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File Info

Exam	P1 Management Accounting)
Number	CIMAPRO15-P01-X1-ENG
File Name	CIMA.CIMAPRO15-P01-X1-ENG.TestKing.2019-04-12.31q.tqb
Size	2 MB
Posted	Apr 12, 2019
Download	CIMA.CIMAPRO15-P01-X1-ENG.TestKing.2019-04-12.31q.tqb

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Demo Questions

Question 1

A company produces three products D, E and F. The statement below shows the selling price and product costs per unit for each product, based on a traditional

absorption costing system.

Each of the products is produced using Process A which has a maximum capacity of 2,500 hours per period.

If a throughput accounting approach is used, the ranking of products, in order of priority, for the profit maximizing product mix will be:

D, E, F
E, D, F
F, D, E
D, F, E

Correct answer: C

Explanation:

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/

Question 3

A company has budgeted to produce 5,000 units of Product B per month. The opening and closing inventories of Product B for next month are budgeted to be 400 units and 900 units respectively. The budgeted selling price and variable production costs per unit for Product B are as follows:

Total budgeted fixed production overheads are $29,500 per month. The company absorbs fixed production overheads on the basis of the budgeted number of units produced. The budgeted profit for Product B for next month, using absorption costing, is $20,700.

Prepare a marginal costing statement which shows the budgeted profit for Product B for next month.

What was the difference between the profit calculation using marginal costing and the profit calculation using absorption costing?