Hock Section B Questions.pdf - Hock 2020 Part 1 Section B Planning Budgeting and Forecasting Questions Strategic Planning Budgeting Concepts Forecasting

Hock Section B Questions.pdf - Hock 2020 Part 1 Section B...

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Unformatted text preview: Hock 2020 Part 1 Section B - Planning, Budgeting, and Forecasting. Questions Strategic Planning Budgeting Concepts Forecasting Techniques - Regression Analysis Forecasting Techniques - Learning Curves Forecasting Techniques – Probability Budget Methodologies Annual Profit Plan and Supporting Schedules Top-Level Planning and Analysis 34 49 15 24 34 30 108 15 309 Strategic Planning 1. Question ID: ICMA 19.P1.016 (Topic: Strategic Planning) A company is in the process of developing its mission statement. Which one of the following is least appropriate for a company’s mission statement? A. Defining the purpose of the company. B. Promoting a common shared goal on the part of employees. C. Identifying what product or service the company is providing. D. Explaining the tactics for increasing market share in a specific region. 2. Question ID: ICMA 19.P1.017 (Topic: Strategic Planning) A company sells a product that is aimed at the broad mass market but is perceived as unique throughout its industry. The company is earning above average returns on the product. Which one of the following is the most appropriate term for the competitive strategy followed by the company? A. Market focus. B. Differentiation. C. Financial leadership. D. Cost focus. 3. Question ID: ICMA 19.P1.018 (Topic: Strategic Planning) The concurrent action of basic competitive forces as defined by Porter’s 5 forces model determines the A. long-term profitability and the competitive intensity of the industry. B. strategy that a firm should follow to achieve its objectives. C. entrance barriers that potential players must face to get into the industry. D. rivalry inside the industry. ‫ﻛﻝ ﺍﻟﻛﺗﺏ ﻭﺍﻻﺳﺋﻠﻪ ﺍﻟﻠﻲ ﺗﺣﺗﺎﺟﻭﻫﺎ ﺣﺗﻼﻗﻭﻫﺎ ﻋﻠﻰ ﺍﻟﻘﻧﺎﺗﻳﻥ ﺩﻭﻝ‬ Hock 2020 Part 1 Section B - Planning, Budgeting, and Forecasting. Questions 4. Question ID: ICMA 19.P1.019 (Topic: Strategic Planning) After leading the market for the past decade, the growth of product ABC is slowing down. In this stage of its life cycle, the product is still generating significant amounts of cash flows that cover the company’s investment into new product innovations. According to the BCG Growth-Share Matrix, product ABC is most likely an example of a A. dog. B. star. C. question mark. D. cash cow. 5. Question ID: ICMA 19.P1.015 (Topic: Strategic Planning) The management of a food-processing company is analyzing its internal strengths and weaknesses as part of its strategic planning process. Which one of the following is most likely considered a strategic internal variable for the company? A. Technological changes in food-processing methods. B. The economic forces that regulate the local labor supply. C. Changes in the legal code for food processors. D. The culture at the company’s food-processing plant. 6. Question ID: HOCK CMA P3A H9 (Topic: Strategic Planning) When the organization develops a plan or plans to prepare for future, often unpredictable events, it is called: A. Contingency planning. B. Long-term business planning. C. Capital budgeting. D. Short-term business planning. 7. Question ID: HOCK CMA P3A H2 (Topic: Strategic Planning) Which of the following is not a significant reason for planning in an organization? A. Forcing managers to consider expected future trends and conditions. B. Promoting coordination among operation units. C. Enabling selection of personnel for open positions. D. Developing a basis for controlling operations. 8. Question ID: ICMA 1603.P1.025 (Topic: Strategic Planning) Analyzing a company's technological capabilities, employee skills, and sales team performance will provide A. external factors that identify the company's strengths and threats. B. external factors that identify the company's strengths and weaknesses. C. internal factors that identify the company's strengths and opportunities. ‫ﻛﻝ ﺍﻟﻛﺗﺏ ﻭﺍﻻﺳﺋﻠﻪ ﺍﻟﻠﻲ ﺗﺣﺗﺎﺟﻭﻫﺎ ﺣﺗﻼﻗﻭﻫﺎ ﻋﻠﻰ ﺍﻟﻘﻧﺎﺗﻳﻥ ﺩﻭﻝ‬ Hock 2020 Part 1 Section B - Planning, Budgeting, and Forecasting. Questions D. internal factors that identify the company's strengths and weaknesses. 