Online Access Free P1 Exam Questions

XY sells two products for which the budgeted contribution to sales ratios are as follows:

Total budgeted sales revenue is $920,000, of which $368,000 will be generated by product X. The products must be sold in a constant mix.
Budgeted fixed costs are $105,000.
What is the budgeted breakeven sales revenue?
Give your answer to the nearest $.

QR uses an activity based budgeting (ABB) system to budget product costs. It manufactures two products, product Q and product R. The budget details for these two products for the forthcoming period are as follows:

The total budgeted cost of setting up the machines is $74,400.
Select TWO potential benefits of using an activity based budgeting system.

• A.Activity based budgeting provides a clear framework for understanding the link between turnover and the level of activity.
• B.Activity based budgeting is useful for the review of quality systems utilization.
• C.Activity based budgeting allows the identification of value added and non-value added activity and ensures that any budget cuts are made to non-value added activities.
• D.Activity based budgeting allows the ranking of activities and the determination of how limited resources should be allocated across competing activities.

PQR is preparing the production budget for one of its products, the DX1, for the forthcoming year.
The following information is available:

How many units of the DX1 will need to be produced in the forthcoming year?

• A.28,775
• B.38,225
• C.31,225
• D.30,000

A company currently uses a rate of $32 per machine hour to absorb its total production overheads of
$960,000.
Using this system the production overhead cost per unit of product X is $160.
An activity based costing exercise has revealed that only $345,000 of the production overhead is driven by machine hours. The remainder is driven by the number of machine set ups, at a rate of $9.60 per set up.
Product X requires 3 set ups per unit.
Calculate the total production overhead cost per unit of product X using an activity based costing system.
Give your answer to two decimal places.

A flexible budget is a budget that is:

• A.changed in response to changes in the level of activity
• B.continuously updated by adding a further accounting period when the earliest accounting period has expired
• C.changed in response to changes in costs
• D.set prior to the control period and not subsequently changed in response to changes in activity period has expired