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P1 Exam Dumps - CIMA Operational Questions and Answers

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Questions 4

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?

Options:

A.

The Material price planning variance – Ingredient A was $73 000 F

B.

The Material price planning variance – Ingredient A was $72 000 F

C.

The Material price planning variance – Ingredient A was $71 000 F

D.

The Material price planning variance – Ingredient A was $75 000 F

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Questions 5

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:

Options:

A.

$100.40

B.

$128.40

C.

$142.40

D.

$153.60

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Questions 6

Which of the following would cause an adverse fixed overhead volume variance?

Options:

A.

Actual output was higher than budgeted

B.

Actual output was lower than budgeted

C.

Actual expenditure was higher than budgeted

D.

Actual expenditure was lower than budgeted

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Questions 7

A pharmaceutical company manufactures pesticides which contain highly toxic chemicals.

In the context of environmental costing, which of the following would be classified as an external failure cost?

Options:

A.

Legal cost incurred in a case relating to river pollution caused by use of the company's products in nearby fields.

B.

Cost incurred in a product trial, carried out prior to product launch, as a consequence of the product failing to meet environmental standards.

C.

Clean-up cost resulting from leakage of a toxic chemical at one of the company's production plants.

D.

Cost of employing an outsourcing company to dispose of toxic waste caused by a quality failure during routine production.

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Exam Code: P1
Exam Name: Management Accounting
Last Update: Mar 28, 2024
Questions: 260
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