Free Access CIMA.P1.v2022-09-21.q95 Practice Test (Page 13)

Question 56

Christian the management accountant at a car manufacturer has been given a list of costs that have been incurred due to accidents and errors either occurring or being prevented.
Which of the following are examples of non-conformance costs? Select ALL that apply.

A.Cost of repairs to products

B.Cost of repairs to equipment

C.Cost of scrap

D.Loss of goodwill

E.Inspection costs

Question 57

Which of the following statements about total quality management are incorrect? Select ALL that apply.

A.The costs of conformance are more important than the costs of non-conformance.

B.All costs relating to quality should be examined, particularly those relating to failure costs.

C.The organisation should rely on inspection to achieve quality standards.

D.There is an acceptable quality level that an organisation must try to achieve.

E.The culture of an organisation should be to get things right the first time.

F.Everyone within an organisation should be involved in improving quality.

Question 58

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

A.Actual expenditure was lower than budgeted

B.Actual expenditure was higher than budgeted

C.Actual output was lower than budgeted

D.Actual output was higher than budgeted

Question 59

Reported profits using activity-based costing (ABC) may be different from reported profits using marginal costing because ABC:

A.includes fixed costs within the cost of inventory.

B.ignores variable costs.

C.treats materials as the only truly variable cost.

D.leads to a different selling price.

Question 60

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

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

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

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

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

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Question 56

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Question 60

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