Free CIMA CIMAPRA19-P02-1-ENG Exam Questions

Become CIMA Certified with updated CIMAPRA19-P02-1-ENG exam questions and correct answers

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Total 205 Questions | Updated On: Jan 27, 2026

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Question 1

GHY has two subsidiaries. GHY-Motor manufactures car engines and GHY-Build designs and assembles cars. In the car industry it is common for manufacturers to buy parts, including engines, from other manufacturers.
GHY has granted GHY-Motor and GHY-Build full autonomy. GHY-Build is considering using an engine from another company for a new model that it is designing. GYY-Motor has a suitable engine, but it charges more than GHY-Build's preferred supplier.
Which of the following statements is correct? Select ALL that apply.

A : Y should consider permitting GHY-Motor to charge part of the selling price on engines sold to GHY-Build to head office.

B : rcing GHY-Motor to grant a discount to GHY-Build could lead to dysfunctional behavior.

C : There could be significant non-financial issues associated with GHY-Build's decision to buy another engine.

D : rent companies should never grant subsidiaries full autonomy on matters such as intra-group sales.

E : threat of dysfunctional behavior is largely theoretical and managers can be trusted to maximise shareholder wealth.

Answer: A,B,C

Question 2

Which TWO of the following expressions are correct?

A : 1 + money rate = (1 + real rate) x (1 + inflation rate)

B : 1 + real rate = (1 + money rate) / (1 + inflation rate)

C : 1 + real rate = (1 + inflation rate) / (1 + money rate)

D : 1 + money rate = (1 + inflation rate) / (1 + real rate)

E : 1 + inflation rate = (1 + money rate) x (1 + real rate)

Answer: A,B

Question 3

How does beyond budgeting NOT help to resolve the weaknesses of traditional budgeting? Select ALL that apply.

A : nagers are set goals and targets to achieve rather than abiding by strict budgets and variances.

B : nagers have a much larger scope of business goals that when achieved, will increase shareholder value.

C : nagers are given more freedom and control over their business units under Beyond budgeting.

D : nagers focus on keeping costs low in the short term to ensure maximised profits.

E : nagers are given incentives to meet or undercut budgets.

F : nagers are encouraged to designate responsibility to others to lessen their workload so they may concentrate on important tasks.

Answer: A,D

Question 4

A large company that sells a single product has many customers. The contribution per unit of the product is $40. Data for the company as a whole are given below.

Using customer profitability analysis, what is the total annual profit for this customer?

A : $1,660,000

B : $1,780,000

C : $1,460,000

D : $2,340,000

Answer: A

Question 5

An organization has a decentralized structure in which division A supplies division B with an intermediate product for which there is no external market. Division B carries out further processing and then sells the final product on the external market. Due to organizational policy the current transfer pricing basis is variable cost.
The manager of division A has stated, 'The current transfer price is unfair because it does not enable us to recoup our costs'.
The manager of division B has stated, 'The current transfer pricing system enables us to quote competitive prices for the finished product'.
The Chief Executive of the organization is considering imposing a transfer pricing policy that uses dual pricing.
Dual pricing would:

A : welcomed by the manager of division A but the manager of division B would resist it.

B : welcomed by both divisional managers.

C : crease divisional autonomy.

D : volve a lump sum payment to division A in addition to the payment of the variable cost per unit.

Answer: B

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Total 205 Questions | Updated On: Jan 27, 2026

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