Cima P1 Exam Question No 33

Question No 33:

The economic order quantity (EOQ) for this model of calculator will be:

A. 2,438 units
B. 771 units
C. 67 units
D. 2,060 units

Answer: A

Cima P1 Exam Question No 32

Question No 32:

FP has decided not to use the EOQ and has decided to order 2,600 calculators each time an order is placed. The total ordering and holding costs per annum will be?

A. $5,240
B. $19,800
C. $208,014
D. $3,420

Answer: C

Cima P1 Exam Question No 31

Question No 31:

The term ‘budgetary slack’ refers to the?

A. Lead time between the preparation of the functional budgets and the approval of the master budget by senior management
B. Difference between the budgeted output and the actual output
C. Difference between budgeted capacity utilisation and full capacity
D. Intentional over estimation of costs and/or under estimation of revenue in a budget

Answer: D

Cima P1 Exam Question No 30

Question No 30:

The estimated total costs for an output of 205,000 units is:

A. $2,870,000
B. $3,050,000
C. $3,064,211
D. $3,080,857

Answer: C

Chichester College’s principal appointed deputy lieutenant for West Sussex

TThe main Chichester College was appointed Deputy Lieutenant of West Sussex this week.

Legrave Shelagh, who lives in Midhurst and served as President and CEO of the company since 2010, was awarded the OBE for services to higher education in the Birthday Honours Queen earlier this year .

She is one of the three persons to be appointed to the post in ceremony recognizing distinguished service to the community by the Lord Lieutenant Susan Pyper services this week.

The position may include representing the Lord Lieutenant at official functions, award ceremonies, citizenship ceremonies or attend Remembrance Day services.

Shelagh said: "It's an absolute honor to be appointed Deputy Lieutenant of West Sussex am very willing to help the Lord Lieutenant in office.".

Before becoming chief Shelagh was COO at school since April 2003 and has led to an exceptional content in its latest Ofsted inspection in 2014.

After a degree in history and theology at the University of Durham, Shelagh spent six years as an officer in the Royal Corps of Army women.

She is a qualified accountant and member of the Chartered Institute of Management Accountants.

He chairs the trustees of Stonepillow, a charity to help the homeless in Chichester and is on the boards of Chichester Festival Theatre, Capital Coast Association for Local Business and Betty Martin Charity, and has barely resumed as President the Board of Directors Bourne Community College where she is also an administrator. His interests include running, tennis and music.

Cima P1 Exam Question No 29

Question No 29:

The company has now established that there is a stepped increase in fixed costs of $30,000 when output reaches 180,000 units.
The estimate of total costs for an output of 175,000 units using the additional information is:

A. $2,645,000
B. $2,275,000
C. $2,615,000
D. $2,630,000

Answer: C

Cima P1 Exam Question No 28

Question No 28:

RS is a retailer of pet products. A dog basket that it sells has an annual demand of 15,000 units. Demand is spread evenly throughout the year.
RS pays its supplier $60 for each basket. Ordering costs are $150 per order and the annual cost of holding one basket in inventory is estimated to be $6.
The economic order quantity (EOQ) for the dog basket to the nearest unit is:

A. 612 units
B. 173 units
C. 866 units
D. 1,025 units

Answer: C

Cima P1 Exam Question No 27

Question No 27:

AB is preparing its cash budget for next year. The accounts receivable at the beginning of next year are expected to be $460,000. The budgeted sales are $5,400,000 and will occur evenly throughout the year. 80% of the budgeted sales will be on credit and the remainder will be cash sales. Credit customers pay in the month following sale.
The budgeted cash receipts from customers next year are:

A. $5,040,000
B. $5,410,000
C. $5,500,000
D. $4,420,000

Answer: C

Cima P1 Exam Question No 26

Question No 26:

JK has budgeted sales for next year of 24,000 units and inventory levels are expected to remain constant throughout the year. Each unit produced will require 3 labour hours and the budgeted labour rate will be $15 per hour. It is estimated that 10% of units produced will be wasted.
It is expected that 15% of the total hours worked will be paid at overtime rates. 10% of the total hours will be paid at the basic rate plus an overtime premium of 50% of the basic rate. 5% of the total hours will be paid at the basic rate plus an overtime premium of 100% of the basic rate.
The labour cost budget for next year is:

A. $ 1,350,000
B. $ 1,306,800
C. $ 1,188,000
D. $ 1,320,000

Answer: D

Cima P1 Exam Question No 25

Question No 25:

The material yield variance for August is?

