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Q1: What is meant by an incremental budget

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Answer: A budget that is based on the previous year, adjusted for known changes

Q2: Which of the following statements can be considered to be an advantage of a bottom-up budget

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Answer: Uses the knowledge of all staff to build a fair budget

Q3: A firm has produced the following budget for an activity level of 200,000 units: What would be the total cost for a level of activity of 225,000 units

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Answer: ?138,875

Q4: What would be the most likely cause of an unfavourable labour rate variance together with a favourable labour efficiency variance

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Answer: The employment of more highly skilled staff than budgeted

Q5: A retailer is setting the price of a laptop computer. He is considering using either a 4% sales margin or a 7.5% cost mark-up method. What would the selling price be, if his cost of sales is £600

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Answer: £625 margin or £645 mark-up. Mark-up (cost-plus) £600 x 1.075 = £645.

Q6: A manufacturer is in negotiation with the retailer over a printer with a selling price of £200. What would her cost of sales have to be to achieve either a 15% sales margin or 25% cost mark-up

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Answer: £170 margin or £160 mark-up

Q7: A mobile phone will be priced at £150. What will its target cost of sales need to be if the retailer takes a 30% sales margin and the manufacturer, a 40% sales margin

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Answer: £63 (£150 x 70% x 60% = £63.)

Q8: A factory making furnishings has spare capacity and is considering taking on a special order to make 200 cushions. It usually charges £2.30 to recover its overheads. If its variable costs are £8.20 and it will incur packaging costs of £400, what is the minimum price it should charge

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Answer: £10.20

Q9: Which methods of costing are most appropriate for setting long-term prices

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Answer: Absorption and activity-based costing

Q10: Which pricing strategy is likely to set a high price

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Answer: A price-skimming strategy to exploit price inelasticity

Q11: A company has carried out market research into how many cars it can sell at different prices. If the variable costs per car are £8,000 and total fixed costs are £50,000, from the information below, what is the optimum price

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Answer: Option 3

Q12: Which is least likely to be a problem of target costing

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Answer: Identifying a competitors’ selling price to determine a target selling price

Q13: Which of the following companies can most benefit from life-cycle costing

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Answer: Those with high research and development costs

Q14: A company has two divisions: one making microchips and the other, calculators. The microchip division sells chips to the calculator division, which can buy a similar chip from an outside supplier for £36 per 1,000. The costs of a 1,000 chips made by the microchip division includes a variable cost of is £25 and an allocation of overhead costs of £6. If there is spare capacity in the microchip division, what should the transfer price be

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Answer: £25-£36

Q15: Which of these are not relevant costs

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Answer: Sunk and committed

Q16: A building contractor has carried out a survey with a cost of £5,000 so that he can put in a bid to build a new factory. He has paid £3,000 so far. Which survey costs are relevant to his bid

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Answer: None

Q17: A supermarket is considering running a promotion on one of its washing powder brands. By doing this, it will not be able to run a campaign on its shampoo brands, which would have generated a contribution of £50,000. What type of cost is this £50,000

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Answer: Opportunity

Q18: To complete an order for making curtains, Rosa will need to employ three seamstresses for two days at $30 per day. It will also take five hours of her time, which she costs out at $10 per hour. She will receive $500 and have to buy materials of $220. If she accepts this order, she will have to turn down another order, which would have generated a contribution of $80. How much contribution will she make

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Answer: $20

Q19: A catering business has to make decisions about which sandwiches to make itself and which to buy-in from third party suppliers. The transport costs are a fixed charge if it makes the sandwiches itself. Which sandwiches should it make

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Answer: Ham and cheese

Q20: A clothing company produces wool jumpers. If wool is limited, in what order should these jumpers be produced to maximize the company’s profits

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Answer: Woman, child, man

Q21: A garage faces difficulties with a shortage of skilled labour to repair and service cars. If there are only 120 hours available, how many repairs and services should they carry out to optimise the contribution

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Answer: 10 repairs and 40 services

Q22: A photographic company is estimating the benefits of investing in a new printer to improve its output. Its current variable costs are £2.50 per photo and current fixed costs are £10,000. If the new printer increases fixed costs by 15% but reduces variable costs by 5%, at what level of production should they change to the new machine

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Answer: 12,000 photos

Q23: A catering company is considering investing in 10 microwave ovens costing $800 each to speed up its cooking times. If they plan to cook 3,000 meals in a year to break even, how much labour cost do they need to save per meal

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Answer: $2.67

Q24: Which of the following shops should be closed down

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Answer: York only

Q25: The accounting rate of return is measured as follows

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Answer: Average annual profit expressed as a percentage of the average funds invested in the project.

Q26: The cash inflows and (outflows) associated with a project are as follows: The payback period for this project would be

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Answer: 2 years and 6 months.

