Free CIMAPRO15-P01-X1-ENG Exam Braindumps
P1 Management Accounting Questions 55–59 (page: 6)

A company is preparing its annual budget and is estimating the number of units of Product W that it will sell in each quarter of year 2. Past experience has shown that the trend for sales of the product is represented by the following relationship:


Calculate the expected unit sales of Product W for each quarter of year 2, after adjusting for seasonal variations using the multiplicative model.

A company produces a product that requires two materials, Material A and Material B. Details of the material quantities and costs for August are given in the table below.

Budgeted and actual output of the product for August was 12,000 units.
The material mix variance for August is:

A company produces a product that requires two materials, Material A and Material B. Details of the material quantities and costs for August are given in the table below.


Budgeted and actual output of the product for August was 12,000 units.
The material yield variance for August is:

LM operates a parcel delivery service. Last year its employees delivered 15,120 parcels and travelled 120,960 kilometers. Total costs were $194,400.
LM has estimated that 70% of its total costs are variable with activity and that 60% of these costs vary with the number of parcels and the remainder vary with the distance travelled.

LM is preparing its budget for the forthcoming year using an incremental budgeting approach and has produced the following estimates:
•All costs will be 3% higher than the previous year due to inflation
•Efficiency will remain unchanged
•A total of 18,360 parcels will be delivered and 128,800 kilometers will be travelled.

Calculate the following costs to be included in the forthcoming year’s budget:
(i) the total variable costs related to the number of parcels delivered.
(ii) the total variable costs related to the distance travelled.

A flexible budget is a budget that is: