P2 Exam Questions and Answers | Exam-Dumps (Page: 4)

QUESTION: 16

Which of the following statements regarding multinational transfer pricing is INCORRECT?

Transfer prices affect tax liabilities and royalties because of different laws in countries.
If transfer prices are inflated, this will increase profits of buying division.
Companies have incentives to set transfer price to increase revenues in low-tax countries.
Companies have incentives to set transfer price to increase costs in high-tax countries.

Answer(s): B

An airline prides itself on using highly reliable aircraft that are maintained to the highest possible standard and that its flight crews are arguably the best in the industry. Despite that, the directors accept that there remains a slight possibility that there will be a fatal accident.
Which THREE of the following statements are correct?

The airline appears to be behaving responsibly.
It is unlikely that any airline could totally eliminate all possibility of a fatal accident.
The airline's directors can justify their behavior on the basis that they insist on exceeding all relevant statutory and industry safety standards.
Fatal air accidents can be justified on the basis that some risk is inevitable.
The airline should cease operations in order to eliminate the risk of a fatal accident.

Answer(s): A,B,C

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QUESTION: 18

DRAG DROP (Drag and Drop is not supported)

Using Porter's value chain, place the tokens to correctly categories the following activities of a manufacturing company.

See Explanation section for answer.

Answer(s): A

Explanation:

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QUESTION: 19

CORRECT TEXT
A cost centre manager's performance is monitored based on a comparison of actual and budgeted cost. A summary performance report for the latest period is shown below.

The actual costs include:

*$28,000 for allocated head office costs.

*$18,000 payment for a rental agreement entered into by the cost centre manager two years ago.

*$34,000 for depreciation.

What is the cost centre manager's controllable actual cost for the period?

Give your answer to the nearest $000.

$308000

Answer(s): A

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QUESTION: 20

SkillWeave are an international clothing manufacturer known for their durable and high quality products. Recently their biggest market in the world's premier customs union has had some economic volatility. This has

resulted in the currency of this market being very unstable and difficult to predict in terms of
whether it will retain, lose or gain relative value to domestic currency.

Which of the following is an effective risk reduction technique for SkillWeave's clothing sales to this region?

Pay part suppliers from the region in their currency, generated from sales in the region
Temporarily stop producing for and selling cars to the region
Pay part suppliers from the region in domestic currency, generated from sales in the region
Buy parts domestically to avoid using the region's currency

Answer(s): A

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CIMA P2 Exam (page: 4)
CIMA Advanced Management Accounting
Updated on: 13-Dec-2025

QUESTION: 16

QUESTION: 17

QUESTION: 18

Explanation:

QUESTION: 19

QUESTION: 20

CIMA P2 Exam (page: 4) CIMA Advanced Management Accounting Updated on: 13-Dec-2025

QUESTION: 16

QUESTION: 17

QUESTION: 18

Explanation:

QUESTION: 19

QUESTION: 20

CIMA P2 Exam (page: 4)
CIMA Advanced Management Accounting
Updated on: 13-Dec-2025