CIMA Exam CIMAPRO19-P01-1 Topic 2 Question 105 Discussion

Actual exam question for CIMA's CIMAPRO19-P01-1 exam

Question #: 105
Topic #: 2

'A zero-based budgeting system involves establishing decision packages that are then ranked in order of their relative importance in meeting the organization's objectives'.

Which of the following is true regardinghe difficulties that a not-for-profit organization may experience when trying to rank decision packages.

Select ALL true statements.

AThe activities that are being proposed in a budget are described in variable packages. There will often be more less than one decision package proposed for an activity.

BThe activities that are being proposed in a budget are described in decision packages. There will often be more than one decision package proposed for an activity.

CSome of these packages will be inclusive and will require operations to select the best solution to the issue involved.

DSome of these packages will be mutually inclusive and will require management to select the best solution to the issue involved.

EEach decision package is evaluated. Its costs are compared to its benefits and net present values or other measures calculated.

FManagement may decide to reject packages even though the activity was done last year. In this way the organization is said to be starting from a zero base with each package given due consideration.

GManagement may decide to accept packages even though the activity was done last year. In this way the organization is said to be starting from a 100% cost base with each package given due consideration.

HIn a public sector body, for example, decision packages will relate profit making activities.

IIn a public sector body, for example, decision packages will relate to very disparate activities.

Show Suggested Answer

Suggested Answer: A

References:

by Kassandra at Jan 15, 2025, 06:18 AM

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Heike

1 months ago

I just hope the graders have a good sense of humor when they come across my answers. Maybe I'll add a few snide comments about how these questions are designed to make accountants feel like they're solving the Da Vinci Code or something. Gotta keep it light, you know?

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Vallie

17 days ago

E) Each decision package is evaluated. Its costs are compared to its benefits and net present values or other measures calculated.

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Tomas

20 days ago

B) The activities that are being proposed in a budget are described in decision packages. There will often be more than one decision package proposed for an activity.

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Lai

1 months ago

A) The activities that are being proposed in a budget are described in variable packages. There will often be more less than one decision package proposed for an activity.

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Rasheeda

2 months ago

You know, I'm starting to think the folks who write these exam questions are just trying to keep us on our toes. 'Mutually inclusive' and 'zero base'? Sounds like they're trying to trip us up with fancy terminology. But I'll give it my best shot!

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Gwenn

25 days ago

E) Each decision package is evaluated. Its costs are compared to its benefits and net present values or other measures calculated.

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Alesia

1 months ago

C) Some of these packages will be inclusive and will require operations to select the best solution to the issue involved.

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Serita

1 months ago

A) The activities that are being proposed in a budget are described in decision packages. There will often be more than one decision package proposed for an activity.

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Janey

2 months ago

Hah, I bet the folks in the public sector are scratching their heads over the 'profit making activities' in H. That's about as likely as a zero-based budget system actually being simple to implement.

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Louvenia

14 days ago

Hah, profit making activities in the public sector? That's a good one!

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Van

19 days ago

E) Each decision package is evaluated. Its costs are compared to its benefits and net present values or other measures calculated.

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Eric

20 days ago

B) The activities that are being proposed in a budget are described in decision packages. There will often be more than one decision package proposed for an activity.

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Edison

1 months ago

A) The activities that are being proposed in a budget are described in variable packages. There will often be more less than one decision package proposed for an activity.

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Florinda

2 months ago

I agree with Celeste on the correct options. The bit about 'starting from a zero base' in F is interesting, but I'm not sure how that applies to a not-for-profit organization. Shouldn't they be focusing on meeting their objectives rather than worrying about profit?

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Celeste

2 months ago

Okay, let's see here. B, C, D, and E seem to be the correct options. I'm a bit confused about the 'mutually inclusive' part in D, though. Does that mean the packages are somehow interconnected?

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Serita

1 months ago

I agree with you. B, C, D, and E are the correct options. And yes, mutually inclusive means the packages are interconnected.

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Augustine

1 months ago

Yes, you're correct. B, C, and E are definitely true. And yes, mutually inclusive means the packages are interconnected.

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Louisa

3 months ago

I also think option E is true. Each decision package needs to be evaluated based on costs and benefits.

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Keneth

3 months ago

I agree with Ollie. Option A makes sense as decision packages can vary in the activities proposed.

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Ollie

3 months ago

I think option A is true because decision packages are described in variable packages.

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