Q27: Natt Ltd is considering undertaking a project that would yield annual profits (after depreciation) of £68,000 for 5 years. The initial outlay of the project would be £800,000 and the project’s assets would have a residual value of £50,000 at the end of the project. What would be the accounting rate of return for this project

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Answer: 0%

Q28: What is the present value of £520,000 expected to be received in three years’ time, if the business concerned requires a return of 10% on sums invested? Answers are given to the nearest £’000

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Answer: £390k

Q29: Windsor Ltd is considering a project, which will involve the following cash inflows and (out)flows: What will be the NPV (net present value) of this project if a discount rate of 15% is used

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Answer: +£60.8k

Q30: Which of the following statements concerning the NPV is not true

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Answer: If two competing projects are being considered, the one expected to yield the lowest NPV should be selected.

Q31: Macchu Ltd is about to undertake a project and has computed the NPV of the project using a variety of discount rates: What is the approximate IRR of this project

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Answer: 0.17%

Q32: Bond Ltd is considering two possible projects but can only raise enough funds to proceed with one of them. Investment appraisal techniques have been used and the following results found: Which of the following is the most logical interpretation of the results

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Answer: Project W should be selected because it will yield the highest NPV.

Q33: Which of the following statements concerning the payback period, is not true

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Answer: It takes account of the time value of money.

Q34: Bean Ltd is considering undertaking a project, which will involve an initial outlay of £300,000. The project has the following cash flows associated with it: If a discount rate of 10% is used to calculate the NPV of the project, which of the following statements is correct? (Assume the cash flows arise at the end of each year.)

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Answer: The project will yield a positive NPV of £65.5k and have a payback period of 2 years and 3 months.

Q35: Which best describes the difference between mission and strategy

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Answer: Mission sets the vision of a business while strategy sets out the plan to achieve the mission.

Q36: Which best describes the process of benchmarking

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Answer: Comparison of the performance of one operation or business with another

Q37: In which of the four perspectives of a balanced scorecard would Return on Capital Employed (ROCE) be likely to appear

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Answer: Financial

Q38: In which of the four perspectives of a balanced scorecard is the objective ‘reduce staff turnover’ mostly likely to be

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Answer: Learning and growth

Q39: What is a lagging performance indicator

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Answer: An indicator that highlights past performance

Q40: What is ‘strategy mapping’ in the balanced scorecard

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Answer: Identifying causal links between the four perspectives

Q41: If a business reports on the number of products not made to a sufficiently high quality, what kind of measure is this

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Answer: A quantitative measure

Q42: Which costing system is often used to calculate customer profitability

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Answer: Activity-based costing

Q43: Which costing systems can often be used to calculate product profitability

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Answer: Absorption and activity-based costing

Q44: Which of the following are the principles in the Code of Ethics set out by the International Federations of Accountants

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Answer: Integrity, objectivity, professional competence, confidentiality and professional behaviour.

Q45: The accounting equation states that ‘assets + liabilities = capital’

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Answer: Wrong – False

Q46: Double-entry bookkeeping requires two entries be made to record every business transaction, one a debit entry and one a credit entry

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Answer: Correct – True

Q47: If Mira buys a computer using a bank payment to do so, then the computer equipment account would be debited and the bank account would be credited

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Answer: Correct – True

Q48: To increase a liability account, the account has to be credited

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Answer: Correct – True

Q49: To increase an expense account, the account has to be credited

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Answer: Wrong – False

Q50: A trade receivables account will usually show a credit balance

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Answer: Wrong – False

Q51: If the trial balance totals agree, this does not necessarily mean that all transactions have been recorded

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Answer: Correct – True

Q52: If the statement of financial position shows a bank overdraft of £34,000, then the bank T account will have a credit balance of £34,000 at that date

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Answer: TRUE

Q53: When a business makes a profit as shown by the statement of profit or loss, the profit figure is debited to the capital account to show the owner’s increased investment in the business

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Answer: Wrong – False

Q54: The statement of financial position is a summary of the balances remaining after the statement of profit or loss has been prepared

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Answer: Correct – True

Q55: Mark buys equipment second hand for £20,000 when it would have cost him £28,000 if he had bought new equipment. Mark should record the equipment in the financial statements at the amount of £28,000

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Answer: Wrong – False

Q56: Mark bought a fridge for the amount of £300 for his personal use. Mark should include the fridge at a cost of £300 in the financial statements

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Answer: Wrong – False

Q57: Mark has a year-end of 30 June 2015. He has paid telephone line rental of £60 for the period from 1 June 2015 to 31 August 2015. Mark should record a prepayment of £20 in his financial statements

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Answer: Wrong – False

Q58: Mark has been informed that one of the trade receivables, Notgrate Freight, has ceased trading and is unlikely to pay any of its business debts. Notgreat Freight owes the business £610 and this amount should be written off as a bad debt in line with the prudence concept

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Answer: Correct – True

Q59: Mark employs a member of staff who has experience of sales. Mark should record the member of staff as an asset in the business’s financial statements

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Answer: Wrong – False

Q60: James bought a washing machine for his own personal use costing £8,000 on 31 December 2015. He took out a personal loan for this on 31 December 2015. For this transaction, the washing machine would not be recorded as it is not a business transaction

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Answer: TRUE

Q61: Kets de Vries (1996) identified that most successful leaders perform two roles. What are these roles

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Answer: Charismatic and architectural