A. $200 Adverse
B. $1,740 Adverse
C. $200 Favourable
D. $1,740 Favourable

Answer: B

Cima P1 Exam Question No 24

Question No 24:

The budgeted machine set-up cost per unit of Product S is:

A. $150
B. $1.80
C. $1.50
D. $30

Answer: B

Cima P1 Exam Question No 23

Question No 23:

A five year investment project has a positive net present value of $320,000 when discounted at the cost of capital of 10% per annum. The project includes annual net cash inflows of $100,000 which occur at the end of each of the five years.
The percentage reduction in the annual net cash inflow that would result in the project not being financially viable is:

A. 31.25%
B. 118.5%
C. 84.4%
D. 18.5%

Answer: C

Cima P1 Exam Question No 22

Question No 22:

A company commenced business on 1 August. Total sales revenue in August was $200,000 and is expected to increase at a rate of 2% per month. Credit sales represent 60% of total sales revenue and the remaining 40% is cash sales. The credit period allowed is one month. Bad debts are expected to be 3% of credit sales but the remaining credit sales customers are expected to pay on time.
The estimated receipts in September from cash and credit sales are:

A. $195,552
B. $196,400
C. $198,000
D. $201,600

Answer: C

Cima P1 Exam Question No 21

Question No 21:

A company is considering investing in a project with an expected life of four years. The project has a positive net present value of $280,000 when cash flows are discounted at 12% per annum. The project’s estimated cash flows include net cash inflows of $320,000 for each of the four years. No tax is payable on projects of this type.
The percentage decrease in the estimated annual net cash inflows that would cause the company’s management to reject the project from a financial perspective is, to the nearest 0.1%:

A. 87.5%
B. 21.9%
C. 3.5%
D. 28.8%

Answer: D

Cima P1 Exam Question No 20

Question No 20:

An investment project requires an initial investment of $500,000 and has a residual value of $130,000 at the end of five years. The net present value of the project is $140,500 after discounting at the company’s cost of capital of 12% per annum.
The profitability index of the project is:

A. 0.38
B. 0.54
C. 0.28
D. 0.26

Answer: C

Cima P1 Exam Question No 19

Question No 19:

In finance, a bond is described as?

A. A negotiable instrument offering a fixed rate of interest over a fixed period of time and with a fixed redemption value.
B. A negotiable instrument which provides evidence of a fixed term deposit with a bank. Maturity is normally within 90 days but can be longer.
C. A document which sets out a commitment to pay a sum of money at a specified point in time.
D. An unsecured short term loan note issued by companies and generally maturing within a period of up to one year.

Answer: A

Cima P1 Exam Question No 18

Question No 18:

The material yield variance for August is:

A. $200 Adverse
B. $1,740 Adverse
C. $200 Favorable
D. $1,740 Favorable

Answer: B

Cima P1 Exam Question No 17

Question No 17:

BC had trade receivables of $242,000 at the start of the year. BC forecasts that the sales revenue for the year will be $1,500,000. All sales are on credit.
Trade receivable days at the end of the year are expected to be 60 days based on a 365 day year.
The expected receipts from customers during the year are closest to:

A. $1,495,425
B. $1,742,000
C. $1,253,425
D. $1,504,575

Answer: A

Cima P1 Exam Question No 16

Question No 16:

A company is considering offering its customers an early settlement discount. The company currently receives payments from customers on average 65 days after the invoice date. The company is considering offering a 2% early settlement discount for payment within 30 days of the invoice date.
The effective annual interest rate of the early settlement discount using compound interest methodology and assuming a 365 day year is:

A. 22.94%
B. 20.86%
C. 23.45%
D. 27.85%

Answer: C

Cima P1 Exam Question No 15

Question No 15:

AB is preparing its cash budget for the next quarter.
Which of the following items should NOT be included in the cash budget?

A. Payment of tax due on last year’s profits
B. Gain on the disposal of a piece of machinery
C. Repayment of the capital amount of a loan
D. Receipt of interest from short term investments

Answer: B

Cima P1 Exam Question No 14

Question No 14:

When using absorption costing method, what should you focus on?
When using absorption costing to determine the cost per unit, we focus on the production costs only. These costs can be summarized into a cost card:

Direct Materials per unit X
Direct Labour per unit X
Production overhead per unit X
_______________________________
Full production cost per unit X

Cima P1 Exam Question No 13

Question No 13:

What is the aim of traditional absorption costing?

The aim of traditional absorption costing is to determine the full production cost per unit.

Cima P1 Exam Question No 12

Question No 12:

State whether the following costs are relevant or non-relevant in the context of short-term decision making scenarios.







Answer: