26. Why is a value chain analysis conducted? i. to identify how value is created at each component of the value chain. ii. to set the price for products and services. iii. to identify the risks associated with each component of the chain. iv. to be able to globalise the value chain to maximize profitability. 27. Which of the following would be plotted as a Cash Cow on a BCG matrix? i. A company experiencing 50% growth and having 50% market share. ii. A company experiencing 50% growth and having 5% market share. iii. A company experiencing 10% growth and 5% market share. iv. A company experiencing 10% growth and 50% market share. 28. CASTCA is a major retailing company like WOLMORT and usually buys materials directly from wholesalers to use it in their sales process. At a recent company meeting, the top management decided that it would stop buying clothing products from wholesalers and directly buy clothing products from the manufacturers. Which of the following correctly depicts the above-mentioned scenario? i. Economies of scale. ii. Supplier power. iii. Backward integration. iv. Multi-Channel distribution. 29. Which of the following assessment tool (matrix/grid) involves evaluation of content strength and distribution channel strength of industry participants? i. Competitive positioning matrix. ii. BCE product. iii. Ansoff product/market matrix. iv. Value/Effort assessment matrix. 30. Alpha Ltd is an automobile company in a high demand market requiring high investment and looking to acquire market share. Cash flow for Alpha ltd. is comparatively low at this stage. Beta Ltd. a competitor is planning to enter same market but hasn't gained hold on the market yet. Which stage of industry life cycle is Alpha Ltd. falls in? i. Growth stage giving more power to customers. ii. Growth stage giving less power to customers. iii. Maturity stage with high profitability. iv. Introduction stage with low investment 31. Operational performance measures for an education institution would include: I Overall pass rate of students II % of enrolment growth year on year III average cost of course delivery per student IV variety of courses delivered i. I, II and III. ii. II, III and IV. iii. I, III and IV. iv. I, II, III, IV. 32. A firm using the balanced scorecard has included among its strategies 'to improve bottom-line profit we need to improve working conditions'. Which of the following statements best describes the evaluation of the firm's success in implementing the strategy? i. It is impossible to determine whether the strategy has been successful. ii. The only way to measure success is to survey employees. iii. A number of performance evaluation measures will need to be put in place, but even with favorable results on those measures, the firm cannot conclude that the profit resulted from the improvement in working conditions. iv. If managers can observe employees' motivation they will have a good idea of the success or otherwise of the strategy. 33. Business improvements from data analytics are not likely to happen unless which elements are present: I. Senior Executives paid large bonuses on the volume of data used in decision making II. Collection of large volumes of data and appropriate storage III. A culture of evidence-based decision making IV. A desire for business improvement i. II and III. ii. I,II,III and V. iii. II, IV and V. iv. III and IV. 34. Employee satisfaction, absenteeism and employee suggestions implemented are measures related to the: i. financial perspective. ii. customer perspective. iii. internal business processes. iv. learning and growth. 35. The management accountant at Melal Furniture Makers decides to include the following measures on their balanced scorecard (BSC): customer satisfaction, rework costs, on-time delivery, average shopfloor personnel qualification and sales growth in local markets. These measures belong to which BSC perspectives? i. Financial perspective Sales growth in the local markets Internal business process perspective Ontime delivery, customer satisfaction Customer perspective Learning and growth perspective Rework costs, average shopfloor personnel qualification. ii. Financial perspective Sales growth in the local markets Internal business process perspective Rework costs Customer perspective On-time delivery, customer satisfaction Learning and growth perspective Average shopfloor personnel qualification. iii. Financial perspective Rework costs Internal business process perspective On-time delivery Customer perspective Sales growth in the local markets, customer satisfaction Learning and growth perspective Average shopfloor personnel qualification. iv. Financial perspective Sales growth in the local markets; Rework costs Internal business process perspective On time delivery; Average shopfloor personnel qualification. 36. Key outcomes of completing a risk assessment can include: I Acting to reduce the potential negative consequences of the risk II Accepting the risk III Eliminating the risk IV Transferring the risk i. I, II and IV. ii. II, III and IV. iii. I,II,III and IV. iv. I, III and IV. 37. In a risk management framework, risks are typically prioritised according to: i. Probability and impact. ii. Timeframe and severity. iii. Prevention and detection. iv. Cause and effect. 