P1 Dumps - Kickstart your Career with Real Updated Questions [Q137-Q153]

P1 Dumps - Kickstart your Career with Real Updated Questions

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Topics of CIMA Operational CIMA P1 Accounting

The following topics are a part of CIMA P1 Accounting module.

Risk and uncertainty in the short term
Prepare budget information and assess its use for planning and control purposes
Prepare information to support short-term decision-making
Budgeting and budgetary control
Prepare information to manage working capital
Analyse performance using financial and nonfinancial information
Short term commercial decision making
Cost Accounting for decision and control
Distinguish Between The Different Rationales For Costing

Understanding function and technical aspects of Prepare information to manage working capital

The following are a part of CIMA P1 practice exams:

Identify appropriate sources of short-term finance and methods of short-term investments
Explain working capital ratios in comparison to prior periods or to other organisations
Identify the impact of changing working capital policies
Explain how to manage and control working capital

NEW QUESTION 137
The cost card for one unit of Product G is as follows:

The opening and closing inventories of Product G for month 5 are budgeted to be 10 units and 60 units respectively.
Profit for month 5 using absorption costing is budgeted to be $15,000.
What is the budgeted profit for month 5 using throughput costing?

A. $9,800
B. $20,200
C. $17,200
D. $12,800

Answer: A

NEW QUESTION 138
QR uses an activity based budgeting (ABB) system to budget product costs. It manufactures two products, product Q and product R. The budget details for these two products for the forthcoming period are as follows:

The total budgeted cost of setting up the machines is $74,400.
What was the budgeted machine set up cost per unit of product Q?

A. $0.56 per unit
B. $0.48 per unit
C. $0.39 per unit
D. $0.37 per unit

Answer: B

Explanation:
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NEW QUESTION 139
Your company want to know how many units they'd have to sell this season to break even. However, you have some reservations over whether or not breakeven analysis is suitable for the company.
Which of these assumptions over product range limit the accuracy of break even analysis? Select ALL that apply.

A. The company only sells one product
B. Fixed costs remain the same regardless of activity
C. Variable costs remain consistent at any level of production
D. The company has a variable selling ratio across all products
E. Prices and demand of products will remain steady
F. The company sells multiple products
G. The company has a consistent selling ratio across all products

Answer: A,G

NEW QUESTION 140
'Public sector organizations are often judged by their economy, efficiency and effectiveness.
Consequently, they should use an approach to budgeting other than incremental budgeting.' Required:
Explain ONE advantage and TWO disadvantages of public sector organizations using incremental budgeting.
Select all true statements.

A. Under an incremental approach to budgeting, existing operations and the current budgeted allowance for these existing activities are taken as the base level for preparing the budget.
B. Public sector organizations tend to be fairly complex and in many cases outputs cannot be measured in monetary terms therefore the link between inputs and outputs is difficult to establish. An incremental approach can therefore provide a cost effective approach to budgeting.
C. An incremental; approach is not as easy and fast to implement than other forms of budgeting approaches e.g. zero based budgeting.
D. The main advantage of incremental budgeting is that the cost of past activities becomes fixed and any inefficiencies or wastage is perpetuated.
E. The incremental approach encourages managers in public sector organizations to look at the efficiency and effectiveness of activities undertaken.
F. The incremental approach means that budget holders in public sector organizations will be encouraged to use up this year's budget will be as high as possible.

Answer: A,B,F

NEW QUESTION 141
Which of the following statements is true?

A. Standard costing is best suited to a stable environment.
B. Standard costing is focused on achieving zero defects.
C. Standard costing embraces the philosophy of continual improvement.
D. Standard costing is focused on delivering quality products to customers.

Answer: A

NEW QUESTION 142
For a company that does not have any production resource limitations, what would be the correct sequence for budget preparation?

Answer:

Explanation:

NEW QUESTION 143
A company sells three products A, B and C in a ratio of 2:2:3.
Each unit of A,B and C earns a contribution of $4.00, $2.00 and $4.00 respectively. Production fixed costs are $69,000 each month and selling fixed costs are $13,000 each month.
The company holds no inventory. The management accountant wants to know the total number of units needed to break-even. However, he is unsure about how to calculate the weighted average contribution per unit or what category of fixed cost to use.
Place the amounts given to complete the table in order to calculate the total number of units to break even.

Answer:

Explanation:

NEW QUESTION 144
Which of the statements about allocation of joint costs to products are true and which are false?

Answer:

Explanation:

NEW QUESTION 145
A healthcare company specializes in hip, knee and shoulder replacement operations, known as surgical procedures. As well as providing these surgical procedures the company offers pre operation and post operation in-patient care, in a fully equipped hospital, for those patients who will be undergoing the surgical procedures.
Surgeons are paid a fixed fee for each surgical procedure they perform and an additional amount for any follow-up consultations. Post procedure follow-up consultations are only undertaken if there are any complications in relation to the surgical procedure. There is no additional fee charged to patients for any follow up consultations. All other staff are paid annual salaries.
The company's existing costing system uses a single overhead rate, based on revenue, to charge the costs of support activities to the procedures. Concern has been raised about the inaccuracy of procedure costs and the company's accountant has initiated a project to implement an activity-based costing (ABC) system. The project team has collected the following data on each of the procedures.

