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CIPS Exam L3M2 Topic 1 Question 13 Discussion

Actual exam question for CIPS's L3M2 exam

Question #: 13
Topic #: 1

[All L3M2 Questions]

'From an accounting perspective, added value is total XXXXXX minus total costs of all activities'.

Which word is missing?

ACosts

BExpenditure

CSavings

DRevenue

Show Suggested Answer

Suggested Answer: C

The Economic Order Quantity is a formula which attempts to calculate the most efficient quantity to order at any given time, by attempting to reconcile the cost of stockholding and the cost of plac-ing an order. This could then have implications for the timing of an order being placed.

The cost of holding stock can be reasonably accurately calculated and agreed with one's peers. However, determining the cost of placing an order can keep colleagues up late into the night, and can be a great topic to liven up a sleepy procurement / finance function.

by Estrella at Jun 23, 2024, 03:25 PM

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Sylvia

5 days ago

Gotta be D) Revenue. I mean, who cares about costs or savings when you're trying to calculate added value? Show me the money!

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Anglea

11 days ago

D) Revenue makes the most sense to me. Can't have added value without revenue, right?

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Blondell

14 days ago

Hmm, I was leaning towards B) Expenditure, but now I'm not so sure. This is a tricky one.

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Lilli

16 days ago

I agree with Ahmed, A) Costs makes the most sense in this context.

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Ahmed

18 days ago

I think it's A) Costs because added value is calculated by subtracting costs from total revenue.

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Launa

18 days ago

I think it's D) Revenue. That's the classic definition of added value in accounting.

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Slyvia

24 days ago

A) Costs

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