CIMA CIMA-P1 Online Practice Questions and Exam Preparation

CIMA CIMA-P1 Online Questions & Answers

• Question 71:

  DRAG DROP

  Demand for two products, A and B is 1,000 units and 2,000 units respectively. Each unit of Product A requires 8 kg of material and each unit of Product B requires 5 kg of material. The maximum availability of material is 17,200 kg.

  Contribution per unit of A is $10 and per unit of B is $9.

  Place the production volumes of Product A and Product B, that will maximize contribution, in the table.

  Select and Place:

  

  

• Question 72:

  A business wants to ensure it has the cash to pay all liabilities as they fall due. Which of the following budgets is most relevant?

  A. Master budget
  B. Operating budget
  C. Cash flow budget
  D. Sales budget
  C. Cash flow budget

• Question 73:

  Since there is no likelihood of them receiving a pay rise in the foreseeable future, your colleagues are considering leaving their current employment and starting their own business. When preparing the data to evaluate their decision, their current salaries would be:

  A. Incremental costs
  B. Opportunity costs
  C. Sunk costs
  D. Past costs
  B. Opportunity costs

• Question 74:

  A company is forecasting sales volume using time series analysis. The following equation has been derived from past data and is considered to be a reliable predictor of future sales volume:

  y = 20,000+80x

  Where y is the total sales units each quarter and x is the time period (the first quarter of year 1 is time period 1).

  

  The following set of seasonal variations for each quarter has been calculated using the additive model. What is the forecast sales units for the second quarter of year 3?

  A. 21,200
  B. 20,400
  C. 21,520
  D. 20,720
  A. 21,200

• Question 75:

  Select the benefits to a company of using sensitivity analysis in investment appraisal. (Select all the true statements.)

  

  A. Sensitivity analysis enables a company to determine the effect of changes to variables on the planned outcome.
  B. Sensitivity analysis enables a company to assess the risk associated with a project.
  C. Sensitivity analysis enables identification of fixed costs that are of special significance.
  D. Sensitivity analysis enables risk management strategies to be put in place to focus on those variables of special significance.
  A. Sensitivity analysis enables a company to determine the effect of changes to variables on the planned outcome.
  B. Sensitivity analysis enables a company to assess the risk associated with a project.
  D. Sensitivity analysis enables risk management strategies to be put in place to focus on those variables of special significance.

• Question 76:

  RST is preparing a quotation, on a relevant cost basis, for a special order.

  Which TWO of the following are relevant costs that should be included in the quotation?

  A. $2,000 disposal costs which would be saved when obsolete materials are used for the special order.
  B. The cost of a manager who is seconded from a different division to manage the special order. The manager is paid a fixed salary.
  C. Depreciation charges relating to equipment that will be used on the special order.
  D. The reduction in the resale value of machinery, due to be sold immediately, but now to be used to produce the special order.
  E. The cost of materials, as determined by the inventory system, that are currently in inventory but are used regularly on other products.
  A. $2,000 disposal costs which would be saved when obsolete materials are used for the special order.
  D. The reduction in the resale value of machinery, due to be sold immediately, but now to be used to produce the special order.

• Question 77:

  What is the effect of increasing fixed costs on the break-even point, assuming all else remains constant?

  A. Break-even point decreases
  B. Break-even point increases
  C. Break-even point stays the same
  D. It depends on variable costs
  B. Break-even point increases

• Question 78:

  A company is considering the use of Material V in a special order.

  The material is used regularly and a sufficient quantity of the material is in inventory.

  It could also be sold, at just below the current market price, to a local competitor.

  What is the relevant cost of Material V to be used in the special contract?

  A. The replacement cost of the material.
  B. The resale value of the material.
  C. The historic cost of the material in inventory.
  D. Nil
  A. The replacement cost of the material.

• Question 79:

  CORRECT TEXT

  TDM edits, prints and publishes three magazines, Mag A, Mag B and Mag

  C. The company operates an activity-based costing system.

  The following information has been obtained.

  

  What is the overhead cost attributable for each Mag A publication?

  Give your answer to the nearest whole cent.

  83 cents

• Question 80:

  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. 54.3%
  B. 45.0%
  C. 55,6%
  D. 184.0%
  A. 54.3%