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Cima P1 Management Accounting exam in just 24 HOURS!
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2. Answer: B, D Question No 2:
In short-term decision making, which TWO of the following are relevant costs?
Sunk costs
Avoidable costs
Committed costs
Opportunity costs
Notional costs
Answer: B, D Question No 2:
Which of the following are examples of feedforward control? Select ALL that apply.
Labour costs for individual jobs are forecast. The forecasts are used as the basis to determine the correct selling price to be quoted to the customer.
The sales volume for the next quarter is forecast and compared with the planned volume. If there is a forecast shortfall action is taken to correct the difference.
A target is set for the cash balance at the period end. The balance shown in the cash forecast is compared with the target and action is taken to ensure that the target balance is achieved.
Actual inventory volumes are compared with planned volumes and control action is taken to correct any differences.
Answer: B, C Question No 3:
Since there is no likelihood of them receiving a pay rise in the foreseeable future, your colleagues are considering leaving their current employment and starting their own business. When preparing the data to evaluate their decision, their current salaries would be:
Incremental costs
Past costs
Answer: B

3. Answer: C, D, E Question No 5:
A company develops computer software programs to meet each client's specific requirements. The management accountant is considering introducing a standard costing system. Which THREE of the following are reasons that support the case for the company's introduction of a standard costing system?
It will enable the company to make a direct comparison of costs for each program developed.
It will enable the company to better focus on the quality of its service.
It will provide a system of control.
It will aid the budget setting process.
It will simplify the work-in-progress valuation.
Answer: C, D, E Question No 5:
8fb9be1c-b0d5-4acb-8cfb-f4b4426e641B. The primary objective of Company A is to maximise profit. It is now deciding on the optimum production mix for the next period and has one limited production resource.
The production mix decision should be based on:
Answer: B Question No 6:
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?
The purchase cost of direct materials not currently in inventory.
The cost of hiring a machine which will be hired if the contract is won.
The cost of a training course for staff which will be undertaken if the contract is won.
The depreciation charge on the tools which will be used during the contract.
Answer: D

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Question No 7:
Which of the following managers is most likely to be responsible for an favourable labour efficiency variance?
Production Manager
Purchasing Manager
Human Resources Manager
Marketing Manager
Answer: A Question No 8:
Which of the following distinguishes risk from uncertainty?
Risk can be quantified whereas uncertainty cannot.
Risk can have both upside and downside whereas uncertainty is always downside.
Risk should be taken into account in decision making whereas uncertainty should not.
Risk is relevant to financial decisions whereas uncertainty is relevant to non-financial.
Answer: A Question No 9:
The simplex method has been used to determine the optimum output of products P, Q, R and S with constraints on resources J, K and L. In the final simplex tableau, the figure in the product R row and the column for slack variable K is 80. Which of the following statements is correct?
For each additional unit of resource K available, the contribution would increase by $80.
For each additional unit of resource K available, the output of product R would increase by 80 units.
For each additional unit of product R produced, 80 additional units of resource K would be required.
In the optimum solution, 80 units of resource K are unused.
Answer: B
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