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Financial CMA Exam (page: 9)
Financial Certified Management Accountant
Updated on: 25-Dec-2025

Viewing Page 9 of 270
CMA PDF 1336 Questions

Details: Strategic and tactical Planning 1

The process of developing plans for a company's expected operations and controlling the operations to help carry out those plan is?

  1. Preparing a period budget.
  2. Preparing a master budget.
  3. Budgetary control
  4. Participative budgeting.

Answer(s): C

Explanation:

The budget has same structure as the organization itself. Is made up of a hierarchy of smaller budgets, each representing the plan of a division, department, or other unit in the organizational structure. Successful budgeting requires completion of plan that states organizational goals before the budgeting process. Prevention and detection of deviations from the budget are the control purposes of budgets.




Details: Strategic and tactical Planning 1

Zero-based budgeting force managers to?

  1. Estimate a product's revenues and expenses over its expected life cycle.
  2. Prepare a budget based on historical costs.
  3. Formulate a budget by objective rather than function.
  4. Justify all expenditures at the beginning of every budget period.

Answer(s): D

Explanation:

Zero-based budget is a planning process in which each manager must justify his/her department's full budget for each period. The purpose is to encourage periodic reexamination of all costs in the hope that some can be reduced or eliminated.




Details: Strategic and tactical Planning 1

Which of the following statements regarding budgets is false?

  1. Budgets present organizational plans in a formal, logical, and integrated manner.
  2. Budgets are used only as a planning function.
  3. Budgets may be developed for cash flows or labor usage.
  4. A budget is a plan that contains a quantitative statement of expected results.

Answer(s): B

Explanation:

Budget formulation is a planning function; however, budgets are also useful control devices. Budget provide a basis for control of performance through comparisons of actual with budgeted data. They permit analysis of variations from plans and signal the need for corrective managerial action.




Details: Strategic and tactical Planning 1

Strategic planning is?

  1. Short term.
  2. Operational
  3. Long term
  4. Informal.

Answer(s): C

Explanation:

Strategic planning, also called long-term planning. Covers periods from 1 to 20 years. Strategic planning is somewhat difficult because of uncertainty about future conditions. Thus, long-range plans are more general and exclude operational detail.




Details: Strategic and tactical Planning 1

Which of the following activities would likely not be a consideration in strategic planning?

  1. New product development
  2. Capital budgeting
  3. Mergers
  4. Materials procurement

Answer(s): D

Explanation:

Strategic, or long-term, planning covers long periods of time and is concerned with matters such as new product development, capital budgeting; major financing, and mergers, acquisitions, and divestitures. Operational matters, such as materials procurement, are not a part of strategic planning, but they are a consideration in short- term, or operational , planning.



Viewing Page 9 of 270



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