Free CIMAPRO19-P01-1 Exam Braindumps
P1 Management Accounting Questions 51–55 (page: 12)

A company is basing its budget on predicted sales of one of its products. They have tasked you with forecasting the sales in year 2. The company has found that a fairly accurate prediction can be found when the trend

is calculated like so:

a = 10,000

b = 2,000

The sales of year 1 were affected by seasonal variation and were as follows:

Q1:12,500

Q2:14,200

Q 3:15,400

Q 4:19,650

You use a multiplicative model and round percentages to the nearest whole percent.

Select ALL the correct quarterly forecasts of year 2 from the list.

Forecast sales demand of product W next period is 6,800 units. Product W requires 5 kg of material Y, seven hours of skilled labour and six hours of semi-skilled labour.

Availability of resources for next period is forecast as follows:



No inventories are held.

What is the principal budget factor for next period?

Explain how probability analysis could be used to assess the risk of the evaluated projects.

Select all the true statements.

Which of the following is a definition of a rolling budget?

CORRECT TEXT
According to a decision tree forecasting, there are three possible outcomes of a project requiring £10,000 capital investment. They are (along with probability of occurring):
£20,000 in revenue (45%), £35,000 (15%),

£10,000 (30%) and -£6,000 (10%).

However, choosing another project (2) requiring the same investment would give us £12,000 and choosing project 3 would give us a 90% chance of generating revenues of £15,000 but a 5% chance of revenues of £0.

Project 4 is wildly ambitious and boasts an unlikely (5% chance) of generating revenues of £100,000. There is a 10% probability of negative revenues.

Which is the risk averse investor more likely to take?