CIMA CIMAPRA17-BA2-1 Exam Dumps

A company which manufactures and sells one product has fixed costs of $80,000 per period. The selling price per unit of $25 generates a contribution/sales ratio of 40%.How many units would need to be sold in a period to earn a profit of $10,000?

• 9,000
• 8,000
• 36,000
• 32,000

A company's output level increases but remains within the relevant range. Which ONE of the following statements is incorrect?

• Total variable costs will increase
• Total fixed costs will remain the same
• Variable costs per unit will decrease
• Fixed costs per unit will decrease

In process costing, the term equivalent units refers to :

• Units of the same size and weight
• The conversion of partly completed units into an equivalent number of completed units
• The number of units produced in an equivalent time period of the previous month
• The valuation of products on a weight or volume of output basis

A feature of a normal curve is that it is asymptotic, meaning that .

• it extends into infinity.
• the mean divides the curve exactly in half.
• the area under the curve = 1.

A company operates an absorption costing system. Overheads are absorbed using a pre-determined absorption rate using labour hours. In the period actual labour hours were 10,600, 400 hours below budget. Actual overheads for the period were £234,680 and there was an under-absorption of overheads of £1,480.What was the budgeted level of overheads?

• £242,000
• £233,200
• £245,072
• £224,720

Which of the following is NOT a valid purpose of budgeting?

• To communicate targets to managers.
• To comply with financial reporting requirements.
• To coordinate the different activities of an organisation.
• To authorise managers to incur expenditure.

A product has a break-even point of 40,000 units and a margin of safety of 20%. The contribution per unit is £3.What is the budgeted profit?

• £8,000
• £24,000
• £30,000
• £40,000

Which of the following would be the most appropriate cost unit for a transport delivery service?

• Gallon
• Gallon - tonne
• Tonne delivered
• Tonne - mile

In responsibility accounting, costs and revenues are grouped according to:

• the budget holder.
• their function.
• the service provided.
• their behaviour.

Two rival furniture manufacturers have recently merged together. Before the merge each party had three outlets and one factory each. Now they have two factories, six stores with another 3 planned in the next year.Previously, one company had operated with function cost centres, looking at costs incurred by each department whilst the other had chosen to look at costs per activity.Whilst the companies were small this worked and costs were easy to manage and issues could be dealt with quickly and efficiently. Since then costs have gone out of control as the old systems no longer work for this large, nationwide company.What is a suitable type of cost centre to use now?

• Activity
• Service location
• Equipment