Online Access Free CIMAPRO19-P01-1 Practice Test

The daily demand for a perishable product has the following probability distribution:

Each unit of the product costs $6 and is sold for $10.
Unsold items are thrown away at the end of the day.
Orders must be placed each morning before the daily demand is known.
The payoff table below shows the profit that would be earned for each of the combinations of purchases and demand.
The number of units that should be purchased at the beginning of each day in order to maximize expected profit is:

A company produces trays of pre-prepared meals that are sold to restaurants and food retailers. Three varieties of meals are sold: economy, premium and deluxe.


Discuss the benefits of flexible budgeting for planning and control purposes.
Select all the true statements.

• A.Reporting against a fixed budget tells management nothing about the efficiency of operations.
• B.If sales volumes were well above budget, adverse variable cost variances will probably be reported, against the fixed budget, since more variable costs have to be incurred to support the higher level of activity.
• C.A fixed budget will provide meaningful control information when actual activity differs from budget and variable costs are significant.
• D.The fixed budget however provides more insight into actual performance.
• E.If actual sales revenue is compared to a fixed budget it is possible to tell whether a favourable sales variance is due to an increase in units sold or an increase in sales price.
• F.If a flexible budget is prepared then the budget variances calculated will provide a better indication of performance since actual results will be compared against an appropriate benchmark.

Which one of the following would NOT be included in a decision to close a division of an organization?

• A.Fixed costs directly attributable to the division
• B.Redundancy pay for employees of the division
• C.Sale of unwanted non-current assets
• D.Head office overheads absorbed on the basis of the number of units produced

The standard production cost of making a product is as follows:

What is the fixed production overhead efficiency variance?
Give your answer as a whole number.

A manufacturing company is preparing the production budget for the forthcoming year.
The following budgeted information has already been obtained:

How many units will need to be produced for the forthcoming year?
Give your answer to the nearest whole number.