IMANET CMA Exam - Topic 3 Question 66 Discussion

Actual exam question for IMANET's CMA exam

Question #: 66
Topic #: 3

[All CMA Questions]

Which of the following is the best example of a variable cost?

AThe corporate president's salary.

BCost of raw material.

CInterest charges.

DProperty taxes.

Show Suggested Answer

Suggested Answer: B

The net initial investment for a capital project consists of three components: the purchase of new equipment, the increase in working capital, and the after-tax proceeds from the disposal of old equipment For this company, the first of these is $54,000 ($50,000 + $4,000), and the second is $1,000. The calculation of the after-tax proceeds from the disposal of the old equipment is as follows:

by Gertude at Feb 26, 2023, 09:04 AM

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Xuan

8 months ago

Yeah, raw materials change with output, makes sense!

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Gaston

8 months ago

Wait, property taxes are fixed, right? How are they variable?

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Joesph

8 months ago

Not sure about that, interest charges can vary too.

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Coleen

8 months ago

I agree, raw materials fluctuate with production levels.

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Antonio

8 months ago

Cost of raw material is definitely a variable cost.

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Novella

9 months ago

Yeah, raw materials definitely seem to fit the definition of variable costs based on what we studied.

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Yolande

9 months ago

I'm not entirely sure, but I feel like property taxes are usually fixed too.

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Gussie

9 months ago

I remember practicing a similar question, and I think interest charges are fixed costs, right?

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Karan

9 months ago

I think variable costs are those that change with production levels, so I’m leaning towards raw materials.

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Carin

9 months ago

Okay, I've got this. The key is that the VM environment provides strong isolation, so the user's access to data files would need to be audited at the host level, not the guest OS level. The answer is A, Host VM monitor audit logs.

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Dottie

9 months ago

I'm not too sure about this one. The IEEE standard is mentioned, but the question is asking about the ISTQB Syllabus. I'll need to review my notes on defect reporting to make sure I understand the key requirements.

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Leota

9 months ago

Hmm, I'm a bit confused on this one. I know Ethereum is a blockchain platform, but I'm not sure about the specifics of its virtual machine. I'll have to think this through carefully.

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Erick

9 months ago

I remember learning about DRM in class, but I'm drawing a blank on the details right now. I'll have to carefully read through the choices and try to eliminate the incorrect ones.

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Jordan

1 year ago

Let's see, variable costs are those that vary with the level of output. I'd say B) Cost of raw material is the most fitting example here. Not a hard question, really.

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Celeste

1 year ago

I think we can all agree that raw material cost is the best example of a variable cost.

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Alfreda

1 year ago

Yeah, that makes sense. It's a clear example of a variable cost.

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Amber

1 year ago

I agree, the cost of raw material definitely varies with the level of output.

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Eve

1 year ago

Hmm, the president's salary as a variable cost? That's like saying the CEO has to take a pay cut every time production goes down. I'll go with B.

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Ty

1 year ago

Hmm, the president's salary as a variable cost? That's like saying the CEO has to take a pay cut every time production goes down. I'll go with B.

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Corinne

1 year ago

D) Property taxes.

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Tracie

1 year ago

C) Interest charges.

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Rasheeda

1 year ago

B) Cost of raw material.

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Blythe

1 year ago

A) The corporate president's salary.

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Carin

1 year ago

German: So, we all agree that B) Cost of raw material is the best example of a variable cost.

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Apolonia

1 year ago

User 3: Definitely, raw material costs fluctuate depending on production needs.

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German

1 year ago

User 2: I think raw material costs are a better example of a variable cost.

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Kimberlie

1 year ago

User 1: I agree, the president's salary doesn't change based on production levels.

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Denise

1 year ago

B) Cost of raw material is the correct answer. Variable costs change depending on the output, while fixed costs like interest charges and property taxes remain the same.

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Ronald

1 year ago

But what about A) The corporate president's salary? It can also change based on performance.

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Nana

1 year ago

I agree with Floyd, raw material cost can vary based on production levels.

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Raymon

1 year ago

The cost of raw material is definitely the best example of a variable cost. It fluctuates with the level of production, unlike the president's salary or property taxes.

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