CIPS L4M2 Defining Business Needs Exam Exam Practice Test Questions

• Question 1

  Aldar Properties is a property developer in UAE. In last month, it spent $2,160 for 10 tons of steel. In this month, it had planned 10% increment in budget for steel comparing to last month. But the number of orders boosted and total spend on steel reached $1,992.1 while Aldar has imported 11 tons. What is the main cost driver of steel budget?

  • Both price and quantity variances
  • Inflation
  • Quantity variance
  • Price variance

  Show Answer Answer: D Next

• Question 2

  A company buys components from its supplier. However, the supplier has not sent the invoice to the buyer and the buyer will not pay until next month. How will that amount of money be shown in the financial statements of the buying organization?

  • Accrued expense
  • Accrued interest
  • Tax liabilities
  • Accounts payable

  Show Answer Answer: A Next

• Question 3

  Which kind of these following costs belong to fixed costs? Select TWO that apply.

  • Energy consumption in manufacturing
  • The annual income tax charged by local authorities
  • The packaging and distribution costs
  • The depreciation of capital inputs
  • The costs of leasing or purchasing capital equipment

  Show Answer Answer: D, E Next

• Question 4

  Which of the following is the disadvantage of embedding standards in a specification?

  • Standards do not improving buyer's bargaining power
  • Embedding standards into specification requires enormous time and effort
  • Standards are too static and discourage innovation
  • Standards are too flexible and may cause ambiguity in the specification

  Show Answer Answer: C Next

• Question 5

  Which of the following can cause overhead variance? Select TWO that apply:

  • Rising production worker's wage rate per hour
  • Decrease in production volume
  • Spike in material price
  • Decreasing packaging costs
  • Spike in monthly leasing fee

  Show Answer Answer: B, E Next