9. Question ID: HOCK CMA P3A H28 (Topic: Strategic Planning) According to the BCG Growth-Share Matrix, all of the following are included in product life-cycle strategies except: A. "Milking" the product. B. Superior responsiveness to customers. C. Increase investment in the product to maximize market share. D. Aggressive pricing to increase market share quickly. 10. Question ID: HOCK CMA P3A H15 (Topic: Strategic Planning) The sources of a company's distinctive competencies are: A. High profitability and sustained profit growth. B. The company's resources and capabilities. C. The company's prior strategic commitments. D. The company's threats and opportunities. 11. Question ID: ICMA 1603.P1.034 (Topic: Strategic Planning) During the strategic planning process, which one of the following is an external factor to be analyzed? A. Societal culture. B. Organizational culture. C. Organizational structure. D. Employee morale. 12. Question ID: HOCK CMA P3A H8 (Topic: Strategic Planning) It could be argued that the reason a company has succeeded in a very competitive market while its rivals have failed is because: A. The successful company has adopted more steps to its formal strategic planning process. B. The strategies that the successful company pursues have a strong impact on its performance relative to its rivals. C. The company has evolved into a multi-divisional organization. D. The company has adopted a strategy with a low propensity for risk-taking. 13. Question ID: CMA 692 H9 (Topic: Strategic Planning) Strategy is a broad term that usually means the selection of overall objectives. Strategic analysis ordinarily excludes the A. Target product mix and production schedule to be maintained during the year. B. Forms of organizational structure that would best serve the entity. C. Best ways to invest in research, design, production, distribution, marketing, and administrative activities. ‫ﻛﻝ ﺍﻟﻛﺗﺏ ﻭﺍﻻﺳﺋﻠﻪ ﺍﻟﻠﻲ ﺗﺣﺗﺎﺟﻭﻫﺎ ﺣﺗﻼﻗﻭﻫﺎ ﻋﻠﻰ ﺍﻟﻘﻧﺎﺗﻳﻥ ﺩﻭﻝ‬ Hock 2020 Part 1 Section B - Planning, Budgeting, and Forecasting. Questions D. Trends that will affect the entity's markets. 14. Question ID: HOCK CMA P3A H47 (Topic: Strategic Planning) Profitability is derived from three basic factors. Which of the following is not one of those? A. The amount of value placed on the company's products or services by the customer. B. The costs of creating the company's products or services. C. The price that the company charges for its products and services. D. Research and development that is highly innovative. 15. Question ID: HOCK CMA P3A H1 (Topic: Strategic Planning) An organization that has a competitive advantage over its industry rivals will A. be able to distribute its product more quickly than other industry competitors. B. spend more money on advertising than its competitors do. C. be more profitable than the average company in its industry. D. have distribution channels that are wider than others in its industry. 16. Question ID: HOCK CMA P3A H10 (Topic: Strategic Planning) Michael Porter's Five Forces Model helps managers to analyze forces that shape competition within an industry in order to identify opportunities and threats in their industry environments. Which of the following forces is not one of the Five Forces? A. The closeness of substitutes to a company's products. B. The bargaining power of competitors. C. Risk of entry by potential competitors. D. The bargaining power of suppliers. 17. Question ID: HOCK CMA P3A H17 (Topic: Strategic Planning) To avoid failure, a company must maintain a constant focus on all of the following except: A. Identification and adoption of the best industrial practices. B. The nature of the organization's previous strategy and strategic commitments. C. Continuous improvement and learning. D. The foundation and practices of competitive advantage. 