IMANET CMA Exam - Topic 5 Question 38 Discussion

Actual exam question for IMANET's CMA exam

Question #: 38
Topic #: 5

A proposed transfer price may be based upon the full-cost price Full-cost price is the

price

AOn the open market.

BRepresenting the cash outflows of the supplying division plus the contribution to the supplying division from an outside sale.

CUsually set by an absorption-costing calculation

DSet by charging for variable costs plus a lump sum or an additional markup, but less than full markup

Show Suggested Answer

Suggested Answer: C

Full-cost price is the price usually set by an absorption-costing calculation and includes materials, labor, and a full allocation of manufacturing O/H. This full-cost price may lead to dysfunctional behavior by the supplying and receiving divisions, e g., purchasing from outside sources at a slightly lower price that is substantially above the variable costs of internal production.

by Arthur at May 03, 2022, 01:38 PM

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Ronna

7 months ago

I don’t think it should include outside sales contributions.

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Nguyet

7 months ago

I think it’s usually based on absorption costing, right?

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Denise

7 months ago

Wait, is it really that straightforward?

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Stephen

7 months ago

Totally agree, it’s all about covering costs!

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Claribel

8 months ago

Full-cost price includes all costs incurred.

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Freeman

8 months ago

I’m leaning towards option D because it mentions variable costs, but I’m not entirely confident if that’s the right approach for full-cost pricing.

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Alona

8 months ago

I feel like option C sounds familiar because we talked about absorption costing in class, but I can't recall the specifics.

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Anabel

8 months ago

I remember practicing a similar question where we discussed how full-cost pricing can be influenced by market conditions. I think it might be option B.

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Lindsey

8 months ago

I think the full-cost price is related to the total costs incurred, but I'm not sure if it includes just cash outflows or something else too.

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Frederic

8 months ago

Hmm, I'm not totally sure about this one. I know the Daily Scrum and Sprint planning are timeboxed, but I can't remember if the Sprint itself is timeboxed.

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Jose

8 months ago

I'm pretty confident about this one. The timeout value is determined by the tickTime, which is 2000 ms, so the answer is C.

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Ernest

8 months ago

I've got a good feeling about this one. The question is specifically asking for a graphical view to monitor connections, so I'm going to go with WAAS Analytics. That feature sounds like it would provide the kind of visibility the administrator is looking for.

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Blythe

8 months ago

Key words like 'qualitative measures' and 'behavioral' suggest we want something about interaction quality, not just volume of visits or referrals. B seems strongest.

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