Free CIMA P1 Exam Dumps Questions & Answers

Explain THREE benefits that organizations gain from using budgetary planning and control systems.
Select ALL the true statements.

• A.Another benefit of budgeting is to set targets to motivate managers and optimize their performance.
• B.The budget is a useful device of influencing an operator's thoughts and motivating operators to perform in line with the organization's marketing budget.
• C.The budget provides an external benchmark against which performance against which performance can be evaluated.
• D.The budget acts as a variable mechanism, with actual results being compared with budget.
• E.The budget ensures actions of different parts of the organization are coordinated are reconciled otherwise managers take actions for the benefit of their own part of organization that may not benefit the organization as a whole.
• F.It provides a standard which managers may be motivated to achieve. It can also encourage inefficiency and conflict between managers particularly if the budget is imposed from above, whereby it may act as a threat rather than as a challenge.
• G.Budgeting forces an organization's management to look ahead and set performance targets.

GP is launching a new product. The annual forecast costs are as follows:

What is the expected value of the total costs?
Give your answer to the nearest whole $.

Traditional absorption costing is more suitable than activity-based costing when:

• A.production is specific to customer needs.
• B.overheads are not driven by production volume.
• C.the company has a diverse product range.
• D.overheads are small in comparison to direct costs.

A museum charges a reduced entrance fee for students in full-time education. The budgeted cost per customer is the same regardless of the entrance fee paid.
4,000 customers were budgeted to visit the museum during period 6, with 25% of customers paying the reduced fee.
3,000 customers visited the museum during period 6 and 1,000 of these paid the reduced entrance fee.
Costs were as budgeted but the actual full-priced entrance fee was $2 higher than budgeted.
Which of the following statements is true?

• A.The sales mix variance is adverse and the sales quantity variance is favourable.
• B.The sales mix variance is adverse and the sales quantity variance is adverse.
• C.The sales mix variance is zero and the sales quantity variance is favourable.
• D.The sales mix variance is zero and the sales quantity variance is adverse.

Which THREE of the following would be contained within a master budget?

• A.Capital expenditure budget
• B.Sales budget
• C.Budgeted cash flow statement
• D.Budgeted income statement
• E.Directors' salaries budget
• F.Budgeted statement of financial position