18. Question ID: CMA 692 H4 (Topic: Strategic Planning) The plan that describes the long-term position, goals, and objectives of an entity within its environment is the A. Capital budget. B. Strategic plan. C. Cash management budget. D. Operating budget. ‫ﻛﻝ ﺍﻟﻛﺗﺏ ﻭﺍﻻﺳﺋﻠﻪ ﺍﻟﻠﻲ ﺗﺣﺗﺎﺟﻭﻫﺎ ﺣﺗﻼﻗﻭﻫﺎ ﻋﻠﻰ ﺍﻟﻘﻧﺎﺗﻳﻥ ﺩﻭﻝ‬ Hock 2020 Part 1 Section B - Planning, Budgeting, and Forecasting. Questions 19. Question ID: ICMA 1603.P1.012 (Topic: Strategic Planning) A company has developed and implemented a wireless charging feature into one of its flashlights. No other competitor in the marketplace currently offers this feature. In a marketing research study, the vast majority of consumers indicated that they would pay a premium for this feature. Which one of the following is the best strategy to bring this product to the market? A. Porter's cost strategy. B. Porter's focus strategy. C. Porter's differentiation strategy. D. Porter's segmentation strategy. 20. Question ID: CMA 1290 3.16 (Topic: Strategic Planning) All of the following are characteristics of the strategic planning process except the A. Analysis and review of departmental budgets. B. Review of the attributes and behavior of the organization's competition. C. Analysis of external economic factors. D. Emphasis on the long run. 21. Question ID: HOCK CMA P3A H7 (Topic: Strategic Planning) Which one of the following management considerations does the company usually address first in strategic planning? A. Overall objectives of the company. B. Recent annual budgets. C. Outsourcing. D. Structure of the organization. 22. Question ID: HOCK CMA P3A H35 (Topic: Strategic Planning) Some of the benefits that horizontal integration may provide include the all of the following except: A. Increased bargaining power over supplier, providers and buyers. B. Cost reduction. C. Diseconomies of scale. D. Increase in the value of a company's product offering through differentiation 23. Question ID: ICMA 1603.P1.027 (Topic: Strategic Planning) Which one of the following describes what an organization wants to accomplish and leads to the formulation of long-term business objectives? A. Strategy. B. Mission Statement. C. Competency. D. Values. ‫ﻛﻝ ﺍﻟﻛﺗﺏ ﻭﺍﻻﺳﺋﻠﻪ ﺍﻟﻠﻲ ﺗﺣﺗﺎﺟﻭﻫﺎ ﺣﺗﻼﻗﻭﻫﺎ ﻋﻠﻰ ﺍﻟﻘﻧﺎﺗﻳﻥ ﺩﻭﻝ‬ Hock 2020 Part 1 Section B - Planning, Budgeting, and Forecasting. Questions 24. Question ID: HOCK CMA P3A H5 (Topic: Strategic Planning) The method(s) that managers employ to attain one or more of the organization's goals can be defined as: A. Choosing the company's organizational structure. B. Strategy. C. Capital investments. D. Determining the company's business model. 25. Question ID: HOCK CMA P3A H30 (Topic: Strategic Planning) Which of the following is not a characteristic of a tactical plan: A. Top management is responsible for development and overall implementation. B. It relates to production, materials requirements, inventory, cash flows and income statements. C. It is quantitative in focus. D. It covers a period of time one year to five years. 26. Question ID: HOCK CMA P3A H45 (Topic: Strategic Planning) The four factors that derive from a company's distinctive competencies and which create competitive advantage are A. superior efficiency, quality, innovation, and customer responsiveness. B. continuous improvement, continuous learning, prior strategic commitments and absorptive capacity. C. employee productivity, capital productivity, product innovation and process innovation. D. the value (utility) customers place on the company's products, the price it charges for its products, the costs of creating those products, and the profitability of the company. 27. Question ID: HOCK CMA P3A H49 (Topic: Strategic Planning) Four generic competitive strategies can be used to achieve competitive advantage. Which of the following is not one of those strategies? A. Differentiation. B. Innovation. C. Focused cost leadership. D. Cost leadership. 