Most Recent CIMAPRO19-P01-1 Exam Questions & Answers

Prepare for the CIMA P1 Management Accounting exam with our extensive collection of questions and answers. These practice Q&A are updated according to the latest syllabus, providing you with the tools needed to review and test your knowledge.

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The questions for CIMAPRO19-P01-1 were last updated on Jan 18, 2025.

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Question No. 1

JRL manufactures two products from different combinations of the same resources. Unit selling prices and unit cost details for each product are as follows:

* Refer to your answer in the previous question.

The optimal solution to the previous question shows that the shadow prices of skilled labour and direct material A are as follows:

Skilled labour $ Nil Direct Material A $11.70

Explain the relevance of these values to the management of JRL.

Select ALL the true statements.

AThe shadow price equals the additional contribution that would be earned from one extra unit of a scarce resource.

BIn a situation such as this, where a number of resources are scarce, the shadow price of any particular scarce resource will depend on whether or not the resource is not binding.

CThe shadow price for skilled labour is NIL because although there is a shortage of skilled labour it does have a constraining effect on output of JR as other resources are more scarce.

DSince material A is one of the binding constraints, if the availability of material A could be increased by one unit, this would change the optimal plan.

EThe decrease in contribution as a result of this change is the value of the shadow price of material A. The shadow price thus represents the maximum premium that should be paid for an additional unit of material A.

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Correct Answer: A, D

References:

Question No. 2

The daily demand for a perishable product has the following probability distribution:

Each unit of the product costs $6 and is sold for $10.

Unsold items are thrown away at the end of the day.

Orders must be placed each morning before the daily demand is known.

The payoff table below shows the profit that would be earned for each of the combinations of purchases and demand.

The number of units that should be purchased at the beginning of each day in order to maximize expected profit is:

A400 units

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Correct Answer: A

Question No. 3

A company's management is considering investing in a project with an expected life of 4 years. It has a positive net present value of $180,000 when cash flows are discounted at 8% per annum. The project's cash flows include a cash outflow of $100,000 for each of the four years. No tax is payable on projects of this type.

The percentage increase in the annual cash outflow that would cause the company's management to reject the project from a financial perspective is, to the nearest 0.1%:

A54.3%

B45.0%

C55,6%

D184.0%

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Correct Answer: A

References:

Question No. 4

A manufacturing company is preparing the production budget for the forthcoming year.

The following budgeted information has already been obtained:

How many units will need to be produced for the forthcoming year?

Give your answer to the nearest whole number.

A22639

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Correct Answer: A

Question No. 5

Which of the following would lead to a favourable variance?

AThe standard material price was set too low.

BThe standard material usage was set too low.

CActual labour cost was higher than standard.

DLabour hours worked were lower than standard.

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Correct Answer: D

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