38. Crunchy Audio makes two types of TV wall holders, Standard (S) and Deluxe (D). S sells for $16 each and D sells for $24 each. The variable costs for S is $10 and D is $14. Normally STV Audio sells 5 type S TV wall holders for every 2 type D TV wall holder and this sales mix is expected to continue into the future. Fixed costs are $650 000 per annum. Which of the following is the correct break-even analysis in terms of revenue (Closest to)? Select one: i. $1 560 000. ii. $1 625 000. iii. $1 664 000. iv. $1 774 000. 39. Continental Can Company Ltd (CCCL) manufactures recyclable soft drink cans. A unit of production is a case of 12 dozen cans. The following standards have been set by the production engineering staff and the management accountant: Direct material $3.12 Quantity 4 kg Price $0.78 per kg Direct labour $4.025 Quantity 0.25 hour Rate $16.10 per hour Actual costs incurred in the production of 50,000 units were as follows: Direct material $170,100 for 210,000 kg Direct labour $210,600 for 13,000 hours All materials were purchased during this time period. Calculate the Direct Labour efficiency variance i. 8,500 favorable. ii. 1,300 unfavorable. iii. 8,050 unfavorable. iv. 2,750 favorable. 40. Which of the following is not a correct statement with respect to employee empowerment? i. Employees can contribute well if they are given control over certain aspects of their work. ii. Employees are frequently in a position to understand why errors in the production process occur. iii. Employees better understand customer needs because they have direct contact with them. iv. Work teams are a useful technique to use in attaining competitor advantage. 41. Which of the following do NOT correctly describe beneficial characteristics expected by an organisation using benchmarking? I Benchmarking can identify why differences in performance exist between the organisation and "best practice". II Benchmarking can enable an organisation to see where its management might be improved relative to competitors' management. III Benchmarking can measure the performance gap between the organisation and its competitors. IV Benchmarking can assess difference in performance with an industry competitor in respect of sales and profits. i. I only. ii. I and II. iii. II and III. iv. III and IV. 42. Consider the following statements and then select the response(s) that are correct and/or reflect the CPA Study Materials' view correctly. I Some stakeholders are interested in sustainability reporting but others have little or no interest. Recognising this, boards of directors in Australia often ignore their many direct legal duties to stakeholders over shareholders and instead focus on long term responsibility to the shareholders and the company. II Most companies listed on the ASX now produce a corporate social responsibility (CSR) or sustainability report in which they address issues including sustainability and pollution reduction, and often include performance measures of their effectiveness. III The key issue for effective performance measurement is to understand the organisation's strategy for value creation and to measure the success of its value creation activities. IV Performance measures for financial issues and sustainability issues do not always gain the same exposure and are not always accorded similar importance in annual reports, despite the importance of sustainability. i. I, II, III and IV are correct. ii. I, II and IV are correct. iii. II and III are correct. iv. II, III and IV are correct. 43. Leebing Limited is an Australian retailer of a wide variety of electrical and electronic goods. Leebing senior management requires a scorecard to measure the performance of its four Australian distribution managers. Distribution managers are expected to arrange the efficient transportation of products for sale by its own retail stores and also transport to customers' homes where customers have purchased large items from Leebing stores or have purchased items on Leebing's website. Leebing's main aim is to create value for its shareholders through its three strategies which are to increase market share, to increase sales in stores and on the web and to provide excellent service to customers. The company has 440 'retail shops' located in major shopping centres across Australia. It has an extensive website. It has four distribution centres located carefully across Australia - with one of the four distribution managers being located at each of these centres. The company manufactures a small number of the products that it sells in Australia but most products are imported and delivered by shipping container direct to one of the distribution centres. To ensure quality after-sales service that activity is under the control of one manager nationally. As Strategic Management Accountant at Leebing you have been asked to identify which of the following is/are most likely to be success oriented comments regarding possible approaches proposed for adoption within Leebing? I Distribution managers will be better motivated by their scorecard if the scorecard measures overall communication relating to customer issues including satisfaction with products purchased and service of defective products. II Store managers will be motivated to make better decisions if they participate in a profit share scheme that identifies the profit of all stores and which then shares that profit among all 440 retail store managers on the basis of sales growth achieved in each store. III To translate strategy into action, measures to include on an individual distribution manager's scorecard would include number of deliveries required each day, number of deliveries achieved per day, average delivery time, number of complaints about late deliveries, average cost per delivery. IV Gaming and/or biasing can be avoided if delivery managers and store managers are given freedom to communicate fully and then to adjust scorecard results relevant to poor performance outcomes. i. I and IV. ii. II and III. iii. III and IV. iv. All are success oriented. 