CIMA CIMAPRO19-P01-1 Exam Questions Instant Access

Question 1

A company manufactures three products X, Y and Z.

The company is currently operating at full capacity and is unable to meet the full sales demand for Product Z.

According to the latest management accounts, Product Y is loss making, whilst X and Z both make strong positive contributions.

Which of the following is relevant when making a decision on whether or not to discontinue the manufacture of Product Y?

AThe salary of the sales manager who deals with all three products.

BThe rent and rates of the factory used to make the three products.

CThe contribution from additional sales of Product Z.

DThe cost of market research carried out last month to establish if sales of Product Y are likely to improve.

Answer : C

Question 2

The fixed production overhead volume variance is:

A$10,500 F

B$3,500 A

C$10,500 A

D$7,000 A

Answer : C

Question 3

Information about a company's only two products is as follows:

The revenue from the products must be in the constant mix of 2U:3V. Budgeted monthly sales revenue is $110,000.

Fixed costs are $23,095 each month.

To the nearest $10, what is the budgeted monthly margin of safety in terms of sales revenue?

A$35,500

B$74,500

C$12,140

D$38,940

Answer : A

Question 4

A company manufactures a single product. The company absorbs fixed production overhead using a pre-determined rate per unit.

The following data applies for month 7:

During month 7 fixed production overhead was over absorbed by $40,000.

What was the actual number of units produced during month 7?

A16,000

B14,000

C8,000

D6,000

Answer : A

Question 5

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:

AThe revised standard cost of 450 units compared with the original standard cost of 450 units

BThe revised standard cost of 300 units compared with the orginal standard cost of 300 units

CThe revised standard cost of 450 units compared with the original standard cost of 300 units

DThe revised standard cost of 300 units compared with the original standard cost of 450 units

Answer : A

Question 6

Which of the following is a definition of a rolling budget?

AA budget that is continuously updated by adding a further accounting period (month or quarter) when the earliest accounting period has expired.

BA budget that adjusts for changes in the volume of activity as they occur through the budget year.

CA budget that uses the current year budget as the basis for the next year budget.

DA budget which changes in response to uncontrollable events.

Answer : A

Question 7

A company manufactures a single product and absorbs fixed production overheads at a predetermined rate based on budgeted expenditure and budgeted units.

Which TWO of the following would definitely lead to an over absorption of fixed production overheads?

AThe actual number of units produced are greater than budgeted and the actual fixed production overhead expenditure is as budgeted.

BThe actual number of units produced are less than budgeted and the actual fixed production overhead expenditure is higher than budgeted.

CActual number of units produced are greater than actual units sold and the actual fixed production overhead expenditure is as budgeted.

DActual fixed production overhead expenditure is higher than budgeted and production units are as budgeted.

EActual fixed production overhead expenditure is less than budgeted and production units are as budgeted.

Answer : A, E

CIMA P1 Management Accounting CIMAPRO19-P01-1 Exam Questions