CIPS L3M2 Exam - Topic 1 Question 13 Discussion

Actual exam question for CIPS's L3M2 exam

Question #: 13
Topic #: 1

[All L3M2 Questions]

'From an accounting perspective, added value is total XXXXXX minus total costs of all activities'.

Which word is missing?

ACosts

BExpenditure

CSavings

DRevenue

Show Suggested Answer

Suggested Answer: C

The Economic Order Quantity is a formula which attempts to calculate the most efficient quantity to order at any given time, by attempting to reconcile the cost of stockholding and the cost of plac-ing an order. This could then have implications for the timing of an order being placed.

The cost of holding stock can be reasonably accurately calculated and agreed with one's peers. However, determining the cost of placing an order can keep colleagues up late into the night, and can be a great topic to liven up a sleepy procurement / finance function.

by Estrella at Jun 23, 2024, 03:25 PM

Limited Time Offer

25%

Off

Get Premium L3M2 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Suzan

6 months ago

"Savings" doesn't fit at all, right?

upvoted 0 times

...

Marguerita

6 months ago

I thought it was "Expenditure" at first.

upvoted 0 times

...

Shoshana

6 months ago

Wait, could it be "Costs"? That sounds off.

upvoted 0 times

...

Lachelle

7 months ago

Agreed, "Revenue" makes the most sense here.

upvoted 0 times

...

Anissa

7 months ago

It's definitely "Revenue."

upvoted 0 times

...

Jesusa

7 months ago

I thought "Expenditure" could work too, but it seems less common in this context.

upvoted 0 times

...

Jules

7 months ago

I practiced a similar question, and I feel like "Revenue" fits best, but I could be wrong.

upvoted 0 times

...

Georgiana

7 months ago

I'm not entirely sure, but I remember something about costs being subtracted from total income. Could it be "Costs"?

upvoted 0 times

...

Valentine

8 months ago

I think the missing word might be "Revenue," since added value usually relates to what you earn.

upvoted 0 times

...

Curtis

8 months ago

I've got this! The missing word is definitely "revenue". Added value is calculated by subtracting total costs from total revenue. Easy peasy!

upvoted 0 times

...

Lea

8 months ago

Ah, this is a tricky one. I'm a bit confused between "revenue" and "expenditure" as the possible answers. I'll need to review the concepts of added value and how it's calculated.

upvoted 0 times

...

Pamella

8 months ago

Okay, let me see. From the definition, added value is total something minus total costs. I'm leaning towards "revenue" as the missing word, but I want to double-check my understanding.

upvoted 0 times

...

Ming

8 months ago

Hmm, I'm not 100% sure about this one. I think the missing word could be "revenue" or "expenditure". I'll have to think it through carefully.

upvoted 0 times

...

Charlena

8 months ago

This one seems pretty straightforward. The missing word is clearly "revenue" since added value is calculated by subtracting total costs from total revenue.

upvoted 0 times

...

Janessa

8 months ago

Okay, I think I've got it. Based on the details provided, this has to be Twofish. I'm confident that's the right answer.

upvoted 0 times

...

Lisbeth

8 months ago

Hmm, I'm not sure about this one. I know we need to modify some configuration files, but I can't remember which ones exactly. I'll have to think this through carefully.

upvoted 0 times

...

Elbert

8 months ago

Okay, let me break this down. The key things to consider in audit planning are gathering background information, determining resources, and developing relevant audit criteria. I think option D covers those main areas.

upvoted 0 times

...

Gabriele

8 months ago

I'm a bit unsure on this one. I know the IETF is involved in internet standards, but I can't recall if they specifically became the standards body for IP. I'll have to think it through.

upvoted 0 times

...

Rodolfo

1 year ago

Costs, revenue, who cares? As long as the final answer is a number, I'll be happy. Where's the multiple-choice option for 'whatever works'?

upvoted 0 times

Xuan

11 months ago

Costs, revenue, who cares? As long as the final answer is a number, I'll be happy. Where's the multiple-choice option for 'whatever works'?

upvoted 0 times

...

Rosalyn

11 months ago

D) Revenue

upvoted 0 times

...

Amber

11 months ago

C) Savings

upvoted 0 times

...

Zena

11 months ago

B) Expenditure

upvoted 0 times

...

Ressie

11 months ago

A) Costs

upvoted 0 times

...

Marjory

1 year ago

I'm going with A) Costs. Subtracting total costs from total revenue is how you get added value, isn't it?

upvoted 0 times

Benedict

11 months ago

A) Costs is the missing word, good choice!

upvoted 0 times

...

Detra

12 months ago

That's right, subtracting costs from revenue gives you added value.

upvoted 0 times

...

Laurel

12 months ago

Yes, you're correct. It's A) Costs.

upvoted 0 times

...

Sylvia

1 year ago

Gotta be D) Revenue. I mean, who cares about costs or savings when you're trying to calculate added value? Show me the money!

upvoted 0 times

Catarina

11 months ago

I agree with you, it's D) Revenue. That's the key factor in determining added value.

upvoted 0 times

...

Lillian

12 months ago

I see your point, but I still think it's A) Costs. You have to consider all expenses.

upvoted 0 times

...

Vi

12 months ago

No way, it's definitely D) Revenue. That's the total income you're generating.

upvoted 0 times

...

Shannan

1 year ago

I think it's A) Costs. You need to subtract costs to calculate added value.

upvoted 0 times

...

Anglea

1 year ago

D) Revenue makes the most sense to me. Can't have added value without revenue, right?

upvoted 0 times

Iola

1 year ago

D) Revenue makes the most sense to me. Can't have added value without revenue, right?

upvoted 0 times

...

Fabiola

1 year ago

A) Costs

upvoted 0 times

...

Blondell

1 year ago

Hmm, I was leaning towards B) Expenditure, but now I'm not so sure. This is a tricky one.

upvoted 0 times

...

Lilli

1 year ago

I agree with Ahmed, A) Costs makes the most sense in this context.

upvoted 0 times

...

Ahmed

1 year ago

I think it's A) Costs because added value is calculated by subtracting costs from total revenue.

upvoted 0 times

...

Launa

1 year ago

I think it's D) Revenue. That's the classic definition of added value in accounting.

upvoted 0 times

Pamella

1 year ago

Yes, you're right. Added value is total revenue minus total costs of all activities.

upvoted 0 times

...

Lonna

1 year ago

Is it A) Costs? That would make sense in the context of the equation.

upvoted 0 times

...

Clare

1 year ago

No, it's not revenue. Think about the equation again.

upvoted 0 times

...

Benedict

1 year ago

I think it's D) Revenue. That's the classic definition of added value in accounting.

upvoted 0 times

...

Slyvia

1 year ago

A) Costs

upvoted 0 times

...