1. CIMA P1 - Management Accounting
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CIMA P1 - Management Accounting
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Sample Questions

2. Question No 1: Answer: A Question No 2: Answer: B Question No 3:
N prepares budgets on an annual basis by using the budget from the previous year, and then adjusting it for growth and inflation.
This is an example of:
An incremental budget
A rolling budget
A flexed budget
Zero based budgeting
Answer: A Question No 2:
What type of budget is prepared on an annual basis taking current year operating results and adjusting them for expected growth and inflation?
Rolling budget
Incremental budget
Flexed budget
Zero-based budget
Answer: B Question No 3:
Which of the following would cause an adverse fixed overhead volume variance?
Actual output was higher than budgeted
Actual output was lower than budgeted
Actual expenditure was higher than budgeted
Actual expenditure was lower than budgeted
Answer: B Question No 4:
Which one of the following would NOT be included in a decision to close a division of an organization?
Head office overheads absorbed on the basis of the number of units produced
Sale of unwanted non-current assets
Redundancy pay for employees of the division
Fixed costs directly attributable to the division

3. Answer: B, D Question No 6:
Answer: A Question No 5:
In short-term decision making, which TWO of the following are relevant costs?
Sunk costs
Avoidable costs
Committed costs
Opportunity costs
Notional costs
Answer: B, D Question No 6:
A company manufactures a single product. The cost card for a unit of this product is as follows: During month 6, finished goods inventory increased by 350 units.
By how much would the profit differ in month 6 if finished goods inventory was valued at standard marginal cost rather than standard absorption cost?
$1,050 lower
$1,050 higher
$2,450 lower
$2,450 higher

4. Answer: A Question No 7: Answer: A Question No 8:
A manufacturing company uses activity-based costing to charge overheads to its three products. One of the main activities is quality inspection. The cost driver is the number of inspections and the budgeted cost is $211,200.
Additional budgeted data.
What is the budgeted quality inspection cost for a unit of product F?
A. $6.60 B. $3.30 C. $9.60 D. $4.80
Answer: A Question No 8:
Which of the statements about allocation of joint costs to products are true and which are false?

5. Answer
Question No 9:
State whether the following costs are relevant or non-relevant in the context of short-term decision making scenarios.

6. Answer:

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