CIMA Management Accounting (P1) Free Practice Test
Question 1
A time series (TS) is made up of two main components i.e. trend (T) and the seasonal variation (SV).
Which TWO of the following could be used to find the seasonal component of a trend?
Which TWO of the following could be used to find the seasonal component of a trend?
Correct Answer: D,E
Question 2
A manufacturing company sells 5 different products.
The company holds no inventories and has a high level of fixed cost.
Place against the statements below the comment "needed" or "not needed" to select ALL of the information required to calcuate the total number of units to break-even.
The company holds no inventories and has a high level of fixed cost.
Place against the statements below the comment "needed" or "not needed" to select ALL of the information required to calcuate the total number of units to break-even.
Correct Answer:
Question 3
GH manufactures a product using skilled labour and high quality materials. The company operates a standard costing system and a just-in-time (JIT) purchasing and production system. The standard selling price and variable costs for one unit of the product are as follows:
Prepare a statement that reconciles the budgeted contribution with the actual contribution for October.
Your statement should show the variances in as much detail as possible.
What was the actual contribution for October?
Prepare a statement that reconciles the budgeted contribution with the actual contribution for October.
Your statement should show the variances in as much detail as possible.
What was the actual contribution for October?
Correct Answer: C
Question 4
The following information is available about direct material T for the last period.
A JIT purchasing system is in operation.
Calculate the actual price paid per kg of material T.
Give your answer to 2 decimal places.
A JIT purchasing system is in operation.
Calculate the actual price paid per kg of material T.
Give your answer to 2 decimal places.
Correct Answer:
$2.80
Question 5
A company is launching a new product.
The company accountant has constructed a payoff table to show the estimated profit at different levels of production and demand.
How many units should the company produce if the minimax regret criterion is applied?
The company accountant has constructed a payoff table to show the estimated profit at different levels of production and demand.
How many units should the company produce if the minimax regret criterion is applied?
Correct Answer: D
Question 6
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?
Which TWO of the following are relevant costs that should be included in the quotation?
Correct Answer: A,C
Question 7
The marketing director of a company is deciding which of three products to launch into a new market.
The following table of possible outcomes has been prepared.
What is the value of perfect information about market conditions?
Give your answer as a whole number to the nearest $ million.
The following table of possible outcomes has been prepared.
What is the value of perfect information about market conditions?
Give your answer as a whole number to the nearest $ million.
Correct Answer:
$12 million
Question 8
A manager must select one of three projects, W, X or Y.
The following payoff table has been prepared to show the outcomes in $000 at three possible levels of demand:
The manager is now preparing a regret matrix.
What figure (in $000) will be shown for Project Y in the regret matrix if the average demand arises?
The following payoff table has been prepared to show the outcomes in $000 at three possible levels of demand:
The manager is now preparing a regret matrix.
What figure (in $000) will be shown for Project Y in the regret matrix if the average demand arises?
Correct Answer: D
Question 9
Which THREE of the following are purposes of all budgets?
Correct Answer: A,C,F
Question 10
A master budget comprises which of the following?
Correct Answer: C
Question 11
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 marginal costing profit for the next month?
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 marginal costing profit for the next month?
Correct Answer: C