28. Question ID: HOCK CMA P3A H24 (Topic: Strategic Planning) Companies group customers in order to gain a competitive advantage. This is called: A. Positioning. B. Product differentiation. C. Market segmentation. D. Customer differentiation. ‫ﻛﻝ ﺍﻟﻛﺗﺏ ﻭﺍﻻﺳﺋﻠﻪ ﺍﻟﻠﻲ ﺗﺣﺗﺎﺟﻭﻫﺎ ﺣﺗﻼﻗﻭﻫﺎ ﻋﻠﻰ ﺍﻟﻘﻧﺎﺗﻳﻥ ﺩﻭﻝ‬ Hock 2020 Part 1 Section B - Planning, Budgeting, and Forecasting. Questions 29. Question ID: ICMA 1603.P1.043 (Topic: Strategic Planning) Products that are identified in the BCG Growth-Share Matrix as Cash Cows possess relatively A. high market share in a low growth market. B. low market share in a low growth market. C. high market share in a high growth market. D. low market share in a high growth market. 30. Question ID: HOCK CMA P3A H3 (Topic: Strategic Planning) A company's mission statement is, above all, intended to define: A. The specific actions that the company should take. B. The company's profit objectives. C. The weaknesses of the firm. D. Why the company exists, or its "reason to be." 31. Question ID: HOCK CMA P3A H25 (Topic: Strategic Planning) Strategic managers use different business-level strategies to put the company's business model into action. Business-level strategies include all of the following except A. How and where to invest the company's capital in ways that will result in competitive advantage. B. How much to differentiate and how to price the company's product or service. C. What products should be offered and to which customer groups (market segments). D. How to improve the product attributes, the service attributes and personnel attributes associated with the company's product. 32. Question ID: ICMA 1603.P1.016 (Topic: Strategic Planning) A company is the leading company in the premium bottled water industry. Its growth is mainly driven by the negative health publicity on carbonated soft drinks and other sweetened beverages. Extensive inventory and distribution infrastructure is needed to compete in this industry. Its main packaging materials can be sourced either locally or easily imported from overseas. With its 60% market share, the company is able to influence prices and competitive activity. The second biggest competitor holds 20% market share, while the remaining 20% is shared by many small companies. Supermarkets and other grocery retailers are the largest customer segment, accounting for approximately 45% of sales. The supermarkets and grocery retailers are driving volume growth and are undergoing consolidation into larger supermarket conglomerates. Using Porter’s 5 Forces, which one of the following statements best reflects the industry environment? A. Low profitability due to low threat of substitutes and new entrants. B. High profitability due to high power of buyers and sellers. C. Low profitability but can increase due to increasing power of buyers. D. High profitability but can decrease due to increasing power of buyers. ‫ﻛﻝ ﺍﻟﻛﺗﺏ ﻭﺍﻻﺳﺋﻠﻪ ﺍﻟﻠﻲ ﺗﺣﺎﺟﻭﻫﺎ ﺣﺗﻼﻗﻭﻫﺎ ﻋﻠﻰ ﺍﻟﻘﻧﺎﺗﻳﻥ ﺩﻭﻝ‬ Hock 2020 Part 1 Section B - Planning, Budgeting, and Forecasting. Questions 33. Question ID: ICMA 10.P1.001 (Topic: Strategic Planning) Cerawell Products Company is a ceramics manufacturer that is facing several challenges in its operations. Which one of the following is subject to the least control by the management of Cerawell in the current fiscal year? A. Vendors have asked that the contract price for the goods they supply to Cerawell be renegotiated and adjusted for inflation. B. Experienced employees have decided to terminate their employment with Cerawell and go to work for the competition. C. A competitor has achieved an unexpected technological breakthrough that has given them a significant quality advantage, and has caused Cerawell to lose market share. D. A new machine that was purchased this year has not helped reduce Cerawell's unfavorable labor efficiency variances. 