CIMA CIMAPRO19-P01-1 Exam Practice Test Instant Access

Question 1

A manager has to decide between four mutually exclusive projects, A, B, C and D:

Using the above information, which Project would a risk seeking manager choose?

AProject A

BProject B

CProject C

DProject D

Answer : D

Question 2

The daily demand for a perishable product has the following probability distribution:

Each unit of the product costs $6 and is sold for $10.

Unsold items are thrown away at the end of the day.

Orders must be placed each morning before the daily demand is known.

The payoff table below shows the profit that would be earned for each of the combinations of purchases and demand.

The number of units that should be purchased at the beginning of each day in order to maximize expected profit is:

See Below Explanation:

Answer : A

Question 3

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.

BThe cost of a manager who is seconded from a different division to manage the special order. The manager is paid a fixed salary.

CDepreciation charges relating to equipment that will be used on the special order.

DThe reduction in the resale value of machinery, due to be sold immediately, but now to be used to produce the special order.

EThe cost of materials, as determined by the inventory system, that are currently in inventory but are used regularly on other products.

Answer : A, D

Question 4

A special contract requires 640 units of component T.

The inventory of 280 units of component T cost $0.20 per unit but the component is not currently used by the company.

The current market price of component T is $0.24 per unit but the inventory could be sold for $0.15 per unit.

The relevant cost of the units of component T required for the special contract is:

A$100.40

B$128.40

C$142.40

D$153.60

Answer : B

Question 5

The breakeven point in units, in a multiple product context, is calculated using which of the following formulae?

AFixed costs / weighted average contribution to sales ratio

BFixed costs / weighted average profit per unit

CFixed costs / weighted average contribution per unit

DFixed costs / weighted average revenue per unit

Answer : C

Question 6

8fb9be1c-b0d5-4acb-8cfb-f4b4426e641B. The primary objective of Company A is to maximize profit. It is now deciding on the optimum production mix for the next period and has one limited production resource.

The production mix decision should be based on:

AMinor or majorchangesinproduct mix

BDeveloping New Uses of Existing Products

Answer : B

Question 7

A manufacturing company has more units of finished goods inventory at the end of a period than at the beginning of the period.

Which of the following statements is true?

AProfit is higher and opening inventory valuation is higher using marginal costing than if throughput costing is used.

BProfit is higher and opening inventory valuation is lower using marginal costing than if throughput costing is used.

CProfit is higher and opening inventory valuation is lower using absorption costing than if marginal costing is used.

DProfit is lower and opening inventory valuation is higher using marginal costing than if throughput costing is used.

Answer : A

CIMAPRO19-P01-1 P1 Management Accounting Exam Practice Test