Free CIMA-P1 Exam Dumps Preview

JRL manufactures two products from different combinations of the same resources. Unit selling prices and unit cost details for each product are as follows:

Identify, using graphical linear programming, the weekly production schedule for products J and L that will maximize the profits of JRL during the next four weeks.

Which THREE of the following would be contained within a master budget?

A medium-sized manufacturing company, which operates in the electronics industry, has employed a firm of consultants to carry out a review of the company's planning and control systems. The company presently uses a traditional incremental budgeting system and the inventory management system is based on economic order quantities (EOQ) and reorder levels. The company's normal production patterns have changed significantly over the previous few years as a result of increasing demand for customized products. This has resulted in shorter production runs and difficulties with production and resource planning. The consultants have recommended the implementation of activity based budgeting and a manufacturing resource planning system to improve planning and resource management.

What are the benefits for the company that could occur following the introduction of an activity based budgeting system?

Select ALL the correct answers.

GH manufactures a product using skilled labour and high quality materials. The company operates a standard costing system and a just-in-time (JIT) purchasing and production system. The standard selling price and variable costs for one unit of the product are as follows:

Calculate the following variances for October, taking account of the more detailed information regarding the labour mix:

(i) The total labour efficiency variance

(ii) The total labour mix variance

(iii) The total labour yield variance

Select the correct statements.

A master budget comprises the...

Changing to a just-in-time, from a traditional, manufacturing environment can affect cost accounting systems.

Which of the following statements is correct?

You are a trainee management accountant working for a prestigious manufacturing firm. One day you go to a business meeting a business meeting and the managing director is there. They stand up and say that the company is losing too much money through wastage and losses and so they have decided to implement a total quality management system. They go on to say this system will:

1:Allow the company to improve on a consistent and continual basis

2:Allow the company to identify and allocate quality accountability to certain departments

3:Help the company detect error and fraud Are ALL of these statements correct?

When preparing data for a short term decision, which THREE of the following are relevant costs?

Which of the following statements about total quality management are incorrect? Select ALL that apply.

DRAG DROP

Which of the statements about allocation of joint costs to products are true and which are false?

CORRECT TEXT

JKI is planning a golfing holiday for a group of wealthy lawyers.

The lawyers will fly to the local airport at their own expense. JKI will then pay for transport, accommodation and the use of the golf course (green fees).

JKI's costings are as follows, based on 28 participants:

JKI received 46 applications from potential participants.

What would the profit be if JKI accepted all of these bookings?

Give your answer to the nearest whole number.

A special contract requires 640 units of component T.

The inventory of 280 units of component T cost $0.20 per unit but the component is not currently used by the company.

The current market price of component T is $0.24 per unit but the inventory could be sold for $0.15 per unit.

The relevant cost of the units of component T required for the special contract is:

Your company want to know how many units they'd have to sell this season to break even. However, you have some reservations over whether or not breakeven analysis is suitable for the company.

Which of these assumptions over product range limit the accuracy of break even analysis? Select ALL that apply.

Your company operates using TQM. As the accountant you have been tasked with producing a quality report so that management can understand how well their new range of products is being received and how the quality of the products has improved. In order to produce the report you have requested information from different departments, but you soon realise not all the information is relevant. You have information regarding the following:

Cost of downtime Training costs Environmental costs Customer returns and refunds Number of defects per unit Which pieces of information are relevant to your report? Select ALL that apply.

The cost card for one unit of Product G is as follows:

The opening and closing inventories of Product G for month 5 are budgeted to be 10 units and 60 units respectively.
Profit for month 5 using absorption costing is budgeted to be $15,000.

What is the budgeted profit for month 5 using throughput costing?

A manager has not yet used all oh his budget. He is worried that his budget maybe reduced next year if he is not seen to have needed all the funds. He decides to spend the remaining £1,580 on another team building exercise as well as a catered lunch for his department.

This example falls under which behavioural aspect of budgetary control?

A company makes a product using two materials, X and Y.

The standard materials required for one unit of the product are:

What is the direct material mix variance for Material X, using the individual valuation basis?

Two products being produced by a company require the same material which is limited to 2,600 kgs.

What is the optimal production plan?

A pharmaceutical company manufactures pesticides which contain highly toxic chemicals.

In the context of environmental costing, which of the following would be classified as an external failure cost?

A musical instrument manufacturing company is considering a new project that will require 1000 kg of wood. They have 700 kgs of wood in stock which was purchased last year for £4 per kg. The wood in stock can be sold back to the supplier for £5 per kg. The wood in stock will have to be replaced if it is used. The current purchase price of wood is £8 per kg.

Using this information, what is the relevant cost of wood for the manufacturers decision on this project?

CORRECT TEXT

XY sells two products for which the budgeted contribution to sales ratios are as follows:

Total budgeted sales revenue is $920,000, of which $368,000 will be generated by product

The products must be sold in a constant mix.

Budgeted fixed costs are $105,000.

What is the budgeted breakeven sales revenue?

Give your answer to the nearest $.

