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CIMAPRO19-P01-1 Exam - Topic 2 Question 105 Discussion

'A zero-based budgeting system involves establishing decision packages that are then ranked in order of their relative importance in meeting the organization's objectives'.Which of the following is true regardinghe difficulties that a not-for-profit organization may experience when trying to rank decision packages.Select ALL true statements.
A) The activities that are being proposed in a budget are described in variable packages. There will often be more less than one decision package proposed for an activity.
B) The activities that are being proposed in a budget are described in decision packages. There will often be more than one decision package proposed for an activity.
C) Some of these packages will be inclusive and will require operations to select the best solution to the issue involved.
D) Some of these packages will be mutually inclusive and will require management to select the best solution to the issue involved.
E) Each decision package is evaluated. Its costs are compared to its benefits and net present values or other measures calculated.
F) Management may decide to reject packages even though the activity was done last year. In this way the organization is said to be starting from a zero base with each package given due consideration.
G) Management may decide to accept packages even though the activity was done last year. In this way the organization is said to be starting from a 100% cost base with each package given due consideration.
H) In a public sector body, for example, decision packages will relate profit making activities.
I) In a public sector body, for example, decision packages will relate to very disparate activities.

CIMAPRO19-P01-1 Exam - Topic 2 Question 105 Discussion

Actual exam question for CIMA's CIMAPRO19-P01-1 exam
Question #: 105
Topic #: 2
[All CIMAPRO19-P01-1 Questions]

'A zero-based budgeting system involves establishing decision packages that are then ranked in order of their relative importance in meeting the organization's objectives'.

Which of the following is true regardinghe difficulties that a not-for-profit organization may experience when trying to rank decision packages.

Select ALL true statements.

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Suggested Answer: A

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by Kassandra at Jan 15, 2025, 06:18 AM

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Dominque
8 months ago
I think some packages can overlap, but not sure about "mutually inclusive."
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Catalina
8 months ago
Decision packages can definitely vary in importance.
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Keneth
8 months ago
Wait, so they might reject last year's activities? That seems risky!
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Skye
8 months ago
Totally agree! It's all about prioritizing what's essential.
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Vinnie
9 months ago
A zero-based budgeting means every package gets a fresh look!
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Abel
9 months ago
I’m a bit confused about the difference between mutually inclusive and exclusive packages. I hope I remember that correctly during the exam!
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Anglea
9 months ago
I practiced a similar question where we discussed how management might reject packages, so I feel confident about option F being true.
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Christiane
9 months ago
I think option B sounds right, but I'm not entirely sure if there can be multiple packages for one activity.
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Glenn
9 months ago
I remember that decision packages can sometimes overlap, which makes it tricky to rank them effectively.
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Laura
9 months ago
This seems like a straightforward application of the zero-based budgeting principles we've been studying. I'm confident I can identify the true statements here.
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Nakisha
9 months ago
I'm a bit confused by the concept of "zero-based budgeting" and how that relates to the difficulties a not-for-profit might face. I'll need to review my notes on that before answering.
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Dorathy
9 months ago
Okay, I think I've got a good handle on this. The key is understanding the differences between decision packages and variable packages, and how that impacts the ranking process for a not-for-profit organization.
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Shoshana
9 months ago
Hmm, the wording on some of these options is a bit tricky. I'll need to think through the implications of each one to determine which are true.
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Tuyet
10 months ago
This question seems straightforward, but I'll need to carefully read through the options to make sure I understand the key differences between them.
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Heike
1 year ago
I just hope the graders have a good sense of humor when they come across my answers. Maybe I'll add a few snide comments about how these questions are designed to make accountants feel like they're solving the Da Vinci Code or something. Gotta keep it light, you know?
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Mozelle
1 year ago
E) Each decision package is evaluated. Its costs are compared to its benefits and net present values or other measures calculated.
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Alaine
1 year ago
B) The activities that are being proposed in a budget are described in decision packages. There will often be more than one decision package proposed for an activity.
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Doretha
1 year ago
A) The activities that are being proposed in a budget are described in variable packages. There will often be more less than one decision package proposed for an activity.
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Vallie
1 year ago
E) Each decision package is evaluated. Its costs are compared to its benefits and net present values or other measures calculated.
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Tomas
1 year ago
B) The activities that are being proposed in a budget are described in decision packages. There will often be more than one decision package proposed for an activity.
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Lai
1 year ago
A) The activities that are being proposed in a budget are described in variable packages. There will often be more less than one decision package proposed for an activity.
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Rasheeda
1 year ago
You know, I'm starting to think the folks who write these exam questions are just trying to keep us on our toes. 'Mutually inclusive' and 'zero base'? Sounds like they're trying to trip us up with fancy terminology. But I'll give it my best shot!
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Gwenn
1 year ago
E) Each decision package is evaluated. Its costs are compared to its benefits and net present values or other measures calculated.
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Alesia
1 year ago
C) Some of these packages will be inclusive and will require operations to select the best solution to the issue involved.
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Serita
1 year ago
A) The activities that are being proposed in a budget are described in decision packages. There will often be more than one decision package proposed for an activity.
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Janey
1 year ago
Hah, I bet the folks in the public sector are scratching their heads over the 'profit making activities' in H. That's about as likely as a zero-based budget system actually being simple to implement.
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Louvenia
1 year ago
Hah, profit making activities in the public sector? That's a good one!
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Van
1 year ago
E) Each decision package is evaluated. Its costs are compared to its benefits and net present values or other measures calculated.
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Eric
1 year ago
B) The activities that are being proposed in a budget are described in decision packages. There will often be more than one decision package proposed for an activity.
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Edison
1 year ago
A) The activities that are being proposed in a budget are described in variable packages. There will often be more less than one decision package proposed for an activity.
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Florinda
1 year ago
I agree with Celeste on the correct options. The bit about 'starting from a zero base' in F is interesting, but I'm not sure how that applies to a not-for-profit organization. Shouldn't they be focusing on meeting their objectives rather than worrying about profit?
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Celeste
1 year ago
Okay, let's see here. B, C, D, and E seem to be the correct options. I'm a bit confused about the 'mutually inclusive' part in D, though. Does that mean the packages are somehow interconnected?
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Serita
1 year ago
I agree with you. B, C, D, and E are the correct options. And yes, mutually inclusive means the packages are interconnected.
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Augustine
1 year ago
Yes, you're correct. B, C, and E are definitely true. And yes, mutually inclusive means the packages are interconnected.
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Louisa
1 year ago
I also think option E is true. Each decision package needs to be evaluated based on costs and benefits.
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Keneth
1 year ago
I agree with Ollie. Option A makes sense as decision packages can vary in the activities proposed.
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Ollie
1 year ago
I think option A is true because decision packages are described in variable packages.
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