Cima how2pass p1 Exam Lab Questions by Elsie-mae q18 vce pdf

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Exam Name:	Management Accounting
Exam Code:	P1 Dumps
Vendor:	CIMA	Certification:	CIMA Operational
Questions:	260 Q&A's	Shared By:	elsie-mae

Question 8

A company is preparing its annual budget and is estimating the number of units of Product A 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:

y = a + bx where

y = number of sales units in the quarter a = 10,000 units b = 3,000 units x = the quarter number where 1 = quarter 1 of year 1

Actual sales of Product A in Year 1 were affected by seasonal variations and were as follows:

Quarter 1:14,000 units Quarter2: 18,000 units Quarter 3: 18,000 units Quarter 4: 20,000 units

Calculate the expected sales of Product A (in units) for each quarter of year 2, after adjusting for seasonal variations using the additive model.

Options:

The expected sales for year 2 Quarter 4 was 32700 units

The expected sales for year 2 Quarter 4 was 32000 units

The expected sales for year 2 Quarter 4 was 33000 units

The expected sales for year 2 Quarter 4 was 40000 units

Discussion

Question 9

A company has budgeted to produce 5,000 units of Product B per month. The opening and closing inventories of Product B for next month are budgeted to be 400 units and 900 units respectively. The budgeted selling price and variable production costs per unit for Product B are as follows:

Questions 9

Total budgeted fixed production overheads are $29,500 per month. The company absorbs fixed production overheads on the basis of the budgeted number of units produced. The budgeted profit for Product B for next month, using absorption costing, is $20,700.

Prepare a marginal costing statement which shows the budgeted profit for Product B for next month.

What was the difference between the profit calculation using marginal costing and the profit calculation using absorption costing?

Options:

$2870

$3010

$2950

$3610

$2750

Discussion

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Question 10

JRL manufactures two products from different combinations of the same resources. Unit selling prices and unit cost details for each product are as follows:

Questions 10

* Refer to your answer in the previous question.

The optimal solution to the previous question shows that the shadow prices of skilled labour and direct material A are as follows:

Skilled labour $ Nil Direct Material A $11.70

Explain the relevance of these values to the management of JRL.

Select ALL the true statements.

Options:

The shadow price equals the additional contribution that would be earned from one extra unit of a scarce resource.

In a situation such as this, where a number of resources are scarce, the shadow price of any particular scarce resource will depend on whether or not the resource is not binding.

The shadow price for skilled labour is NIL because although there is a shortage of skilled labour it does have a constraining effect on output of JR as other resources are more scarce.

Since material A is one of the binding constraints, if the availability of material A could be increased by one unit, this would change the optimal plan.

The decrease in contribution as a result of this change is the value of the shadow price of material A. The shadow price thus represents the maximum premium that should be paid for an additional unit of material A.