IMA CMA Part 1: Financial Planning - Performance and Analytics - CMA-Financial-Planning-Performance-and-Analytics

The best way to illustrate the entire distribution of numerical data for a single variable is with a

• A. histogram
• B. heat map
• C. pie chart
• D. bubble chart

Discuss how FDL's allocation of shared corporate services costs may overstate the profitability of the Food-To-Go division, and provide your recommendation on shared corporate services costs allocation.
Essay
Food Depot Ltd (FDD is a privately-held company that provides catering services to airlines and operates several restaurant chains including fast food, casual dining, and fine dining restaurants FDL has been profitable m recent years and has a very strong cash position FDL's newest division. Food-To-Go. is an online meal ordering and delivery platform acquired by FDL two years ago.
In 20X7. sales for the entire company were SI billion, with 50% of the business coming from the Airline Catering division. FDL is the country's leading airline catering services provider and controls 60% of the market share. However, the outlook of the airline catering industry is gloomy. The compound annual growth rate of the industry for the past five years was only 0.5% as airline networks have increasingly dropped catering on short domestic flights.
The Food-To-Go division only contributed 5% of FDL's total sales in 20X7 and is far behind in competing for market share of the online meal ordering and deliver, industry. It is estimated that Food-To-Go's sales were only 20% of the industry leader's sales However, the outlook for the online meal ordering and delivery services industry is bright. The compound annual growth rate of the industry since it started three years ago was 50%. It is estimated the rapid growth of the industry will continue in the foreseeable future.
The costs of shared corporate services are allocated based on each division s revenue FDL usually caps its capital expenditure budget to 4% of budgeted sales revenue In a recent capital budget coordination meeting.
Smith Whitney, the head of the Airline Catering division. complained that his division is underfunded on capital projects . The budgeted capital expenditure had been much less than 4 % of the division's budgeted sales in the past three years He argued that his division is the company's best-performing division, and it needs more funds to maintain its market share m the industry Whitney wants to reduce the capital expenditure budget for Food-To-Go and reallocate those funds to his division.
Susan Wiley, the bead of Food-To-Go, does not agree that the Airline Catering division is the best-performing division in the company Wiley argues that her division had the highest ROI in 20X7. and it deserves more capital funding FDL's required rate of return is 12%. The selected financial data for the Airline Catering division and Food-To-Go division in 20X7 are as follows (in $ millions).

See the Answer below in Explanation details.
Explanation
The revenues of food to go division are less as compared to airline catering division which means less proportion of the overheads win he diverted to the division irrespective of the use Recommended method
-stand-alone
-incremental method of allocating the snares corporate service costs|

Edward Pane is an external auditor who is seeking an understanding of the cash receipts process at his new client Pane decides to use a flowchart to analyze the operations for efficiency and control. Which one of the following statements is true with respect to the decision to use a flowchart for this purpose?

• A. Pane should not use a flowchart as it is used primarily after the risks have been identified
• B. Pane properly selected the flowchart as it will help to depict the process and identify any missing or inadequate controls
• C. Pane property selected the flowchart as a tool to match each of the risks to the corresponding primary control
• D. Pane should not have selected a flowchart as it is better suited to help with compliance testing of existing controls

Company A currently uses U.S GAAP while Company 8 is currently using IFRS. Both companies are individually in the process of internally developing trademarks that have been demonstrated to be technically and economically feasible Both companies have incurred development costs in the current year with respect to their internally developed trademarks. Which one of the following best describes how Company A and Company B should account for these development costs in their financial statements?

• A. Both Company A and Company B should capitalize the development costs
• B. Both Company A and Company B should expense the development costs
• C. Company A should capitalize the development costs while Company B should expense the development costs
• D. Company A should expense the development costs while Company B should capitalize the development costs

Two examples or measures that could appear in the Learning and Growth section of a balanced scorecard are

• A. employee promotion rate and number of environmental incidents
• B. employee training hours and product defect rates
• C. number of employee suggestions and finished products per day per employee
• D. employee turnover rate and employee training hours