under a normal costing system while it is the actual value under an actual costing system
4. To prevent cyoeratiacks. a company recently implemented penetration testing wnich one of tne following statements best descnbes this test?
A) An email testing employee compliance with phishing guidelines
B) An authorized attempt to break through the company's firev.au
C) A series of attempts to flood the company's network with traffic
D) A staged break-in of the company s server room after business hours
5. A manufacturing company is considering implementing activity-based costing. Which one of the following statements is a valid consideration when making this change?
A) An activity-based costing system is more costly to maintain than a traditional costing system
B) Companies that make diverse products are least likely to benefit from activity based costing
C) Activity-based costing systems may not replace traditional costing systems used for prepar.ng external financial statements.
D) In an activity-based costing system, all costs including idle capacity costs, are allocated to products, customers and other costing objects
Solutions:
| Question # 1 Answer: A | Question # 2 Answer: Only visible for members | Question # 3 Answer: B | Question # 4 Answer: B | Question # 5 Answer: A |
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