CIMA CIMA-P1 Online Practice Questions and Exam Preparation

CIMA CIMA-P1 Online Questions & Answers

• Question 11:

  Which of the following are examples of feedforward control? Select ALL that apply.

  A. Labour costs for individual jobs are forecast. The forecasts are used as the basis to determine the correct selling price to be quoted to the customer.
  B. The sales volume for the next quarter is forecast and compared with the planned volume. If there is a forecast shortfall action is taken to correct the difference.
  C. A target is set for the cash balance at the period end. The balance shown in the cash forecast is compared with the target and action is taken to ensure that the target balance is achieved.
  D. Actual inventory volumes are compared with planned volumes and control action is taken to correct any differences.
  B. The sales volume for the next quarter is forecast and compared with the planned volume. If there is a forecast shortfall action is taken to correct the difference.
  C. A target is set for the cash balance at the period end. The balance shown in the cash forecast is compared with the target and action is taken to ensure that the target balance is achieved.

• Question 12:

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

  A. Budgeted statement of financial position
  B. Budgeted cash flow statement
  C. Budgeted income statement
  D. Capital expenditure budget
  E. Directors' salaries budget
  F. Sales budget
  A. Budgeted statement of financial position
  B. Budgeted cash flow statement
  C. Budgeted income statement

• Question 13:

  CORRECT TEXT

  An agricultural company uses activity based costing to charge overheads to its three products. One of the main activities is purchasing, budgeted details of which are as follows:

  Additional budgeted data:

  

  What is the budgeted purchasing overhead cost per kg of Product S?

  Give your answer to 2 decimal places.

  $0.72

• Question 14:

  Which one of the following would NOT be included in a decision to close a division of an organization?

  A. Head office overheads absorbed on the basis of the number of units produced
  B. Sale of unwanted non-current assets
  C. Redundancy pay for employees of the division
  D. Fixed costs directly attributable to the division
  A. Head office overheads absorbed on the basis of the number of units produced

• Question 15:

  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.

  Select and Place:

  

  

• Question 16:

  A company has a budgeted contribution to sales (C/S) ratio of 30% and a budgeted operating profit margin of 20%. Budgeted sales were $100,000. In month 2, actual production and sales volumes and all costs were as budgeted. The actual C/S ratio was 33% .

  Which of the following statements, about the company's contribution and operating profit in month 2, is correct?

  A. Actual operating profit was more than 10% higher than budgeted operating profit.
  B. Actual contribution was less than 10% higher than budgeted contribution.
  C. Actual operating profit was less than 10% higher than budgeted operating profit.
  D. Actual contribution was exactly 10% higher than budgeted contribution.
  A. Actual operating profit was more than 10% higher than budgeted operating profit.

• Question 17:

  RT produces two products from different quantities of the same resources using a just-in- time (JIT) production system. The selling price and resource requirements of each of the products are shown below:

  

  Market research shows that the maximum demand for products R and T during June 2010 is 500 units and 800 units respectively. This does not include an order that RT has agreed with a commercial customer for the supply of 250 units of R and 350 units of T at selling prices of $100 and $135 per unit respectively. Although the customer will accept part of the order, failure by RT to deliver the order in full by the end of June will cause RT to incur a $10,000 financial penalty. At a recent meeting of the purchasing and production managers to discuss the production plans of RT for June, the following resource restrictions for June were identified:

  Direct labour hours 7,500 hours Material A 8,500 kgs Material B 3,000 litres Machine hours 7,500 hours Assuming that RT completes the order with the commercial customer, prepare calculations to show, from a financial perspective, the optimum production plan for June 2010 and the contribution that would result from adopting this plan. The optimum production plan will be:

  A. Contract: R = 250, T = 360 and Market: R = 500 T = 710
  B. Contract: R = 250, T = 360 and Market: R = 600 T = 710
  C. Contract: R = 250, T = 360 and Market: R = 650 T = 710
  D. Contract: R = 250, T = 360 and Market: R = 500 T = 700
  E. Contract: R = 250, T = 360 and Market: R = 660 T = 720
  D. Contract: R = 250, T = 360 and Market: R = 500 T = 700

• Question 18:

  Which THREE of the following are functional budgets?

  A. Human resource budget
  B. Sales budget
  C. Research and development budget
  D. Master budget
  E. Cash budget
  A. Human resource budget
  B. Sales budget
  C. Research and development budget

• Question 19:

  A company uses limiting factor analysis to identify its optimal production plan. All of the company's products are manufactured in house and cannot be bought in. What objective is assumed with limited factor analysis?

  A. Cost minimisation
  B. Ensuring customer demand is met
  C. Profit maximisation
  D. Revenue maximisation
  C. Profit maximisation

• Question 20:

  A company sells two products, X and Y, which are always sold in the same ratio.

  No inventories are held.

  The following budgeted data relate to month 10:

  

  What is the budgeted margin of safety in month 10?

  A. 600 units
  B. 5,400 units
  C. 1,000 units
  D. 5,000 units
  A. 600 units