CIMA Exam CIMAPRO19-P01-1 Topic 2 Question 105 Discussion

Actual exam question for CIMA's CIMAPRO19-P01-1 exam

Question #: 105
Topic #: 2

'A zero-based budgeting system involves establishing decision packages that are then ranked in order of their relative importance in meeting the organization's objectives'.

Which of the following is true regardinghe difficulties that a not-for-profit organization may experience when trying to rank decision packages.

Select ALL true statements.

AThe activities that are being proposed in a budget are described in variable packages. There will often be more less than one decision package proposed for an activity.

BThe activities that are being proposed in a budget are described in decision packages. There will often be more than one decision package proposed for an activity.

CSome of these packages will be inclusive and will require operations to select the best solution to the issue involved.

DSome of these packages will be mutually inclusive and will require management to select the best solution to the issue involved.

EEach decision package is evaluated. Its costs are compared to its benefits and net present values or other measures calculated.

FManagement may decide to reject packages even though the activity was done last year. In this way the organization is said to be starting from a zero base with each package given due consideration.

GManagement may decide to accept packages even though the activity was done last year. In this way the organization is said to be starting from a 100% cost base with each package given due consideration.

HIn a public sector body, for example, decision packages will relate profit making activities.

IIn a public sector body, for example, decision packages will relate to very disparate activities.

Show Suggested Answer

Suggested Answer: A

References:

by Kassandra at Jan 15, 2025, 06:18 AM

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Louisa

9 days ago

I also think option E is true. Each decision package needs to be evaluated based on costs and benefits.

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Keneth

10 days ago

I agree with Ollie. Option A makes sense as decision packages can vary in the activities proposed.

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Ollie

11 days ago

I think option A is true because decision packages are described in variable packages.

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