CIMA CIMA-P1 Online Practice Questions and Exam Preparation

CIMA CIMA-P1 Online Questions & Answers

• Question 271:

  Which of the following statements about activity-based costing (ABC) is correct?

  A. It assigns overheads based only on machine hours
  B. It ignores the cost of unused capacity
  C. It provides more accurate cost information than traditional methods
  D. It is only applicable to service industries
  C. It provides more accurate cost information than traditional methods

• Question 272:

  CORRECT TEXT

  A manufacturing company is preparing the production budget for the forthcoming year.

  The following budgeted information has already been obtained:

  

  How many units will need to be produced for the forthcoming year?

  Give your answer to the nearest whole number.

  22639

• Question 273:

  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?

  A. 150
  B. 110
  C. 520
  D. 160
  A. 150

• Question 274:

  A master budget comprises the...

  A. budgeted income statement and budgeted cash flow statement only.
  B. budgeted income statement and budgeted balance sheet only.
  C. budgeted income statement and budgeted capital expenditure only
  D. budgeted income statement, budgeted balance sheet and budgeted cash flow statement only.
  D. budgeted income statement, budgeted balance sheet and budgeted cash flow statement only.

• Question 275:

  A university is trying to decide whether or not to advertise a new post-graduate degree programme. The number of students starting the programme is dependent on economic conditions. If conditions are poor, it is expected that the programme will attract 40 students without advertising. There is a 60% chance that economic conditions will be poor. If economic conditions are good it is expected that the programme will attract only 20 students without advertising. There is a 40% chance that economic conditions will be good.

  If the programme is advertised and economic conditions are poor, there is a 65% chance that the advertising will stimulate further demand and student numbers will increase to 50. If economic conditions are good, there is a 25% chance the advertising will stimulate further demand and numbers will increase to 25 students.

  The profit expected, before deducting the cost of advertising, at different levels of student numbers are as follows:

  

  The cost of advertising the programme will be $15,000.

  Required:

  Demonstrate, using a decision tree, whether the programme should be advertised.

  A. Yes, the programme should be advertised as the profit will be $82 000
  B. Yes, the programme should be advertised as the profit will be $92 000
  C. No, the programme should not be advertised as there will be a loss $82 000
  D. No, the programme should not be advertised as there will be a loss $92 000
  A. Yes, the programme should be advertised as the profit will be $82 000