Free CIMAPRO19-P01-1 Exam Braindumps
P1 Management Accounting Questions 61–65 (page: 14)

Which of the following explain why standard costing is less appropriate in the contemporary business environment?

1. In a continuous improvement environment standard costing can restrict the impetus to remain as cost competitive as rivals.

2. Fixed overhead variances are less relevant as fixed costs represent a decreasing proportion of total manufacturing cost.

3. In a just-in-time environment there are fewer costs to control.

A pharmaceutical company manufactures pesticides which contain highly toxic chemicals.

In the context of environmental costing, which of the following would be classified as an external failure cost?

XY can choose from four mutually exclusive projects. The projects will each last for one year and their net cash inflows will be determined by market conditions. The forecast net cash inflows for each of the possible outcomes are shown below.



If the company applies the maximax criterion the project chosen would be:

A special contract requires 640 units of component T.

The inventory of 280 units of component T cost $0.20 per unit but the component is not currently used by the company.

The current market price of component T is $0.24 per unit but the inventory could be sold

for $0.15 per unit.

The relevant cost of the units of component T required for the special contract is:

You are a management accounting working for a car manufacturer. The company is publicly listed and has been around for many years.

The company produces 2 products. Car 1 and Car 2. Car 1 sells for £20,000 and Car 2 for £27,000.

Car 1 can be upgraded post production to the 1ZC model for £5,000 and Car 2 to the 2ZC model for £3,500.

Post production upgrade the 1ZC sells for £25,500 and the 2ZCfor £30,000.

The company sources all of its supplies for the same supplier and has access to a large workforce. As a result there are no bottlenecks or limiting factors to production.

Based on the information above the company should...