44. Which one of the following statements relating to communication within a restaurant is most likely NOT to be correct? i. A customer leaving a restaurant who says they were 'satisfied with their evening' will provide a timely and accessible performance measure that can easily lack validity. ii. Good managers are likely to be unhappy with the feedback (above in A) gathered from customers regarding 'meal satisfaction'; while poor managers are likely to be happy. iii. Where many customers state that they were satisfied with their meal and say why they were satisfied this will provide increased clarity regarding the meal quality. iv. When many customers leave the restaurant at the same time and make various comments on their meals the customers' statements will increase information to management in terms of reliability and timeliness 45. Mix and Match Pty Ltd is an ASX listed business. It is considering closing its Australian manufacturing plant and relocating to a country with cheaper labour costs and less government regulation. Stakeholders have been identified by the Management Accountant. These stakeholders have then been assigned into a stakeholder grid. One of the identified stakeholders is "employees who will become redundant and their trade unions". Within the stakeholder grid, this group would have i. high Power and high Interest. ii. high Power low interest. iii. high Interest and low power. iv. low power and low interest. 46. JAYJAY Services, a Sydney based company, is moving its customer support operations to India. The operations will be locally managed by a subsidiary company. Which of the following best describes this move? Select one: i. Relocation. ii. Offshoring. iii. Outsourcing offshore. iv. Outsourcing. 47. Reciprocal promoting of the brand and uncertainty surrounding the performance of the organisation are benefits and risks of what mode of entry: i. Joint venture. ii. Strategic alliance. iii. Licensing. iv. Franchising. 48. Which one of the following methods of establishing operations would be most appropriate for a company such as Gloria Jeans, the coffee store operator, if it wished to achieve rapid foreign expansion of its business by providing operational assistance to prospective business partners and with only limited capital expenditure? i. Licensing agreements. ii. Joint Venture with Starbucks. iii. Franchising Agreement. iv. Marketing subsidiaries in other countries. 49. Which of the following statements is most likely to be generally correct? i. Kaizen is an approach to Strategy that involves minor changes and as such is an appropriate method that can be communicated to all staff in order to seek the ongoing participation of staff at all levels of the organisation. ii. One aspect of Activity Based Management is referred to as Business Process Management (BPM). BPM is concerned with making incremental improvements to the way business processes are undertaken. iii. Target costing is a strategic management accounting technique that will help improve product design and/or features, creating the opportunity to increase selling prices so that any 'gap' is minimised. iv. If pre-production committed costs are very low when compared with overall costs after production commences then the importance of overall Life-Cycle costs as part of Strategic Management becomes relatively more important. 50. Which of the following statements is NOT correct? i. Business Process Management begins with appreciation of an organisation's strategic position and identifies how business processes can be designed under ideal conditions using the most advanced technology. ii. Examples of reverse value chain movements include the return of defective raw materials and components to suppliers, or warranty claims made by customers. iii. Activity Based Management and Activity Based Costing have different objectives but both are built upon gaining understanding of activities and activity analysis. iv. When eliminating a non-value adding activity, the cost savings resulting from the elimination must be less than the cost of implementing the activity analysis initiative. 51. Which of the following statements correctly identify issues that arise from or relate to outsourcing and/or offshoring? I Outsourcing commonly results in an increased dependence on third parties for the most strategically important functions of an organisation. II Life cycle costs for an outsourced function can be greater than if the function had been retained in-house. III Outsourcing is unlikely to provide a firm with increased flexibility to accommodate changing market conditions. IV Outsourcing can result in service and quality levels being less than would be achieved by internal providers. V Outsourcing can provides greater access to expertise and resources. However long-term dependency on outsourcing can arise. i. I, II and IV. ii. II, IV and V. iii. III, and V. iv. IV and V