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CIMA P1 Exam Sample Questions


Question # 1

ABC uses an activity-based costing system. The company manufactures three products, details of which are given below:



Total material movement costs for the period are $10,000.
The material movement cost per unit for Product Z (to the nearest $0.01) is:
A. $10.67
B. $2.71
C. $3.23
D. $7.62


A. $10.67




Question # 2

The standard production cost of making a product is as follows:



What is the fixed production overhead capacity variance?
A. $9,000F
B. $6,000F
C. $3,000F
D. $6,000A


B. $6,000F




Question # 3

Christian the management accountant at a car manufacturer has been given a list of costs that have been incurred due to accidents and errors either occurring or being prevented. Which of the following are examples of non-conformance costs? Select ALL that apply.
A. Cost of scrap
B. Loss of goodwill
C. Cost of repairs to products
D. Inspection costs
E. Cost of repairs to equipment


A. Cost of scrap
B. Loss of goodwill
C. Cost of repairs to products




Question # 4

A company reports planning and operational variances to its managers. The following data are available concerning the price of direct material M in the last period. Material M is the only material used by the company. The company operates a just-in-time (JIT) purchasing system.



Which TWO of the following statements about last period are definitely correct based on this information?
The direct material price operational variance was adverse.
A. The direct material usage operational variance was adverse.
B. The direct material price planning variance was adverse.
C. The direct material price planning variance was favourable.
D. The direct material price operational variance was favourable.


C. The direct material price planning variance was favourable.
D. The direct material price operational variance was favourable.




Question # 5

A company is preparing its annual budget and is estimating the number of units of Product A that it will sell in each quarter of year 2. Past experience has shown that the trend for sales of the product is represented by the following relationship:

y = a + bx where
y = number of sales units in the quarter a = 10,000 units b = 3,000 units x = the quarter number where 1 = quarter 1 of year 1

Actual sales of Product A in Year 1 were affected by seasonal variations and were as follows:

Quarter 1:14,000 units Quarter2: 18,000 units Quarter 3: 18,000 units Quarter 4: 20,000 units
Calculate the expected sales of Product A (in units) for each quarter of year 2, after adjusting for seasonal variations using the additive model.
A. The expected sales for year 2 Quarter 4 was 32700 units
B. The expected sales for year 2 Quarter 4 was 32000 units
C. The expected sales for year 2 Quarter 4 was 33000 units
D. The expected sales for year 2 Quarter 4 was 40000 units


B. The expected sales for year 2 Quarter 4 was 32000 units



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