CIMA CIMA-P1 Online Practice Questions and Exam Preparation

CIMA CIMA-P1 Online Questions & Answers

• Question 191:

  Which THREE of the following statements about different costing systems are correct?

  A. Contribution per unit is the selling price per unit minus the variable costs per unit.
  B. In a period during which finished goods inventory levels fall, profit using marginal costing will be higher than if absorption costing is used.
  C. When valuing inventory using throughput costing, the direct labour cost is excluded.
  D. Over-absorption of fixed production overhead is caused by actual sales exceeding budgeted sales.
  E. Finished goods inventory will be assigned a higher value using throughput costing than absorption costing.
  A. Contribution per unit is the selling price per unit minus the variable costs per unit.
  B. In a period during which finished goods inventory levels fall, profit using marginal costing will be higher than if absorption costing is used.
  C. When valuing inventory using throughput costing, the direct labour cost is excluded.

• Question 192:

  Forecast sales demand of product W next period is 6,800 units. Product W requires 5 kg of material Y, seven hours of skilled labour and six hours of semi-skilled labour. Availability of resources for next period is forecast as follows:

  

  No inventories are held.

  What is the principal budget factor for next period?

  A. Sales demand
  B. Availability of material Y
  C. Availability of skilled labour
  D. Availability of semi-skilled labour
  C. Availability of skilled labour

• Question 193:

  A company is bidding to win a special contract.

  Which of the following is NOT a relevant cost to the company of undertaking the contract?

  A. The purchase cost of direct materials not currently in inventory.
  B. The cost of hiring a machine which will be hired if the contract is won.
  C. The cost of a training course for staff which will be undertaken if the contract is won.
  D. The depreciation charge on the tools which will be used during the contract.
  D. The depreciation charge on the tools which will be used during the contract.

• Question 194:

  The standard output from a joint process is 4,000 litres of Product K, 6,000 litres of Product L and 3,000 litres of Product M.

  The total cost of the joint process is $147,000.

  The company is now deciding if it should further process Product L.

  In the further processing decision the best way to apportion the joint costs to the products is:

  A. in the ratio of 4:6:3.
  B. in the ratio of the sales value at the split-off point.
  C. in the ratio of the sales value after further processing.
  D. it is not necessary to allocate joint costs in a further processing decision.
  D. it is not necessary to allocate joint costs in a further processing decision.

• Question 195:

  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.

  A. Optimum plan (including major customer order) is therefore:W 900 unitsR 700 unitsX 2,100 units
  B. Optimum plan (including major customer order) is therefore:W 1, 000 unitsR 600 unitsX 2,000 units
  C. Optimum plan (including major customer order) is therefore:W 910 unitsR 800 unitsX 2,200 units
  D. Optimum plan (including major customer order) is therefore:W 900 unitsR 650 unitsX 2,000 units
  E. Optimum plan (including major customer order) is therefore:W 950 unitsR 750 unitsX 2,300 units
  D. Optimum plan (including major customer order) is therefore:W 900 unitsR 650 unitsX 2,000 units

• Question 196:

  Company Y absorbs fixed production overheads using a rate per machine hour. Budgeted and actual data for month 8 are as follows:

  

  What is the fixed production overhead efficiency variance?

  A. $400,000 favourable
  B. $400,000 adverse
  C. $1,000,000 favourable
  D. $1,000,000 adverse
  A. $400,000 favourable

• Question 197:

  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. Labour yield variance: $ 144 000 A
  B. Labour mix variance: $ 66 000 F
  C. Labour efficiency variance: $ 78 000 A
  D. Labour efficiency variance: $ 78 000 F
  E. Labour efficiency variance: $ 88 000 F
  F. Labour mix variance: $ 75 000 F
  G. Labour efficiency variance: $ 98 000 A
  H. Labour mix variance: $ 63 000 A
  A. Labour yield variance: $ 144 000 A
  B. Labour mix variance: $ 66 000 F
  C. Labour efficiency variance: $ 78 000 A

• Question 198:

  A manager has to decide between four mutually exclusive projects, A, B, C and D:

  

  Using the above information, which Project would a risk seeking manager choose?

  A. Project A
  B. Project B
  C. Project C
  D. Project D
  D. Project D

• Question 199:

  A company's initial budget for month 3 includes sales of $100,000, a contribution to sales (C/S) ratio of 40% and fixed costs of $20,000.

  If the budgeted sales volume in month 3 is reduced by 5% but contribution per unit, total fixed costs and sales mix are unchanged, which of the following statements, about the change to the budgeted profit or contribution in month 3 is true?

  A. The revised budgeted profit would be lower by less than 5%.
  B. The revised budgeted profit would be lower by more than 5%.
  C. The revised budgeted contribution would be lower by less than 5%.
  D. The revised budgeted contribution would be lower by more than 5%.
  B. The revised budgeted profit would be lower by more than 5%.

• Question 200:

  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?

  A. $480F
  B. $300F
  C. $160A
  D. $640A
  A. $480F