File Info
| Exam | P1 Management Accounting) |
| Number | CIMAPRO15-P01-X1-ENG |
| File Name | CIMA.CIMAPRO15-P01-X1-ENG.CertKey.2019-04-04.33q.tqb |
| Size | 1 MB |
| Posted | Apr 04, 2019 |
| Download | CIMA.CIMAPRO15-P01-X1-ENG.CertKey.2019-04-04.33q.tqb |
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Demo Questions
Question 1
A company is preparing its annual budget and is estimating the number of units of Product A that it will sell in each quarter of year 2. Past experience has shown that the trend for sales of the product is represented by the following relationship:
y = a + bx where
y = number of sales units in the quarter a = 10,000 units b = 3,000 units x = the quarter number where 1 = quarter 1 of year 1
Actual sales of Product A in Year 1 were affected by seasonal variations and were as follows:
Quarter 1:14,000 units Quarter2: 18,000 units Quarter 3: 18,000 units Quarter 4: 20,000 units
Calculate the expected sales of Product A (in units) for each quarter of year 2, after adjusting for seasonal variations using the additive model.
- The expected sales for year 2 Quarter 4 was 32700 units
- The expected sales for year 2 Quarter 4 was 32000 units
- The expected sales for year 2 Quarter 4 was 33000 units
- The expected sales for year 2 Quarter 4 was 40000 units
Correct answer: B
Explanation:
Reference: https://www.vrelearnonline.com/cima-p1-103-11-ero/ Reference: https://www.vrelearnonline.com/cima-p1-103-11-ero/
Question 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 regarding he difficulties that a not-for-profit organization may experience when trying to rank decision packages.
Select ALL true statements.
- The 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.
- The 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.
- Some of these packages will be inclusive and will require operations to select the best solution to the issue involved.
- Some of these packages will be mutually inclusive and will require management to select the best solution to the issue involved.
- Each decision package is evaluated. Its costs are compared to its benefits and net present values or other measures calculated.
- Management 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.
- Management 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.
- In a public sector body, for example, decision packages will relate profit making activities.
- In a public sector body, for example, decision packages will relate to very disparate activities.
Correct answer: BDEFI
Explanation:
Reference: https://www.vrelearnonline.com/cima-p1-103-17/ Reference: https://www.vrelearnonline.com/cima-p1-103-17/
Question 3
JL is preparing its cash budget for the next three quarters. The following data have
been extracted from the operational budgets:
Additional information is available as follows:
- JL sells 20% of its goods for cash. Of the remaining sales value, 70% is received within the same quarter as sale and 30% is received in the following quarter. It is estimated that trade receivables will be $125,000 at the beginning of Quarter 1. No bad debts are anticipated.
- 50% of payments for direct material purchases are made in the quarter of purchase, with the remaining 50% in the quarter following purchase. It is estimated that the amount owing for direct material purchases will be $60,000 at the beginning of Quarter 1.
- JL pays labour and overhead costs when they are incurred. It has been estimated that labour and overhead costs in total will be $303,600 per quarter. This figure includes depreciation of $19,600.
- JL expects to repay a loan of $100,000 in Quarter 3.
- The cash balance at the beginning of Quarter 1 is estimated to be $49,400 positive.
Required:
Prepare a cash budget for each of the THREE quarters.
What will the closing balance of cash flows in quarter THREE be?
- $100 200
- $170 400
- $145 000
- $150 200
- $130 200
- $160 690
- $184 900
Correct answer: E
Explanation:
Reference: https://www.vrelearnonline.com/cima-p1-103-q19/ Reference: https://www.vrelearnonline.com/cima-p1-103-q19/
