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CIMA P1 - Management Accounting Question Tutorial Sample Questions:

1. A company is preparing its annual budget and is estimating the number of units of Product W that it will sell in each quarter of year 2. Past experience has shown that the trend for sales of the product is represented by the following relationship:

Calculate the expected unit sales of Product W for each quarter of year 2, after adjusting for seasonal variations using the multiplicative model.

A) The sales forecast for year 2 Quarter 4 = 25,100 units
B) The sales forecast for year 2 Quarter 4 = 22,600 units
C) The sales forecast for year 2 Quarter 4 = 38,100 units
D) The sales forecast for year 2 Quarter 4 = 35,100 units

2. 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.


Calculate, for the original budget, the budgeted fixed overhead costs, the budgeted variable overhead cost per tray and the budgeted total overheads costs.

A) Original budget contribution = $272 000, Flexed budget contribution = $ 248 200, Actual Contribution $ 321 960
B) Original budget contribution = $162 000, Flexed budget contribution = $ 178 200, Actual Contribution $ 201 960
C) Original budget contribution = $172 000, Flexed budget contribution = $ 148 200, Actual Contribution $ 221 960
D) Original budget contribution = $242 000, Flexed budget contribution = $ 148 200, Actual Contribution $ 121 960

3. A company produces three products D, E and F. The statement below shows the selling price and product costs per unit for each product, based on a traditional absorption costing system.

Each of the products is produced using Process A which has a maximum capacity of 2,500 hours per period.
If a traditional contribution approach is used, the ranking of products, in order of priority, for the profit maximizing product mix will be:

A) E, D, F
B) D, E, F
C) D, E, F
D) F, D, F

4. 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.
What was the budgeted machine set up cost per unit of product Q?

A) $0.48 per unit
B) $0.39 per unit
C) $0.56 per unit
D) $0.37 per unit

5. TP makes wedding cakes that are sold to specialist retail outlets which decorate the cakes according to the customers' specific requirements. The standard cost per unit of its most popular cake is as follows:

The general market prices at the time of purchase for Ingredient A and Ingredient B were $23 per kg and $20 per kg respectively. TP operates a JIT purchasing system for ingredients and a JIT production system; therefore, there was no inventory during the period.
What was the material yield variance?

A) The material yield variance was $175 000 A
B) The material yield variance was $175 500 A
C) The material yield variance was $155 000 A
D) The material yield variance was $155 500 A
E) The material yield variance was $98 500 A

Solutions: