Free Access CIMA.P1.v2022-02-11.q93 Practice Test (Page 2)

Question 1

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 standard variable cost per unit is $4.80.

D.The sales price variance is $756 favourable.

Question 2

Which of the following would help to explain a favourable material price variance?

A.A decision to reduce the raw materials inventory during the period led to a reduced level of material purchases.

B.An increase in the quantity of material purchased resulted in unexpected bulk discounts.

C.Improved processing methods meant that material purchases were lower than standard for the output achieved.

D.The material purchased was of a higher quality than standard.

Question 3

A tennis club is considering running an open day to encourage new members and thus increase membership fees. The cost of the open day will be $1,000. Attendance is dependent on the weather.
There is a 60% chance of good weather and a 40% chance of poor weather on the open day.
The expected new membership fees are:

What is the expected value of running the open day?
Give your answer as a whole number.

Question 4

A pharmaceutical company manufactures pesticides which contain highly toxic chemicals.
In the context of environmental costing, which of the following would be classified as an external failure cost?

A.Cost incurred in a product trial, carried out prior to product launch, as a consequence of the product failing to meet environmental standards.

B.Cost of employing an outsourcing company to dispose of toxic waste caused by a quality failure during routine production.

C.Legal cost incurred in a case relating to river pollution caused by use of the company's products in nearby fields.

D.Clean-up cost resulting from leakage of a toxic chemical at one of the company's production plants.

Question 5

Which THREE of the following would be contained within a master budget?

A.Budgeted cash flow statement

B.Sales budget

C.Directors' salaries budget

D.Budgeted income statement

E.Capital expenditure budget

F.Budgeted statement of financial position

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