34. Question ID: HOCK CMA P3A H37 (Topic: Strategic Planning) One of the steps in the the strategic planning process is analyzing external factors in order to identify the organization's opportunities and threats. Which of the following is not a part of external analysis? A. Examination of the industry in which the company operates. B. Analysis of the national environment in which the company operates. C. Identification of the company's strengths and weaknesses. D. Analysis of the macroenvironment. Budgeting Concepts 35. Question ID: ICMA 19.P1.030 (Topic: Budgeting Concepts) The major objectives of budgeting are to A. define responsibility centers, facilitate the identification of blame for missed budget predictions, and ensure goal congruence between superiors and subordinates. B. define responsibility centers, provide a framework for performance evaluation, and promote communication and coordination among the organization’s segments. C. foster the planning of operations, provide a framework for performance evaluation, and promote communication and coordination among the organization’s segments. D. foster the planning of operations, facilitate the identification of blame for missed budget predictions, and ensure goal congruence between superiors and subordinates. 36. Question ID: ICMA 19.P1.022 (Topic: Budgeting Concepts) A company pays its production manager an annual bonus based on how well the manager performs against the production department’s annual budgets. The production manager has been overestimating budgeted costs the past few years in order to obtain a higher bonus payment. The production manager’s actions are best described as A. motivating employee effort. B. building budgetary slack. C. setting budgeted performance. D. balancing production costs. ‫ﻛﻝ ﺍﻟﻛﺗﺏ ﻭﺍﻻﺳﺋﻠﻪ ﺍﻟﻠﻲ ﺗﺣﺗﺎﺟﻭﻫﺎ ﺣﺗﻼﻗﻭﻫﺎ ﻋﻠﻰ ﺍﻟﻘﻧﺎﺗﻳﻥ ﺩﻭﻝ‬ Hock 2020 Part 1 Section B - Planning, Budgeting, and Forecasting. Questions 37. Question ID: ICMA 19.P1.021 (Topic: Budgeting Concepts) When properly developed and administered, budgets provide the following advantages to the organization except to A. provide a structure for measuring performance. B. promote the efficient allocation of resources. C. motivate managers and other employees. D. ensure that the organization makes a profit. 38. Question ID: ICMA 19.P1.020 (Topic: Budgeting Concepts) The management of a company has just completed a thorough review of its strategic goals and formulated the company’s long-term plan and short-term objectives. The most appropriate next step for the company is the development of a A. operating budget. B. capital budget. C. master budget. D. financial budget. 39. Question ID: ICMA 08.P2.08 (Topic: Budgeting Concepts) Which one of the following is not an advantage of a participatory budgeting process? A. Coordination between departments. B. Control of uncertainties. C. Communication between departments. D. Goal congruence. 40. Question ID: ICMA 08.P2.05 (Topic: Budgeting Concepts) The following sequence of steps are employed by a company to develop its annual profit plan. Planning guidelines are disseminated downward by top management after receiving input from all levels of management. A sales budget is prepared by individual sales units reflecting the sales targets of the various segments. This provides the basis for departmental production budgets and other related components by the various operating units. Communication is primarily lateral with some upward communication possible. A profit plan is submitted to top management for coordination and review. Top management's recommendations and revisions are acted upon by middle management. A revised profit plan is resubmitted for further review to top management. Top management grants final approval and distributes the formal plan downward to the various operating units. This outline of steps best describes which one of the following approaches to budget development? A. Total justification of all activities by operating units. B. Imposed budgeting by top management. ‫ﻛﻝ ﺍﻟﻛﺗﺏ ﻭﺍﻻﺳﺋﻠﻪ ﺍﻟﻠﻲ ﺗﺣﺗﺎﺟﻭﻫﺎ ﺣﺗﻼﻗﻭﻫﺎ ﻋﻠﻰ ﺍﻟﻘﻧﺎﺗﻳﻥ ﺩﻭﻝ‬ Hock 2020 Part 1 Section B - Planning, Budgeting, and Forecasting. Questions C. Bottom-up approach. D. Top-down approach. 41. Question ID: CMA 1293 H1 (Topic: Budgeting Concepts) The use of standard costs in the...
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