CIMA CIMAPRO15-P01-X1-ENG real exam prep : P1 - Management Accounting Question Tutorial

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.
Prepare a statement which reconciles the flexed budget material cost and the actual material cost. Your statement should include the material price planning variances, and the operational variances including material price, material mix and material yield.
What was the material price planning variance for ingredient A?

• A. The Material price planning variance - Ingredient A was $72 000 F
• B. The Material price planning variance - Ingredient A was $71 000 F
• C. The Material price planning variance - Ingredient A was $73 000 F
• D. The Material price planning variance - Ingredient A was $75 000 F

THS produces two products from different combinations of the same resources. Details of the products are shown below:

Identify, using graphical linear programming, the optimal production plan for products E and R to maximize THS's profit in the month.

• A. The solution (from the graph0 is to produce 675 units of E and 470 units of R.
• B. The solution (from the graph0 is to produce 375 units of E and 870 units of R.
• C. The solution (from the graph0 is to produce 475 units of E and 770 units of R.
• D. The solution (from the graph0 is to produce 375 units of E and 750 units of R.
• E. The solution (from the graph0 is to produce 495 units of E and 470 units of R.
• F. The solution (from the graph0 is to produce 495 units of E and 670 units of R.

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.

• A. Yes, the programme should be advertised as the profit will be $82 000
• B. No, the programme should not be advertised as there will be a loss $82 000
• C. No, the programme should not be advertised as there will be a loss $92 000
• D. Yes, the programme should be advertised as the profit will be $92 000

A company has budgeted to produce 5,000 units of Product B per month. The opening and closing inventories of Product B for next month are budgeted to be 400 units and 900 units respectively. The budgeted selling price and variable production costs per unit for Product B are as follows:

Total budgeted fixed production overheads are $29,500 per month. The company absorbs fixed production overheads on the basis of the budgeted number of units produced. The budgeted profit for Product B for next month, using absorption costing, is $20,700.
Prepare a marginal costing statement which shows the budgeted profit for Product B for next month.
What was the difference between the profit calculation using marginal costing and the profit calculation using absorption costing?

• A. $2750
• B. $3610
• C. $2870
• D. $2950
• E. $3010

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:

• A. $1,780,000
• B. $1,400,000
• C. $1,300,000
• D. $1,950,000
• E. $1,390,000