Q62: The Action Centred Leadership model was put forward and developed in 1973 by whom

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Answer: Adair

Q63: It has been identified that there are 6 Pillars of Character that are important to adopting and ethical perspective in leadership development. Can you name four of the six

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Answer: Trustworthiness, Respect, Responsibility, Fairness, Caring and Citizenship

Q64: Berg and Chyung use an analogy to distinguish formal and informal learning. In this analogy, formal learning is represented as a journey by bus, whereas informal learning is characterized as what

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Answer: Like riding a bicycle

Q65: Barner and Higgins identify four theory models of coaching to which all coaches will subscribe, consciously or otherwise, in varying degrees. Which of these models aims primarily to help the individual to gain insights into themselves (as a person and as a manager) and to effect changes based on those insights

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Answer: Clinical model

Q66: The authors suggest the idea of wrappers for a series of related and overlapping concepts that writers and organizations use to define and delineate practices in areas related to leadership and management development. Which three concepts make up these wrappers

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Answer: Talent management, succession management, and career management

Q67: The authors take a broad view of leadership and management (L&M) development, including all activities aimed at building ongoing L&M capacity, enabling the organization to meet its objectives, to sustain itself and to what else

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Answer: Transform itself

Q68: Holton (1996) criticised Kirkpatrick’s model of levels of evaluation in learning, stating that only three of these levels were causally related to learning and development. Which were the three levels Holton identified

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Answer: Learning, individual performance, organizational results

Q69: Stein et al (2008) found that top executives differed significantly from the remainder of the general population in terms of a certain personal characteristic. This difference was also found to be linked to effective leadership and organizational effectiveness. What was the identified personal characteristic

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Answer: Greater emotional intelligence

Q70: What is the Human Capital Perspective argument for diversity management in leadership and management

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Answer: Taking advantage of the talents available in the whole of the workforce

Q71: Research in the styles of leadership preferred by different generations was completed by Arsenault (2004). What was the style of leadership that Generation X was found to prefer

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Answer: Egalitarian

Q72: Which of the four theorists added a Chinese dimension to Hofsted’s cultural dimensions

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Answer: Bond

Q73: Earley and Mosakowski (2004) developed the concept of cultural intelligence in the context of attitudes and skills. Which of the following did they identify which related to learning strategies whereby people acquire and develop coping strategies

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Answer: Mind

Q74: Which of the following aspects do not have an impact on Employment Law

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Answer: Finance

Q75: Whilst there is no consensus as to what global leadership competencies are there is agreement as to what according to Neary and O’Grady

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Answer: The need to develop managers through such an approach

Q76: Which of Mabey and Salaman’s (1995) four management agendas assumed an unproblematic link between management development and performance

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Answer: Functional performance

Q77: Planning to learn from experience is in keeping with which of Mumford’s four approaches to learning

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Answer: Prospective approach

Q78: Which of the following is an advantage of informal learning opportunities

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Answer: Job change within the same function.

Q79: Which of Carnall’s (2003) four core managerial components essential for the effective management of change involves team building

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Answer: Maintaining momentum

Q80: International management development involves the CEO and the senior team and other key elements. Which of the following is not one of the key elements

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Answer: Performance management

Q81: In what order do managers typically perform the managerial functions

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Answer: planning, organising, leading, controlling

Q82: Who of the following is the industrial philanthropist

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Answer: Seebohm Rowntree

Q83: Which one of the following is not one of Drucker’s five guiding principles of management

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Answer: To operate the organisation’s status system.

Q84: What are the three interpersonal roles of managers

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Answer: Figurehead, leader and liaison

Q85: At what level of an organisation does a corporate manager operate

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Answer: Top level

Q86: What is the guiding principle behind New Public Management

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Answer: Introducing private sector business principles into the public sector

Q87: Which one is not a recognised key skill of management

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Answer: Writing skills

Q88: Which of these is not part of the recognised challenges for modern managers

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Answer: Micro-managing the workforce

Q89: Who of these is the entrepreneur

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Answer: James Dyson

Q90: What is a social enterprise concerned with

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Answer: Running a business to create social benefits

Q91: Which 18th century writer produced a famous book called ‘The Wealth of Nations’

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Answer: Adam Smith

Q92: What characteristic is not a key feature of the ‘open systems’ model of management

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Answer: Morale

Q93: Which one of these characteristics is most commonly associated with the ‘rational goal’ model of management

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Answer: Productivity

Q94: What is the guiding principle of scientific management

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Answer: One best way to do a job

Q95: What is Frank Gilbreth’s work most noted for

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Answer: Time and motion studies

Q96: Which one of the following is not a characteristic of a bureaucratic organisation

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Answer: Change

Q97: Which writer was concerned with the reaction of workers to key characteristics of bureaucracies

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Answer: Gouldner

Q98: Which feature does not form one of Fayol’s 14 principles of management

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Answer: Individualism

Q99: The Hawthorn Studies are most associated with which writer

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Answer: Elton Mayo

Q100: As what are key factors that reflect the situation of an organisation referred to

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Answer: Contingencies