CPHR Financial Analysis and Reporting 3

Question 1

HR is analyzing turnover costs. If replacing an exempt employee costs approximately 50–200% of annual salary, and the average salary is $80,000, what is the low-end replacement cost estimate?

Accepted Answer

$40,000

Answer

50% of $80,000 = $40,000 as the low-end estimate for replacing an exempt employee.

Question 2

What is the primary purpose of a workforce planning financial model?

Accepted Answer

To project future labor costs aligned with business forecasts

Answer

Workforce planning financial models link headcount and skill projections to cost forecasts, ensuring labor supply aligns with business strategy.

Question 3

Which of the following is an example of a fixed labor cost?

Accepted Answer

Salaried employee compensation

Answer

Salaried compensation remains constant regardless of business volume, making it a fixed cost for budgeting purposes.

Question 4

An HR department calculates its ROI on a leadership development program. Training cost $200,000 and the measured productivity gain was $320,000. What is the ROI?

Accepted Answer

60%

Answer

ROI = (Net Benefit ÷ Cost) × 100 = ($120,000 ÷ $200,000) × 100 = 60%.

Question 5

What does 'accrual basis accounting' mean in the context of HR expense reporting?

Accepted Answer

Expenses are recorded when incurred, regardless of when cash is paid

Answer

Accrual accounting matches expenses to the period in which they are incurred, not when the cash payment is made.

(CPHR) Chartered Professional in Human Resources Practice Test

(CPHR) Chartered Professional in Human Resources Practice Test

CPHR Financial Analysis and Reporting 3