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Free CIMAPRO19-P01-1 Exam Braindumps
P1 Management Accounting Questions 91–95 (page: 20)

Updated On: 9-Feb-2026
Page 20 of 53
PDF with 260 Questions

A company is bidding to win a special contract.

Which of the following is NOT a relevant cost to the company of undertaking the contract?

  1. The purchase cost of direct materials not currently in inventory.
  2. The cost of hiring a machine which will be hired if the contract is won.
  3. The cost of a training course for staff which will be undertaken if the contract is won.
  4. The depreciation charge on the tools which will be used during the contract.

Answer(s): D



TP makes wedding cakes that are sold to specialist retail outlets which decorate the cakes according to the customers' specific requirements. The standard cost per unit of its most popular cake is as follows:



The general market prices at the time of purchase for Ingredient A and Ingredient B were $23 per kg and $20 per kg respectively.

TP operates a JIT purchasing system for ingredients and a JIT production system; therefore, there was no inventory during the period.

Prepare a statement which reconciles the flexed budget material cost and the actual material cost. Your statement should include the material price planning variances, and the operational variances including material price, material mix and material yield.

What was the material price planning variance for ingredient A?

  1. The Material price planning variance ­ Ingredient A was $73 000 F
  2. The Material price planning variance ­ Ingredient A was $72 000 F
  3. The Material price planning variance ­ Ingredient A was $71 000 F
  4. The Material price planning variance ­ Ingredient A was $75 000 F

Answer(s): B



The cost card for one unit of Product G is as follows:



The opening and closing inventories of Product G for month 5 are budgeted to be 10 units and 60 units respectively.

Profit for month 5 using absorption costing is budgeted to be $15,000.

What is the budgeted profit for month 5 using throughput costing?

  1. $9,800
  2. $12,800
  3. $17,200
  4. $20,200

Answer(s): A



`A zero-based budgeting system involves establishing decision packages that are then ranked in order of their relative importance in meeting the organization's objectives'.

Which of the following is true regarding he difficulties that a not-for-profit organization may experience when trying to rank decision packages.

Select ALL true statements.

  1. The activities that are being proposed in a budget are described in variable packages. There will often be more less than one decision package proposed for an activity.
  2. The activities that are being proposed in a budget are described in decision packages. There will often be more than one decision package proposed for an activity.
  3. Some of these packages will be inclusive and will require operations to select the best solution to the issue involved.
  4. Some of these packages will be mutually inclusive and will require management to select the best solution to the issue involved.
  5. Each decision package is evaluated. Its costs are compared to its benefits and net present values or other measures calculated.
  6. Management may decide to reject packages even though the activity was done last year. In this way the organization is said to be starting from a zero base with each package given due consideration.
  7. Management may decide to accept packages even though the activity was done last year. In this way the organization is said to be starting from a 100% cost base with each package given due consideration.
  8. In a public sector body, for example, decision packages will relate profit making activities.
  9. In a public sector body, for example, decision packages will relate to very disparate activities.

Answer(s): B,D,E,F,I



Explain THREE benefits that organizations gain from using budgetary planning and control systems.

Select ALL the true statements.

  1. The budget acts as a variable mechanism, with actual results being compared with budget.
  2. Budgeting forces an organization's management to look ahead and set performance targets.
  3. The budget provides an external benchmark against which performance against which performance can be evaluated.
  4. The budget ensures actions of different parts of the organization are coordinated are reconciled otherwise managers take actions for the benefit of their own part of organization that may not benefit the organization as a whole.
  5. Another benefit of budgeting is to set targets to motivate managers and optimize their performance.
  6. The budget is a useful device of influencing an operator's thoughts and motivating operators to perform in line with the organization's marketing budget.
  7. It provides a standard which managers may be motivated to achieve. It can also encourage inefficiency and conflict between managers particularly if the budget is imposed from above, whereby it may act as a threat rather than as a challenge.

Answer(s): B,D,E,G



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