Online Access Free CIMAPRO19-P01-1 Exam Questions

A company has only 10,100 hours of skilled labour available next period.
Data for its three products for next period are as follows.

At least 500 units of each product must be sold each period.
No inventories are held.
How many units of Product X should be manufactured next period in order to maximise profit?

'Public sector organizations are often judged by their economy, efficiency and effectiveness.
Consequently, they should use an approach to budgeting other than incremental budgeting.' Required:
Explain ONE advantage and TWO disadvantages of public sector organizations using incremental budgeting.
Select all true statements.

• A.An incremental; approach is not as easy and fast to implement than other forms of budgeting approaches e.g. zero based budgeting.
• B.The incremental approach means that budget holders in public sector organizations will be encouraged to use up this year's budget will be as high as possible.
• C.Public sector organizations tend to be fairly complex and in many cases outputs cannot be measured in monetary terms therefore the link between inputs and outputs is difficult to establish. An incremental approach can therefore provide a cost effective approach to budgeting.
• D.Under an incremental approach to budgeting, existing operations and the current budgeted allowance for these existing activities are taken as the base level for preparing the budget.
• E.The incremental approach encourages managers in public sector organizations to look at the efficiency and effectiveness of activities undertaken.
• F.The main advantage of incremental budgeting is that the cost of past activities becomes fixed and any inefficiencies or wastage is perpetuated.

A budgetary control report for the latest period is shown below:

Which TWO of the following statements are correct?

• A.The sales volume contribution variance is $1,008 adverse.
• B.The sales volume contribution variance is $216 favourable.
• C.The sales price variance is $756 favourable.
• D.The standard variable cost per unit is $4.80.

Which of the following is a definition of a rolling budget?

• A.A budget which changes in response to uncontrollable events.
• B.A budget that adjusts for changes in the volume of activity as they occur through the budget year.
• C.A budget that uses the current year budget as the basis for the next year budget.
• D.A budget that is continuously updated by adding a further accounting period (month or quarter) when the earliest accounting period has expired.

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:

• A.Past costs
• B.Sunk costs
• C.Opportunity costs
• D.Incremental costs