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CIMA P1 Exam Sample Questions


Question # 1

A company is forecasting its revenue for May and has established that sales will be either high, medium or low. The expected value of sales revenue for May has been calculated as $160,000. The following table includes data which relate to the potential sales in May.

Revenue Probability Expected Value
High $250,000 0.2 C
Medium A 0.5 D
Low $100,000 B $30,000

Place the figures given in to the spaces marked with the letters A, B, C and D, to complete the above table.





Question # 2

Traditional absorption costing is more suitable than activity-based costing when:
A. overheads are not driven by production volume.
B. the company has a diverse product range.
C. production is specific to customer needs.
D. overheads are small in comparison to direct costs.


D. overheads are small in comparison to direct costs.




Question # 3

Forecast sales demand of product W next period is 6,800 units. Product W requires 5 kg of material Y, seven hours of skilled labour and six hours of semi-skilled labour.
Availability of resources for next period is forecast as follows:



No inventories are held.
What is the principal budget factor for next period?
A. Sales demand
B. Availability of material Y
C. Availability of skilled labour
D. Availability of semi-skilled labour


C. Availability of skilled labour




Question # 4

The following 5 statements apply the principles of either, both or neither absorption costing and marginal costing.

Place the option labels against the relevant statements.





Question # 5

Where sales volume is the principal budget factor, which of the following is the correct order in which budgets have to be prepared?
A. Sales budget, production budget, material usage budget, material purchases budget
B. Sales budget, production budget, materials purchases budget, material usage budget
C. Production budget, sales budget, material usage budget, material purchases budget
D. Prodcution budget, material usage budget, material purchases budget, sales budget


A. Sales budget, production budget, material usage budget, material purchases budget



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