CIMA CIMA-P1 Online Practice Questions and Exam Preparation

CIMA CIMA-P1 Online Questions & Answers

• Question 221:

  A manufacturing company has more units of finished goods inventory at the end of a period than at the beginning of the period. Which of the following statements is true?

  A. Profit is higher and opening inventory valuation is higher using marginal costing than if throughput costing is used.
  B. Profit is higher and opening inventory valuation is lower using marginal costing than if throughput costing is used.
  C. Profit is higher and opening inventory valuation is lower using absorption costing than if marginal costing is used.
  D. Profit is lower and opening inventory valuation is higher using marginal costing than if throughput costing is used.
  A. Profit is higher and opening inventory valuation is higher using marginal costing than if throughput costing is used.

• Question 222:

  Find the weighted average contribution per unit using the following information:

  

  A. £10
  B. £8
  C. £5.50
  D. £2.50
  D. £2.50

• Question 223:

  HOTSPOT

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

  The equation that represents the seasonal variation under the additive model is:

  

  

• Question 224:

  A company manufactures a single product. The cost card for a unit of this product is as follows: During month 6, finished goods inventory increased by 350 units.

  

  By how much would the profit differ in month 6 if finished goods inventory was valued at standard marginal cost rather than standard absorption cost?

  A. $1,050 lower
  B. $1,050 higher
  C. $2,450 lower
  D. $2,450 higher
  A. $1,050 lower

• Question 225:

  A company accountant is trying to determine the optimum production plan for the period using linear programming.

  The accountant has correctly formulated the linear programming problem as follows:

  Variables (products): x and y

  Objective function: Maximise contribution, C = 10x + 15y

  Material constraint: 4x + 6y 500 (kg)

  Labour constraint: x + 2y 350 (hours)

  Machine constraint: 10x + 4y 1,500 (hours)

  x constraint: 50 x 200

  y constraint: y 0

  Which of the following statements is true?

  A. The selling price of y is $15.
  B. The maximum demand for product x is 50 units.
  C. Product x requires twice as much labour time as Product y.
  D. Product y requires 4 machine hours to manufacture.
  D. Product y requires 4 machine hours to manufacture.

• Question 226:

  Which THREE of the following are purposes of all budgets?

  A. Co-ordination
  B. Communication
  C. Profit maximisation
  D. Diversification
  E. Authorization
  F. Consolidation
  A. Co-ordination
  B. Communication
  E. Authorization

• Question 227:

  What type of budget is prepared on an annual basis taking current year operating results and adjusting them for expected growth and inflation?

  A. Rolling budget
  B. Incremental budget
  C. Flexed budget
  D. Zero-based budget
  B. Incremental budget

• Question 228:

  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.

  Select and Place:

  

  

• Question 229:

  CORRECT TEXT

  The following extract from a decision tree has been prepared for a decision that is to be made to choose between options P, Q and R.

  

  What is the maximum expected value of profit at decision point Z?

  A. $4 million
  B. $6 million
  C. $36 million
  D. $2.4 million
  A. $4 million

• Question 230:

  In short-term decision making, which TWO of the following are relevant costs?

  A. Sunk costs
  B. Avoidable costs
  C. Committed costs
  D. Opportunity costs
  E. Notional costs
  B. Avoidable costs
  D. Opportunity costs