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CIMA CIMAPRO15-P01-X1-ENG Exam Syllabus Topics:
| Section | Objectives |
|---|---|
| Introduction to Management Accounting | - Cost classification and behavior - Role and purpose of management accounting |
| Short-term Decision Making | - Break-even analysis - Cost-volume-profit (CVP) analysis |
| Cost Accounting Principles | - Absorption and marginal costing - Material, labor, and overhead costing |
| Budgeting and Forecasting | - Variance analysis basics - Budget preparation techniques |
CIMA P1 - Management Accounting Question Tutorial Sample Questions:
1. EF manufactures and sells three products, X, Y and Z. The following production overhead costs are budgeted for next year:
Required:
Calculate the total budgeted production overhead cost for each product using activity based budgeting.
A) The total budgeted production overhead cost was $ 1 258 000
B) The total budgeted production overhead cost was $ 2 195 000
C) The total budgeted production overhead cost was $ 1 305 000
D) The total budgeted production overhead cost was $ 1 188 000
E) The total budgeted production overhead cost was $ 1 285 000
2. A company has to choose between three mutually exclusive projects. Market research has shown that customers could react to the projects in three different ways depending on their preferences. There is a 30% chance that customers will exhibit preferences 1, a 20% chance they will exhibit preferences 2 and a 50% chance they will exhibit preferences 3. The company uses expected value to make this type of decision.
The net present value of each of the possible outcomes is as follows:
A market research company believes it can provide perfect information about the preferences of customers in this market.
What is the maximum amount that should be paid for the information from the market research company?
A) $135 000
B) $145 000
C) $140 000
D) $125 000
3. A university is trying to decide whether or not to advertise a new post-graduate degree programme. The number of students starting the programme is dependent on economic conditions. If conditions are poor, it is expected that the programme will attract 40 students without advertising. There is a 60% chance that economic conditions will be poor. If economic conditions are good it is expected that the programme will attract only 20 students without advertising. There is a 40% chance that economic conditions will be good.
If the programme is advertised and economic conditions are poor, there is a 65% chance that the advertising will stimulate further demand and student numbers will increase to 50. If economic conditions are good, there is a 25% chance the advertising will stimulate further demand and numbers will increase to 25 students.
The profit expected, before deducting the cost of advertising, at different levels of student numbers are as follows:
The cost of advertising the programme will be $15,000.
Required:
Demonstrate, using a decision tree, whether the programme should be advertised.
A) Yes, the programme should be advertised as the profit will be $82 000
B) No, the programme should not be advertised as there will be a loss $92 000
C) No, the programme should not be advertised as there will be a loss $82 000
D) Yes, the programme should be advertised as the profit will be $92 000
4. RS is a travel company providing daily tours of a major European capital city. The market is highly competitive and RS has commissioned some market research to help with the pricing decision for a new tour. The research identified the probability of three possible market conditions and the number of tickets that would be sold each day at three different price levels.
Demonstrate, using a decision tree and based on expected value, which ticket price RS should choose.
A) RS should charge a ticket price of $100.
B) RS should charge a ticket price of $80.
C) RS should charge a ticket price of $70.
D) RS should charge a ticket price of $75
E) RS should charge a ticket price of $90.
5. A major company sells a range of electrical, clothing and homeware products through a chain of department stores. The main administration functions are provided from the company's head office. Each department store has its own warehouse which receives goods that are delivered from a central distribution center.
The company currently measures profitability by product group for each store using an absorption costing system. All overhead costs are charged to product groups based on sales revenue. Overhead costs account for approximately one-third of total costs and the directors are concerned about the arbitrary nature of the current method used to charge these costs to product groups.
A consultant has been appointed to analyses the activities that are undertaken in the department stores and to establish an activity based costing system.
The consultant has identified the following data for the latest period for each of the product groups for the X Town store:
Calculate the total profit for each of the product groups:
.... using the current absorption costing system;
A) The profit or loss in $ was.... Clothing 85; Electrical 36; Homeware (28)
B) The profit or loss in $ was.... Clothing 192; Electrical (56); Homeware 148
C) The profit or loss in $ was.... Clothing (175); Electrical 86; Homeware 22
D) The profit or loss in $ was.... Clothing 122; Electrical 56; Homeware (178)
Solutions:
| Question # 1 Answer: D | Question # 2 Answer: C | Question # 3 Answer: A | Question # 4 Answer: E | Question # 5 Answer: B |






