Free CIM Level 6 Award in Commercial Intelligence Practice Questions

Sample Practice Questions

Try these 10 sample questions from the CIM Level 6 Award in Commercial Intelligence practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

1. 1A campaign generates £90,000 in sales and incurs £72,000 in total expenses. What profit does it generate?

   1. A.£18,000Correct answer: A
   2. B.£72,000
   3. C.£90,000
   4. D.£162,000

   Explanation: Business Queensland states: "Formula: Profit = Income - Expenses" £90,000 − £72,000 = £18,000. The other values respectively report expenses, sales, or their sum.

   Reference: Business Queensland — Break-even and profit — Profit basics

2. 2A campaign costs £4,800 and produces 120 new customers. What is its cost per acquisition?

   1. A.£4
   2. B.£40Correct answer: B
   3. C.£120
   4. D.£4,680

   Explanation: Business Queensland states: "It's calculated by adding up the costs associated with a product or online advertising campaign and dividing this cost by the number of new customers." £4,800 ÷ 120 = £40 per customer. £4 misplaces the decimal, £120 reports the count as money, and £4,680 subtracts the customer count from expenditure rather than dividing.

   Reference: Business Queensland — Measure your digital performance — Calculating expenses versus impact

3. 3A budget begins with last year's spending and adjusts it for expected inflation. Which approach is being used?

   1. A.Zero-based
   2. B.Activity-based
   3. C.Flexible
   4. D.IncrementalCorrect answer: D

   Explanation: The source states: "uses either last year’s budget or actual results as the starting base" Incremental budgeting adjusts a previous base; zero-based rejustifies costs, activity-based uses drivers, and flexible budgets span activity levels.

   Reference: ACCA — All about budgeting part 4 — Review: incremental budgeting

4. 4Which statement correctly describes the relationship between profit and the bank balance?

   1. A.They are always equal at the reporting date.
   2. B.They measure different aspects of financial performance.Correct answer: B
   3. C.Profit is always greater than the bank balance.
   4. D.The bank balance always equals sales revenue.

   Explanation: Business Queensland states: "Remember that profit is not the same as the amount of cash you have in the bank or your total sales." Profit measures income less expenses; the bank balance also reflects the timing of receipts and payments. Equality or a fixed ordering is not implied.

   Reference: Business Queensland — Break-even and profit — Profit basics

5. 5Which metric distinguishes the cost of generating potential customers from the cost of winning customers?

   1. A.Cost per acquisition
   2. B.Cost per click
   3. C.Cost per leadCorrect answer: C
   4. D.Cost per thousand impressions

   Explanation: Business Queensland states: "cost per lead—this measures how much each new lead cost your business." Cost per lead concerns potential customers generated. Acquisition concerns customers won, while click and impression costs concern advertising interactions or exposure rather than leads.

   Reference: Business Queensland — Measure your digital performance — Calculating expenses versus impact

6. 6What is a risk of using an incremental budget without reviewing its underlying assumptions?

   1. A.Outdated assumptions may be carried forward.Correct answer: A
   2. B.All costs will be justified anew without reference to history.
   3. C.The budget will automatically adjust to actual activity.
   4. D.Managers will automatically remove unused allowances.

   Explanation: The source states: "outdated assumptions which would be carried forward" Incremental budgeting can retain outdated assumptions; fresh justification, flexing and automatic removal do not follow from copying a historical base.

   Reference: ACCA — All about budgeting part 4 — Review: incremental budgeting

7. 7An event's total revenue exactly equals its total costs. Which financial result has it achieved?

   1. A.A gross margin of 100%
   2. B.A net loss equal to costs
   3. C.A break-even resultCorrect answer: C
   4. D.A profit equal to sales

   Explanation: Business Queensland states: "This is the point where your total revenue (sales or turnover) equals total costs." Equal revenue and cost means zero profit or loss, rather than any positive margin, loss, or profit equal to revenue.

   Reference: Business Queensland — Break-even and profit — Break-even point

8. 8An investment of £8,000 earns £2,000 net profit. Using net profit divided by investment, what is ROI?

   1. A.4%
   2. B.20%
   3. C.400%
   4. D.25%Correct answer: D

   Explanation: The source states: "Return on investment (%) = (Net profit ÷ Cost of investment) x 100" £2,000 ÷ £8,000 × 100 = 25%. Other rates confuse percentage base, reciprocal or decimal conversion.

   Reference: Business Queensland — Measure your digital performance — Calculating expenses versus impact

9. 9What does budgetary slack mean in a manager's proposal?

   1. A.A genuine forecast increase in supplier prices
   2. B.An extra cushion built into the budgetCorrect answer: B
   3. C.The difference caused by higher actual activity
   4. D.An adverse variance discovered after spending

   Explanation: ACCA describes slack as adding extra "to cushion their budget." It is an added cushion in the proposal, not a genuine forecast price rise, a change in actual activity or an actual spending variance.

   Reference: ACCA — All about budgeting part 4 — Review: incremental budgeting

10. 10A studio pays £2,000 monthly rent under a contract unaffected by campaign volume. How should this cost be classified within that volume range?

    1. A.A variable expense
    2. B.A mixed expense
    3. C.A stepped expense
    4. D.A fixed expenseCorrect answer: D

    Explanation: Business Queensland states: "Fixed expenses stay the same no matter how many items you produce or how many sales you make." Within the specified volume range the rent is fixed. Variable costs change with volume; mixed costs contain a variable element; stepped costs change at volume thresholds.

    Reference: Business Queensland — Break-even and profit — Expenses and costs — Fixed expenses