Pass the CIMA Operational P1 Questions and answers with ExamsMirror

The budgeted production of product G for the period was 300 units. At the end of the period it was discovered that the standard hourly rate for labour should have been higher than that originally planned. Actual production was 450 units.

The labour rate planning variance would be calculated as:

FGH used to manufacture components that required raw material Q.

Currently there are 80 kg of material Q in inventory.

The company has no use for the material in the foreseeable future and intends to sell it for scrap.

A potential new customer has asked for a price for a large order.

This order would require 100 kg of material Q.

The company management has decided to quote a price for this work on a relevant cost basis.

Details of costs for material Q are as follows:

What would be the relevant cost of Material Q to use in this order?

A company is launching a new product with a selling price of $20.

Demand and variable cost are both uncertain and possible demand levels and variable costs are given below:

Outcomes for demand and variable cost are independent.

What is the expected contribution from the product?

Give your answer as a whole number.

A master budget comprises the...

You are a trainee management accountant working for a prestigious manufacturing firm. One day you go to a business meeting a business meeting and the managing director is there. They stand up and say that the

company is losing too much money through wastage and losses and so they have decided to implement a total quality management system. They go on to say this system will:

1:Allow the company to improve on a consistent and continual basis

2:Allow the company to identify and allocate quality accountability to certain departments

3:Help the company detect error and fraud

Are ALL of these statements correct?

A company manufactures two products and has two production constraints.

When the graphical approach to linear programming is used, the axes of the graph will show:

A company’s budget for the next period shows that it would breakeven at sales revenue of $800,000 and fixed costs of $320,000.

The sales revenue needed to achieve a profit of $200,000 in the next period would be:

XY, a not-for-profit charity organization which is funded by public donations, is concerned that it is not making the best use of its available funds. It has carried out a review of its budgeting system and is considering replacing the current system with a zero-based budgeting system.

Select ALL the potential advantages AND disadvantages for the charity of a zero-based budgeting system.

Where sales volume is the principal budget factor, which of the following is the correct order in which budgets have to be prepared?

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.