Profitability Analysis

Instructions Before Starting the Practice Exam

Welcome to your CMA USA practice session! We wish you success as you begin your journey toward certification. Please read these guidelines carefully:

  1. Ensure you have a stable internet connection to avoid any disruptions during the exam.
  2. Carefully read each question and all answer choices.
  3. Set aside enough time to complete the practice exam under timed conditions to better simulate the actual exam experience.
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Good luck with your preparation, and aim for excellence!

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Category: Profitability analysis 2-3

1) Greenfield Properties is evaluating two different leasing options for office space. The company is considering which option will be more cost-effective based on projected office usage. The options are:

  • Lease Option A: A fixed monthly lease payment of $4,000.
  • Lease Option B: A variable lease payment of $5 per square foot of office space used.

Greenfield Properties expects that their office space usage will vary. At what level of office space usage (in square feet) would it make no difference to Greenfield Properties which lease option they choose?

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Category: Profitability Analysis 2-1

2) FashionForward, a retail clothing store, is setting prices for its new line of designer jackets. The cost of each jacket is $100. The store decides to use a markup pricing strategy, applying a markup of 50% on the cost. The store also wants to understand the profit margin associated with this pricing strategy.

Given that the cost of each jacket is $100 and the markup percentage is 50%, which of the following statements correctly describes the markup and profit margin for the jackets?

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