CIMA CIMAPRO19-P01-1 Free Sample Exam Questions 2026

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Total Questions: 260

Questions & Answers PDF

• Question 1

  

  LM operates a parcel delivery service. Last year its employees delivered 15,120 parcels and travelled 120,960 kilometers. Total costs were $194,400.LM has estimated that 70% of its total costs are variable with activity and that 60% of these costs vary with the number of parcels and the remainder vary with the distance travelled.LM is preparing its budget for the forthcoming year using an incremental budgeting approach and has produced the following estimates:* All costs will be 3% higher than the previous year due to inflation* Efficiency will remain unchanged* A total of 18,360 parcels will be delivered and 128,800 kilometers will be travelled.Calculate the following costs to be included in the forthcoming year's budget:(i) the total variable costs related to the number of parcels delivered.(ii) the total variable costs related to the distance travelled.

  • Parcel related cost for next year = $112,308; Distance related costs for next year = $79,590
  • Parcel related cost for next year = $109,118; Distance related costs for next year = $89,699
  • Parcel related cost for next year = $112,118; Distance related costs for next year = $59,699
  • Parcel related cost for next year = $105,306; Distance related costs for next year = $30,590
  • Parcel related cost for next year = $115,306; Distance related costs for next year = $31,590

  Reveal Answer Answer: C Next Question

• Question 2

  

  RFT, an engineering company, has been asked to provide a quotation for a contract to build a new engine. The potential customer is not a current customer of RFT, but the directors of RFT are keen to try and win the contract as they believe that this may lead to more contracts in the future. As a result, they intend pricing the contract using relevant costs. The following information has been obtained from a two-hour meeting that the Production Director of RFT had with the potential customer. The Production Director is paid an annual salary equivalent to $1,200 per 8-hour day. 110 square meters of material A will be required. This is a material that is regularly used by RFT and there are 200 square meters currently in inventory. These were bought at a cost of $12 per square meter. They have a resale value of $10.50 per square meter and their current replacement cost is $12.50 per square meter. 30 liters of material B will be required. This material will have to be purchased for the contract because it is not otherwise used by RFT. The minimum order quantity from the supplier is 40 liters at a cost of $9 per liter. RFT does not expect to have any use for any of this material that remains after this contract is completed. 60 components will be required. These will be purchased from HY. The purchase price is $50 per component. A total of 235 direct labour hours will be required. The current wage rate for the appropriate grade of direct labour is $11 per hour. Currently RFT has 75 direct labour hours of spare capacity at this grade that is being paid under a guaranteed wage agreement. The additional hours would need to be obtained by either (i) overtime at a total cost of $14 per hour; or (ii) recruiting temporary staff at a cost of $12 per hour. However, if temporary staff are used they will not be as experienced as RFT's existing workers and will require 10 hours supervision by an existing supervisor who would be paid overtime at a cost of $18 per hour for this work. 25 machine hours will be required. The machine to be used is already leased for a weekly leasing cost of $600. It has a capacity of 40 hours per week. The machine has sufficient available capacity for the contract to be completed. The variable running cost of the machine is $7 per hour. The company absorbs its fixed overhead costs using an absorption rate of $20 per direct labour hour.Select ALL the true statements.

  • The cost for the production director meeting was a relevant cost.
  • Material A was a relevant cost.
  • Material B was a relevant cost.
  • The components are to be purchased from HY at a cost of $50 each. This is a relevant cost because it is future expenditure that will be incurred as a result of the work being undertaken.
  • The machine is currently being leased and it has spare capacity so it will either stand idle or be used on this work. The lease cost will be a relevant cost or $10 per hour.
  • The company absorbs its fixed overhead costs using an absorption rate of $20 per direct labour hour. This is a relevant cost.
  • The relevant cost is $7010
  • The relevant cost is $7080
  • The relevant cost is $7100

  Reveal Answer Answer: B, C, D, G Next Question

• Question 3

  

  Which costing method, used in just-in-time (JIT) production systems, attaches cost directly to output rather than following the flow of product through the production process?

  • Backflush costing
  • Absorption costing
  • Marginal costing
  • Process costing

  Reveal Answer Answer: A Next Question

• Question 4

  

  Which THREE of the following are purposes of all budgets?

  • Co-ordination
  • Communication
  • Profit maximisation
  • Diversification
  • Authorization
  • Consolidation

  Reveal Answer Answer: A, B, E Next Question

• Question 5

  

  EFG is a small business making raspberry jam to sell at local markets. It has recently been approached by a major supermarket to produce a special order for the supply of lemon curd.Two of the ingredients required are sugar and preservatives, both of which are in inventory.The sugar has a historic cost of $4 per kg and a replacement cost of $5. It is in regular use for the production of the raspberry jam.The factory has switched to organic processes and the preservatives are no longer required.The historic cost of the preservatives was $3 per kg and the replacement cost is $2.50 per kg.The preservatives can be re-sold to a local competitor for $1 per kg if they are not used in this order.Which TWO of the following should be included in determining the relevant cost of the special order?

  • Sugar at $4 per kg
  • Sugar at $5 per kg
  • Preservatives at $3 per kg
  • Preservatives at $1 per kg
  • Preservatives at $2.50 per kg

  Reveal Answer Answer: B, D Next Question

• Question 6

  

  8fb9be1c-b0d5-4acb-8cfb-f4b4426e641B. The primary objective of Company A is to maximize profit. It is now deciding on the optimum production mix for the next period and has one limited production resource.The production mix decision should be based on:

  • Minor or majorchangesinproduct mix
  • Developing New Uses of Existing Products

  Reveal Answer Answer: B Next Question

• Question 7

  

  The simplex method has been used to determine the optimum output of products P, Q, R and S with constraints on resources J, K and L.In the final simplex tableau, the figure in the product R row and the column for slack variable K is 80.Which of the following statements is correct?

  • For each additional unit of resource K available, the contribution would increase by $80.
  • For each additional unit of resource K available, the output of product R would increase by 80 units.
  • For each additional unit of product R produced, 80 additional units of resource K would be required.
  • In the optimum solution, 80 units of resource K are unused.

  Reveal Answer Answer: B Next Question

• Question 8

  

  Which of the following statements about relevant costs is correct?

  • Relevant costs will always be lower than the full costs used in external profit reporting.
  • Relevant costs will always be higher than the full costs used in external profit reporting.
  • Relevant costs may not be used in external profit reporting because they do not adhere to the accruals basis of accounting.
  • Relevant costs must be used in external profit reporting so that reported profits follow the pattern of cash flow.

  Reveal Answer Answer: C Next Question

• Question 9

  

  A company produces and sells two products, product A and product B.What are the total fixed costs when the weighted average contribution per unit is $5 and the breakeven points for product A and product B are 10,000 units and 5,000 units respectively?Give your answer as a whole number (in 000's).

  Reveal Answer Answer: $75000 Next Question

• Question 10

  

  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?

  • Legal cost incurred in a case relating to river pollution caused by use of the company's products in nearby fields.
  • Cost incurred in a product trial, carried out prior to product launch, as a consequence of the product failing to meet environmental standards.
  • Clean-up cost resulting from leakage of a toxic chemical at one of the company's production plants.
  • Cost of employing an outsourcing company to dispose of toxic waste caused by a quality failure during routine production.

  Reveal Answer Answer: A Next Question

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Total Questions: 260

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