CIPS Exam L3M2 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

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Rodolfo

1 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'?

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Marjory

1 months ago

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

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Detra

6 days ago

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

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Laurel

7 days ago

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

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Sylvia

2 months 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!

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Catarina

1 days ago

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

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Lillian

7 days ago

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

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Vi

11 days ago

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

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Shannan

1 months ago

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

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Anglea

2 months ago

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

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Iola

1 months ago

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

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Fabiola

1 months ago

A) Costs

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Blondell

2 months ago

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

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Lilli

2 months ago

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

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Ahmed

2 months ago

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

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Launa

2 months ago

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

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Pamella

1 months ago

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

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Lonna

1 months ago

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

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Clare

1 months ago

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

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Benedict

2 months ago

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

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Slyvia

2 months ago

A) Costs

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