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CIMA P2 Exam
Advanced Management Accounting (Page 6 )

Updated On: 1-Feb-2026
Page 6 of 42
PDF with 202 Questions

Which of the following statements is correct in respect of the key feature of dual pricing?

  1. The selling price recorded by the selling division is higher than the cost recorded by the receiving division.
  2. Internal customers are offered trade discounts depending on the number of units they purchase.
  3. Internal transfers are priced at marginal cost and a lump sum payment is made subsequently to contribute to fixed costs.
  4. Internal customers are charged a lower price than external customers to reflect savings in distribution costs.

Answer(s): A



Beyond Budgeting is essentially an approach that places modern management practices within a cultural framework. Analyze the following statements:

1. The organization structure should have clear principles and boundaries.

2. Managers should be given a high degree of freedom to make decisions.

3. Frontline managers should be made responsible for relationships with customers.

4. Information system should be transparent and ethical.

Which of the above statements relate to Beyond Budgeting?

  1. 1, 2 and 4 only
  2. 2, 3 and 4 only
  3. 1, 2 and 3 only
  4. All the statements

Answer(s): D



A learning curve applies to the manufacture of the first 256 units of a product.

During the manufacture of the first 255 units, the time taken to produce each successive unit is expected to:

  1. Reduce at a decreasing rate.
  2. Reduce at a constant rate.
  3. Reduce at an increasing rate.
  4. Reach the steady state.

Answer(s): A



Division A is an investment centre with assets of $7.3 million. The following is an extract from the annual budget for division A:



The cost of capital is 14%.

Calculate the residual income for division A.

  1. $808,000
  2. $1,727,800
  3. $358,000
  4. $2,008,000

Answer(s): A



The following data relate to an investment opportunity.
The percentage reduction in the annual revenue that could occur before the project is no longer financially viable is:

  1. 15.9%
  2. 56.0%
  3. 28.6%
  4. 212.3%

Answer(s): A



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