Free CIMA CIMAPRO15-P01-X1-ENG Exam Dumps Questions & Answers

PL currently earns an annual contribution of $2,880,000 from the sale of 90,000 units of product B. Fixed costs are $800,000 per annum.
The management of PL is considering reducing the selling price per unit to $48. The estimated levels of demand at the revised selling price and the probabilities of them occurring are as follows:

Calculate the probability that the profit will increase from its current level if the selling price is reduced to $48.

• A.The probability therefore that the contribution will exceed $2,880,000 is 90%.
• B.The probability therefore that the contribution will exceed $2,880,000 is 40%.
• C.The probability therefore that the contribution will exceed $2,880,000 is 50%.
• D.The probability therefore that the contribution will exceed $2,880,000 is 70%.

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.F, D, F
• C.D, E, F
• D.D, E, F

'A zero-based budgeting system involves establishing decision packages that are then ranked in order of their relative importance in meeting the organization's objectives'.
Which of the following is true regarding he difficulties that a not-for-profit organization may experience when trying to rank decision packages.
Select ALL true statements.

• A.Management may decide to reject packages even though the activity was done last year. In this way the organization is said to be starting from a zero base with each package given due consideration.
• B.The activities that are being proposed in a budget are described in decision packages. There will often be more than one decision package proposed for an activity.
• C.Management may decide to accept packages even though the activity was done last year. In this way the organization is said to be starting from a 100% cost base with each package given due consideration.
• D.Some of these packages will be mutually inclusive and will require management to select the best solution to the issue involved.
• E.The activities that are being proposed in a budget are described in variable packages. There will often be more less than one decision package proposed for an activity.
• F.In a public sector body, for example, decision packages will relate to very disparate activities.
• G.Some of these packages will be inclusive and will require operations to select the best solution to the issue involved.
• H.Each decision package is evaluated. Its costs are compared to its benefits and net present values or other measures calculated.
• I.In a public sector body, for example, decision packages will relate profit making activities.

A company's budget for the next period shows that it would breakeven at sales revenue of $800,000 and fixed costs of $320,000.
The sales revenue needed to achieve a profit of $200,000 in the next period would be:

• A.$1,780,000
• B.$1,390,000
• C.$1,300,000
• D.$1,400,000
• E.$1,950,000

A master budget comprises the...

• A.budgeted income statement and budgeted cash flow statement only.
• B.budgeted income statement and budgeted balance sheet only.
• C.budgeted income statement, budgeted balance sheet and budgeted cash flow statement only.
• D.budgeted income statement and budgeted capital expenditure only