Cima P1 Questions Answers

1
Cima P1 Management Accounting exam in just 24
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• Question No 1
• In short-term decision making, which TWO of the
  following are relevant costs?
• Sunk costs
• Avoidable costs
• Committed costs
• Opportunity costs
• Notional costs
• Answer B, D Question No 2
• Which of the following are examples of
  feedforward control? Select ALL that apply.
• Labour costs for individual jobs are forecast.
  The forecasts are used as the basis to determine
  the correct selling price to be quoted to the
  customer.
• The sales volume for the next quarter is forecast
  and compared with the planned volume. If there
  is a forecast shortfall action is taken to
  correct the difference.
• A target is set for the cash balance at the
  period end. The balance shown in the cash
  forecast is compared with the target and action
  is taken to ensure that the target balance is
  achieved.
• Actual inventory volumes are compared with
  planned volumes and control action is taken to
  correct any differences.
• Answer B, C Question No 3
• Since there is no likelihood of them receiving a
  pay rise in the foreseeable future, your
  colleagues are considering leaving their current
  employment and starting their own business. When
  preparing the data to evaluate their decision,
  their current salaries would be
• Incremental costs
• Opportunity costs
• Sunk costs
• Past costs

3

• Question No 4
• A company develops computer software programs to
  meet each client's specific requirements. The
  management accountant is considering introducing
  a standard costing system. Which THREE of the
  following are reasons that support the case for
  the company's introduction of a standard costing
  system?
• It will enable the company to make a direct
  comparison of costs for each program developed.
• It will enable the company to better focus on the
  quality of its service.
• It will provide a system of control.
• It will aid the budget setting process.
• It will simplify the work-in-progress valuation.
• Answer C, D, E Question No 5
• 8fb9be1c-b0d5-4acb-8cfb-f4b4426e641B. The primary
  objective of Company A is to maximise 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
• Answer B Question No 6
• A company is bidding to win a special contract.
  Which of the following is NOT a relevant cost to
  the company of undertaking the contract?
• The purchase cost of direct materials not
  currently in inventory.
• The cost of hiring a machine which will be hired
  if the contract is won.
• The cost of a training course for staff which
  will be undertaken if the contract is won.
• The depreciation charge on the tools which will
  be used during the contract.
• Answer D

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• Question No 7
• Which of the following managers is most likely to
  be responsible for an favourable labour
  efficiency variance?
• Production Manager
• Purchasing Manager
• Human Resources Manager
• Marketing Manager
• Answer A Question No 8
• Which of the following distinguishes risk from
  uncertainty?
• Risk can be quantified whereas uncertainty
  cannot.
• Risk can have both upside and downside whereas
  uncertainty is always downside.
• Risk should be taken into account in decision
  making whereas uncertainty should not.
• Risk is relevant to financial decisions whereas
  uncertainty is relevant to non-financial.
• Answer A Question No 9
• The simplex method has been used to determine the
  optimum output of products P, Q, R and S with
  constraints on resources J, K and L. In the final
  simplex tableau, the figure in the product R row
  and the column for slack variable K is 80. Which
  of the following statements is correct?
• For each additional unit of resource K available,
  the contribution would increase by 80.
• For each additional unit of resource K available,
  the output of product R would increase by 80
  units.
• For each additional unit of product R produced,
  80 additional units of resource K would be
  required.
• In the optimum solution, 80 units of resource K
  are unused.
• Answer B

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