CIMA CIMA-P1 Online Practice Questions and Exam Preparation

CIMA CIMA-P1 Online Questions & Answers

• Question 81:

  Which of the following statements about contribution per unit is correct?

  A. It is calculated as selling price plus variable cost
  B. It is irrelevant for break-even analysis
  C. It increases when fixed costs increase
  D. It helps in deciding the most profitable product under limiting factors
  D. It helps in deciding the most profitable product under limiting factors

• Question 82:

  A time series (TS) is made up of two main components i.e. trend (T) and the seasonal variation (SV). Which TWO of the following could be used to find the seasonal component of a trend?

  A. SV = TS - T
  B. SV = TS / T
  C. SV = TS + T
  D. SV = T / TS
  E. SV = T - TS
  A. SV = TS - T
  B. SV = TS / T

• Question 83:

  An ice cream manufacturer experiences regular fluctuations in sales. Which component in a time series do these fluctuations represent?

  A. Basic trend
  B. Cyclical variation
  C. Random fluctuation
  D. Seasonal variation
  D. Seasonal variation

• Question 84:

  CORRECT TEXT

  The marketing director of a company is deciding which of three products to launch into a new market.

  The following table of possible outcomes has been prepared.

  

  What is the value of perfect information about market conditions?

  Give your answer as a whole number to the nearest $ million.

  $12 million

• Question 85:

  A manager must choose one of three options: X, Y, or Z. Using the maximax decision criterion, which project is selected?

  A. The one with the lowest worst-case outcome
  B. The one with the highest expected value
  C. The one with the highest possible return
  D. The one with the lowest regret
  C. The one with the highest possible return

• Question 86:

  Which of the following costs would be classified as an environmental prevention cost?

  A. Cost of waste disposal fines
  B. Cost of equipment to reduce emissions
  C. Cost of recalling defective products
  D. Cost of cleaning up an oil spill
  B. Cost of equipment to reduce emissions

• Question 87:

  According to a decision tree forecasting, there are three possible outcomes of a project requiring £10,000 capital investment. They are (along with probability of occurring):

  £20,000 in revenue (45%), £35,000 (15%),

  £10,000 (30%) and -£6,000 (10%).

  However, choosing another project (2) requiring the same investment would give us £12,000 and choosing project 3 would give us a 90% chance of generating revenues of

  £15,000 but a 5% chance of revenues of £0.

  Project 4 is wildly ambitious and boasts an unlikely (5% chance) of generating revenues of £100,000. There is a 10% probability of negative revenues.

  Which is the risk averse investor more likely to take?

  A. Project 1
  B. Project 2
  C. Project 3
  D. Project 4
  B. Project 2

• Question 88:

  A company sells and services photocopying machines. Its sales department sells the machines and consumables, including ink and paper, and its service department provides an after sales service to its customers. The after sales service includes planned maintenance of the machine and repairs in the event of a machine breakdown. Service department customers are charged an amount per copy that differs depending on the size of the machine.

  The company's existing costing system uses a single overhead rate, based on total sales revenue from copy charges, to charge the cost of the Service Department's support activities to each size of machine. The Service Manager has suggested that the copy charge should more accurately reflect the costs involved. The company's accountant has decided to implement an activity-based costing system and has obtained the following information about the support activities of the service department:

  

  Calculate the annual profit per machine for each of the three sizes of machine, using the current basis for charging the costs of support activities to machines.

  A. The profit per machine for the medium machine was: $1276
  B. The profit per machine for the medium machine was: $1376
  C. The profit per machine for the medium machine was: $1350
  D. The profit per machine for the medium machine was: $1250
  A. The profit per machine for the medium machine was: $1276

• Question 89:

  Two products being produced by a company require the same material which is limited to 2,600 kgs.

  

  What is the optimal production plan?

  A. 500 units of S and 100 units of T
  B. 50 units of S and 400 units of T
  C. 400 units of S and 167 units of T
  D. 500 units of S and 400 units of T
  A. 500 units of S and 100 units of T

• Question 90:

  Petco's material price standard was £8 per kg.

  When looking over their accounts you calculate that in fact they they purchased 2,000kg at £6 per kg due to an overly abundant harvest that lowered global pet food prices.

  You have been asked by your manager to analyse these figures and come to a conclusion.

  With that in mind which of the following statements are correct? Select ALL that apply.

  A. The material price operational variance is £4,000
  B. The material price planning variance is £4,000
  C. Management had control over this variance
  D. Management had no control over this variance
  B. The material price planning variance is £4,000
  D. Management had no control over this variance