Free CIMA P1 Exam Dumps Questions & Answers

MBB is considering the costs to be incurred in respect of a special order.
The order would require 625 kg of Material K.
This is a material that is readily available and regularly used by the organization in its other products.
There are 265 kg of Material K in inventory which cost $1,590 when it was purchased.
The current market price is $6.48 per kg.
Material K is normally used to make Product X. Each unit of Material X requires 3 kg of Material K, and if Material K is costed at $6 per kg, each unit of Product X yields a contribution of $30.
The relevant cost of Material K to be included in the costing of the special order is:

• A.$3,923
• B.$6,250
• C.$3,990
• D.$4,050

Place the type of budget or cost against its definition.

Correct Answer:

In short-term decision making, which TWO of the following are relevant costs?

• A.Committed costs
• B.Notional costs
• C.Sunk costs
• D.Avoidable costs
• E.Opportunity costs

A manager has not yet used all oh his budget. He is worried that his budget maybe reduced next year if he is not seen to have needed all the funds. He decides to spend the remaining £1,580 on another team building exercise as well as a catered lunch for his department.
This example falls under which behavioural aspect of budgetary control?

• A.Budget negotiation
• B.Motivation
• C.Short term focus
• D.Irrational spending

A company's product range includes Product N. The costs relating to Product N are shown below:

The direct labour costs relate to specialists employed to work wholly and exclusively with Product N.
If the company stopped making Product N, the insurance overhead cost would cease, but overhead cost J would be unaffected. Both overheads are absorbed in direct proportion to material costs.
Which of the following costs should be used in the decision whether to stop making Product N?

• A.$910,100
• B.$850,000
• C.$884,000
• D.$944,100