cima cimapro19 p03 1 practice test

DRAG DROP
V buys vegetables and fruit from three farms located in a different part of V's country and sells them
to large supermarket chains.
A recent newspaper magazine had an article on these farms showing that the farms employ illegal
immigrants whose status was used by the factory's owners to force them to work for low wages and
in unpleasant conditions. They are forced to live in small overcrowded caravans with no running
water. They are also given meals which are cold and poor quality. These farms are located in a
developed country with strong labour laws.
Classify each of the following statements as true or false.

W is a construction company which undertakes large projects for governments and other clients
worldwide.  Following extensive tendering processes, contracts are issued for successful tenders, and
projects typically take three to five years to complete. Contracts are normally fixed-price and many
have considerable penalty clauses.
Which of the following would be appropriate policies and controls for W to implement?

• A. Unsuccessful tenders should be analysed to establish the cause of them failing to be awarded the work and help to avoid future failures.
• B. Ensuring a consistent separation of duties between those involved in the preparation of tenders and those involved in the planning of projects.
• C. Ensuring that the minimum legal wage is paid to all workers on the construction sites.
• D. In order to ensure the maximum chance of winning the contract, tenders always commit W to completing the work at the lowest possible price and in the shortest possible time.
• E. Contract terms should be worded precisely so that additional work is not deemed to form part of the contract.
• F. The project steering committee and project board should receive regular project status reports.

DRAG DROP
H sells machinery and also associated services, such as advice and repairs. H's industry is going
through considerable transformation.
Classify each of the examples of information available to H's management as strategic, operational or
of having little value.

H Ltd is a company providing postal and courier services to small businesses. Customers pay a
monthly or annual subscription fee to use the service, plus a very small fee for each item delivered.
A year ago, H employed a new sales team. Their remuneration is dependent on the number of new
customers they sign up. Sales increased dramatically in the first six months, but now difficulties are
emerging such as new customers dropping their subscription once the initial period has expired;
subscriber direct debits being returned unpaid; subscribers going out of business and other similar
issues.
Which of the following would be appropriate to help resolve these problems?

• A. Alter the pricing structure in order to increase the price for sending each item but decrease the subscription element of the fee.
• B. Ensure that a credit check is carried out before a subscriber is accepted.
• C. Reduce the rate of commission payable to any sales person who fails to sign up at least an agreed minimum number of customers each month.
• D. Alter the commission arrangements so that commission is payable only when the subscriber signs up for a second year.
• E. Preparing a monthly report for sales persons detailing the performance of each new customer they have signed up over the previous year.

M plc is an IT company that bids for large contracts to sell computer systems and also to
service existing systems. M plc's senior management has always set budgets which are hard to
achieve and have made no allowances for the recession.
The economy has improved and M plc's senior managers have made the budget even more
optimistic. The budgeted sales target has been increased by 40%.
In the past, sales staff have not tried to achieve the budget sales because it was generally believed
that the targets were impossible to reach.
M plc has recently appointed a new Sales Director who has decided that sales staff will
be dismissed if they fail to meet sales targets for three successive months. He is also looking
for higher sales margins than were achieved before.
What are the likely consequences of the new Sales Director's policy?

• A. Sales staff will be happier in their jobs.
• B. Sales staff will tender for riskier contracts.
• C. Sales staff will encroach on other sales staff territories to get more work.
• D. Sales staff will look for new jobs.
• E. Sales staff will feel more settled and secure in their jobs.

A large, publicly funded university is considering introducing a new information system in order to
enhance its ability to store and retrieve academic records for past and current students, including the
registration and deregistration of students.
In conducting an evaluation of the system, which THREE features would the management of the
college be most likely to consider as essential prerequisites to implementation?

• A. The system has the capacity to deal with all existing records and all new records to be created in the foreseeable future.
• B. The system is capable of being run in parallel with the current system so as to have the opportunity to examine and overcome any unforeseen difficulties that might arise.
• C. The system has been demonstrated to operate with a degree of accuracy at least as good as the existing system and as good as that used by similar universities.
• D. The system can link seamlessly with the system used by the university for processing financial transactions and producing financial statements.
• E. All information on the system can be accessed easily from outside the university through the internet.

You have just been appointed Financial Controller of Y, a marketing consultancy.
You are in a meeting with the Chief Executive Officer (CEO) of Y, and have been discussing the need
for a major upgrade of all the information systems throughout Y, as they are all very old.
Knowing that major change should be managed effectively, you have suggested that Y should have a
'systems steering committee'.
Advise the CEO which of the following should be included in the terms of reference of the steering
committee.

• A. Plan for new systems
• B. Develop new systems
• C. Manage the project
• D. Consider the competitive issues raised by the new system
• E. Ensure the new system will meet the company's goals

H is a senior production manager for P Ltd which is about to make a strategic decision on setting up a
new production line requiring $3 million of new specialist equipment.
H's daughter is friends with and goes to school with the daughter of T, the sales manager in KK Ltd.
KK Ltd is a potential supplier of the specialist equipment that P Ltd requires.
T owns a holiday home. H's daughter regularly accompanies T's daughter on family vacations at this
holiday home, all at T's expense.
H is the only person working for P Ltd who is qualified to select the specialist equipment. KK Ltd will
definitely bid for the sale.
What should H do?

• A. H should exclude KK Ltd from the bidding process.
• B. H should declare an interest and withdraw from the assessment process.
• C. H should permit KK Ltd to bid, but should insist that T should not be involved.
• D. H should declare an interest, giving details of his daughter's friendship with T's daughter, but should participate fully in the assessment process.

You are the Management Accountant for P, a food manufacturing company with an annual sales
revenue of $5 million.
You discover that the Production Manager's records are inconsistent. Raw materials purchased do
not agree to the total recorded for transfers to production plus wastage. There is an average shortfall
of 2% of purchases.
You investigated and discovered that there are often mistakes made during manufacturing that
results in food that is safe to eat, but cannot be sold because of visual flaws. The Production Manager
is supposed to scrap all such damaged product and write all such losses off as waste, but you
discovered that he has been giving the damaged food to a charity that assists homeless people. No
records are made of such gifts in order to conceal the losses due to manufacturing errors.
What should you do?

• A. Do nothing, this is a good cause and the amount is insignificant.
• B. Instigate disciplinary action, this is both theft and poor management.
• C. Instigate a confidential, but documented, review with the Production Manager and tell him to stop.
• D. Instigate a review of the production process to potentially reduce the amount of wastage.
• E. Instigate a process whereby edible but unsellable items can be given to the charity officially.

W plc is a large international supermarket chain. It has many thousands of suppliers and many
thousands of others competing for "shelf space" in its supermarkets.
Which of the following would be appropriate provisions for W plc to include in its Ethical Code in
relation to its suppliers?

• A. W plc shall not use its buying power unscrupulously.
• B. W plc shall endeavour to adhere to the terms of its contracts with its suppliers at all times.
• C. W plc shall keep confidential all information received from suppliers and potential suppliers.
• D. W plc shall continuously remind suppliers that it always has several alternative suppliers to choose from.
• E. W plc shall endeavour to take as high a percentage of each supplier's output as possible.
• F. W plc shall insist on an exclusivity agreement with each supplier so that identical products are not available from other outlets.