DRAG DROP

A company is choosing between three projects, Project L, Project M and Project N using minimax regret.
The outcome from each project is dependent on competitor reaction. If this is passive returns will be L
$4,000, M $3,500 and N $5,200. If it is aggressive returns will be L $3,200, M $2,800 and N $2,950. Place the tokens into the table to show the maximum regret for each project and whether the project would be
undertaken using minimax regret.

THS produces two products from different combinations of the same resources. Details of the products are shown below:

Identify, using graphical linear programming, the optimal production plan for products E and R to maximize THS's profit in the month.

A master budget comprises which of the following?

A time series (TS) is made up of two main components i.e. trend (T) and the seasonal variation (SV).

Which TWO of the following could be used to find the seasonal component of a trend?

CORRECT TEXT

Information about a company's two products is as follows:

The products are currently sold in equal quantities.

Monthly fixed costs are $360,000.

What is the monthly breakeven sales revenue assuming a sales quantity mix of 50/50?

Give your answer to the nearest $.

A manager must select one of three projects, W, X or Y.

The following payoff table has been prepared to show the outcomes in $000 at three possible levels of demand:

The manager is now preparing a regret matrix.

What figure (in $000) will be shown for Project Y in the regret matrix if the average demand arises?

CORRECT TEXT

Company XPP sells a perishable product that has to be produced each day in anticipation of the following day's sales.

Any product remaining unsold at the end of the day following production is wasted.

The payoff table below shows the daily profit or loss depending on the amounts produced and sold.

A new ordering system is being discussed with customers.

The new system would require customers to order in advance to enable production each day of the
following day's sales quantity, thus eliminating waste.

What is the expected increase in average daily profit if the new system is accepted by customers?

Give your answer as a whole number.

The standard production cost of making a product is as follows:

What is the fixed production overhead capacity variance?

Which of the following statements about contribution per unit is correct?

A manager is deciding which one of four services to provide next period. The contribution earned by each service will depend on the weather conditions as follows.

Using the maximin criterion, which service will the manager provide?

A healthcare company specializes in hip, knee and shoulder replacement operations, known as surgical procedures. As well as providing these surgical procedures the company offers pre operation and post operation in-patient care, in a fully equipped hospital, for those patients who will be undergoing the surgical procedures.

Surgeons are paid a fixed fee for each surgical procedure they perform and an additional amount for any follow-up consultations. Post procedure follow-up consultations are only undertaken if there are any complications in relation to the surgical procedure. There is no additional fee charged to patients for any follow up consultations. All other staff are paid annual salaries.

The company's existing costing system uses a single overhead rate, based on revenue, to charge the costs of support activities to the procedures. Concern has been raised about the inaccuracy of procedure costs and the company's accountant has initiated a project to implement an activity-based costing (ABC) system.

The project team has collected the following data on each of the procedures.

Calculate the profit per procedure for each of the three procedures, using the current basis for charging the costs of support activities to procedures.

What was the profit for the knee procedure?

A manager must choose one of three options: X, Y, or Z.
Using the maximax decision criterion, which project is selected?

Which of the following distinguishes risk from uncertainty?

A company's management is considering investing in a project with an expected life of 4 years. It has a positive net present value of $180,000 when cash flows are discounted at 8% per annum. The project's cash flows include a cash outflow of $100,000 for each of the four years. No tax is payable on projects of this type.

The percentage increase in the annual cash outflow that would cause the company's management to reject the project from a financial perspective is, to the nearest 0.1%:

A company is preparing its annual budget and is estimating the number of units of Product W 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:

Calculate the expected unit sales of Product W for each quarter of year 2, after adjusting for seasonal variations using the multiplicative model.

A company has to choose between three mutually exclusive projects. Market research has shown that customers could react to the projects in three different ways depending on their preferences. There is a 30% chance that customers will exhibit preferences 1, a 20% chance they will exhibit preferences 2 and a 50% chance they will exhibit preferences 3. The company uses expected value to make this type of decision.

The net present value of each of the possible outcomes is as follows:

A market research company believes it can provide perfect information about the preferences of customers in this market.

What is the maximum amount that should be paid for the information from the market research company?

The budgetary control report of XYZ for the latest period is shown below. Variances in brackets are adverse.

What is the sales volume profit variance?

DRAG DROP

A company is choosing between three projects, Project P, Project Q and Project R using minimax regret as the criterion for the decision. The outcome from each project is dependent on future economic growth. If this is strong, returns will be P $5,000, Q $6,500 and R $7,200. If it is weak, returns will be P $3,500, Q
$4,800 and R $4,200.

Place the correct figures into the table to show the maximum regret for each project.

PQR is preparing the production budget for one of its products, the DX1, for the forthcoming year.

The following information is available:

How many units of the DX1 will need to be produced in the forthcoming year?

XY can choose from four mutually exclusive projects. The projects will each last for one year and their net cash inflows will be determined by market conditions. The forecast net cash inflows for each of the possible outcomes are shown below.

If the company applies the maximin criterion the project chosen would be:

Which costing method, used in just-in-time (JIT) production systems, attaches cost directly to output rather than following the flow of product through the production process?