Calculate the profit per procedure for each of the three procedures using activity-based costing.
What was the profit for the knee procedure, using ABC costing?

A. $781
B. $1808
C. $2466
D. $2305

Answer: C

NEW QUESTION 146
Place the components of the time series next to the example about the impact on sales that they best represent.

Answer:

Explanation:

NEW QUESTION 147
The standard output from a joint process is 4,000 litres of Product K, 6,000 litres of Product L and 3,000 litres of Product M.
The total cost of the joint process is $147,000.
The company is now deciding if it should further process Product L.
In the further processing decision the best way to apportion the joint costs to the products is:

A. it is not necessary to allocate joint costs in a further processing decision.
B. in the ratio of the sales value at the split-off point.
C. in the ratio of the sales value after further processing.
D. in the ratio of 4:6:3.

Answer: A

NEW QUESTION 148
The following 5 statements apply the principles of either, both or neither absorption costing and marginal costing.
Place the option labels against the relevant statements.

Answer:

Explanation:

NEW QUESTION 149
RT produces two products from different quantities of the same resources using a just-in-time (JIT) production system. The selling price and resource requirements of each of the products are shown below:

Market research shows that the maximum demand for products R and T during June 2010 is 500 units and 800 units respectively. This does not include an order that RT has agreed with a commercial customer for the supply of 250 units of R and 350 units of T at selling prices of $100 and $135 per unit respectively. Although the customer will accept part of the order, failure by RT to deliver the order in full by the end of June will cause RT to incur a $10,000 financial penalty. At a recent meeting of the purchasing and production managers to discuss the production plans of RT for June, the following resource restrictions for June were identified: Direct labour hours 7,500 hours Material A 8,500 kgs Material B 3,000 litres Machine hours 7,500 hours (Refer to previous 2 questions.) You have now presented your optimum production plan to the purchasing and production managers of RT. During your presentation it became clear that the predicted resource restrictions were rather optimistic. In fact, the managers agreed that the availability of all of the resources could be as much as
10% lower than their original predictions.
Assuming that RT completes the order with the commercial customer, and using linear programming, show the optimum production plan for RT for June 2010 on the basis that the availability of all resources is 10% lower than originally predicted.

A. The optimal plan is to produce 500 units of Product R and 550 units of product T in addition to the contract.
B. The optimal plan is to produce 450 units of Product R and 690 units of product T in addition to the contract.
C. The optimal plan is to produce 520 units of Product R and 620 units of product T in addition to the contract.
D. The optimal plan is to produce 560 units of Product R and 670 units of product T in addition to the contract.
E. The optimal plan is to produce 510 units of Product R and 720 units of product T in addition to the contract.
F. The optimal plan is to produce 550 units of Product R and 650 units of product T in addition to the contract.

Answer: A

NEW QUESTION 150
TP makes wedding cakes that are sold to specialist retail outlets which decorate the cakes according to the customers' specific requirements. The standard cost per unit of its most popular cake is as follows:

The general market prices at the time of purchase for Ingredient A and Ingredient B were $23 per kg and
$20 per kg respectively. TP operates a JIT purchasing system for ingredients and a JIT production system; therefore, there was no inventory during the period.
Discuss the usefulness of the planning and operational variances calculated for TP's management.
Select ALL the TRUE statements.

A. The use of planning and operational variances will enable TP's management to draw a distinction between variances caused by factors extraneous to the business and planning errors (planning variances) and variances caused by factors that are within the control of management (operational variances).
B. Standards that failed to anticipate known market trends when they were set will reflect faulty standard setting.
C. The purchasing manager's performance can't be compared with the adjusted standards that reflect the conditions the manager actually operated under during the reporting period.
D. Where a revision of standards is required due to environmental changes that were not foreseeable at the time the budget was prepared, the planning variances are controllable.
E. If planning and operational variances are not distinguished, there is potential for dysfunctional behavior especially where the manager has been operating efficiently and performance is being judged by factors outside the manager's control. In the case of TP it became evident during the period that the prevailing market prices for materials were significantly less than those set during the budget process.

Answer: A,B,E

NEW QUESTION 151
A company uses a standard costing system.
The company's sales budget for the latest period includes 1,500 units of a product with a selling price of
$400 per unit.
The product has a budgeted contribution to sales ratio of 30%.
Actual sales for the period were 1,630 units at a selling price of $390 per unit.
The actual contribution to sales ratio was 28%.
The sales volume contribution variance for the product for the latest period is:

A. $17, 800 F
B. $32, 900 F
C. $55, 600 F
D. $15, 600 F

Answer: D

NEW QUESTION 152
A company makes Product A and Product B. The production process for both products uses one type of material, one type of labour, and utilises one machine. All three of these resources will be limited in November. The company has performed a linear programming model and the constraints and optimal solution, to maximise contribution, are as follows:
Constraints:

For November, which of the above constraints are binding, and which are non-binding?