Cima P1 Exam Question No 7

Question No 7:

Which of the following would cause an adverse fixed overhead volume variance?

A. Actual output was higher than budgeted
B. Actual output was lower than budgeted
C. Actual expenditure was higher than budgeted
D. Actual expenditure was lower than budgeted

Answer: B

Cima P1 Exam Question No 6

Question No 6:

What type of budget is prepared on an annual basis taking current year operating results and adjusting them for expected growth and inflation?

A. Rolling budget
B. Incremental budget
C. Flexed budget
D. Zero-based budget

Answer: B

Cima P1 Exam Question No 5

Question No 5:

N prepares budgets on an annual basis by using the budget from the previous year, and then adjusting it for growth and inflation.
This is an example of:

A. An incremental budget
B. A rolling budget
C. A flexed budget
D. Zero based budgeting

Answer: A

Cima P1 Exam Question No 4

Question No 4:

Adv. of AC

Answer:

1. Avoids excl. fixed production costs
2. Complies with IAS 2 as includes
3. Helps to price products
4. Analyis of over/under abs. may be useful for identifiying inefficient utilisation
5. Follows accrutals / matching concepts.

Cima P1 Exam Question No 3

Question No 3:

What is CVP Analysis

Answer:

Cost-Volume-Profit analysis makes use of the contribution concept in order to assess the following measures for a single product:

1. contribution to sales (C/S Ratio)
2. Breakeven Point
3. Margin of Safety

Cima P1 Exam Question No 2

Question No 2:

What is Fixed Cost?

Answer:

A cost which is incurred for an accounting period that, within a certain output or turnover limits, tends to be unaffected by fluctuations in the levels of activity (output / turnover)