Question 1

A charity is reviewing their spend and budget after an operation in flooded areas. They realise that the operators save money against the budgeting plan. This saving is known as...?

Options :

A : Negative variance

B : Positive variance

C : Positive budget

D : Negative budget

Answer: A

Question 2

Which of the following are examples of fixed costs in a business?

Options :

A : Sales commission

B : Inventory rent

C : Salaries for managers

D : Consulting

E : Raw materials

Answer: B,C

Question 3

When procuring a machinery, at which stage buyer must check whether that machinery is working to the standards set out in the design specification?

Options :

A : Customer support

B : Maintenance and repair activities

C : Manufacture

D : Installation

Answer: D

Question 4

Sealines Inc is developing its fleet of cargo ships. The company is planning to build a new ship powered by natural gas. Brian, the procurement manager at Sealines, suggests the project team to develop a through-life specification before engaging with the supplier. Is this a correct approach?

Options :

A : Yes, decommissioning and disposal costs will not be accounted in this approach

B : Yes, this approach will lower the total cost of ownership

C : No, a ship is used only once, through-life management is unnecessary

D : No, the company just needs to select the lowest bidder

Answer: B

Question 5

ABC Ltd has enormous investment in facilities and machinery. It also employs skilled workforce. To be profitable, the company has to produce at massive quantity. Which sector does ABC Ltd belong to?

Options :

A : Manufacturing

B : Retail

C : Construction

D : Agriculture

E : Finance

Answer: A

Higher Test Marks with Free Online L4M2 Exam Practice

Buying Options: