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Free CIMAPRO15-P01-X1-ENG Exam Braindumps
P1 Management Accounting Questions 45–49 (page: 4)

Updated On: 31-Jan-2026
Page 4 of 15
PDF with 67 Questions

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?

  1. $ 1,324,000
  2. $ 1,414,000
  3. $ 1,594,000
  4. $ 1,494,000
  5. $ 1,198,000

Answer(s): B



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:



Calculate the following variances for October, taking account of the more detailed information regarding the labour mix:
(i) The total labour efficiency variance
(ii) The total labour mix variance
(iii) The total labour yield variance

Select the correct statements.

  1. Labour yield variance: $ 144 000 A
  2. Labour mix variance: $ 66 000 F
  3. Labour efficiency variance: $ 78 000 A
  4. Labour efficiency variance: $ 78 000 F
  5. Labour efficiency variance: $ 88 000 F
  6. Labour mix variance: $ 75 000 F
  7. Labour efficiency variance: $ 98 000 A
  8. Labour mix variance: $ 63 000 A

Answer(s): A,B,C



‘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.

  1. An incremental; approach is not as easy and fast to implement than other forms of budgeting approaches e.g. zero based budgeting.
  2. 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.
  3. 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.
  4. The main advantage of incremental budgeting is that the cost of past activities becomes fixed and any inefficiencies or wastage is perpetuated.
  5. 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.
  6. The incremental approach encourages managers in public sector organizations to look at the efficiency and effectiveness of activities undertaken.

Answer(s): B,C,E



EF manufactures and sells three products, X, Y and Z. The following production overhead costs are budgeted for next year:

Required:
Calculate the total budgeted production overhead cost for each product using activity based budgeting.

  1. The total budgeted production overhead cost was $ 1 285 000
  2. The total budgeted production overhead cost was $ 1 305 000
  3. The total budgeted production overhead cost was $ 2 195 000
  4. The total budgeted production overhead cost was $ 1 188 000
  5. The total budgeted production overhead cost was $ 1 258 000

Answer(s): D



RS is a travel company providing daily tours of a major European capital city. The market is highly competitive and RS has commissioned some market research to help with the pricing decision for a new tour. The research identified the probability of three possible market conditions and the number of tickets that would be sold each day at three different price levels.

Demonstrate, using a decision tree and based on expected value, which ticket price RS should choose.

  1. RS should charge a ticket price of $70.
  2. RS should charge a ticket price of $80.
  3. RS should charge a ticket price of $90.
  4. RS should charge a ticket price of $100.
  5. RS should charge a ticket price of $75

Answer(s): C



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