Most Recent CIMAPRO19-P01-1 Exam Dumps

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 Mar 1, 2026.

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Question No. 1

A medium-sized manufacturing company, which operates in the electronics industry, has employed a firm of consultants to carry out a review of the company's planning and control systems. The company presently uses a traditional incremental budgeting system and the inventory management system is based on economic order quantities (EOQ) and reorder levels. The company's normal production patterns have changed significantly over the previous few years as a result of increasing demand for customized products. This has resulted in shorter production runs and difficulties with production and resource planning. The consultants have recommended the implementation of activity based budgeting and a manufacturing resource planning system to improve planning and resource management.

What are the benefits for the company that could occur following the introduction of an activity based budgeting system?

Select ALL the correct answers.

AUnder an activity based budgeting system, resource allocation is linked to the strategic plan and is prepared after considering alternative strategies. This approach ensures that new activities that are required to meet the company's strategic objectives are included in the budget.

BUnder a traditional incremental budgeting system the focus is on existing resources and operations. Adjustments are then made for changes in activity and price which results in past inefficiencies being perpetuated. Under an activity based budgeting system, only resources that are needed to perform activities required to meet the budgeted production and sales volumes are included.

CActivity based techniques including activity based budgeting focus on the outputs of a process rather than the input to the process. This approach provides a clear framework for understanding the link between costs and the level of activity. It allows the ranking of activities and the determination of how limited resources should be allocated across competing activities.

DActivity Based Budgeting Systems present costs under functional headings i.e. the emphasis is on the nature of the cost. The weakness if this approach is that it gives little indication of the link between the level of activity and the cost incurred.

EThe approach under an Activity based Budgeting System is to make arbitrary cuts in order to meet overall financial targets.

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Correct Answer: A, B, C

References:

Question No. 2

You are a management accounting working for a car manufacturer. The company is publicly listed and has been around for many years.

The company produces 2 products. Car 1 and Car 2. Car 1 sells for 20,000 and Car 2 for 27,000.

Car 1 can be upgraded post production to the 1ZC model for 5,000 and Car 2 to the 2ZC model for 3,500.

Post production upgrade the 1ZC sells for 25,500 and the 2ZCfor 30,000.

The company sources all of its supplies for the same supplier and has access to a large workforce. As a result there are no bottlenecks or limiting factors to production.

Based on the information above the company should...

AUpgrade both models

BUpgrade Car 1 but not Car 2

CUpgrade Car 2 but not Car 1

DKeep both Cars as base models

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Correct Answer: B

Question No. 3

LM operates a parcel delivery service. Last year its employees delivered 15,120 parcels and travelled 120,960 kilometers. Total costs were $194,400.

LM has estimated that 70% of its total costs are variable with activity and that 60% of these costs vary with the number of parcels and the remainder vary with the distance travelled.

LM is preparing its budget for the forthcoming year using an incremental budgeting approach and has produced the following estimates:

* All costs will be 3% higher than the previous year due to inflation

* Efficiency will remain unchanged

* A total of 18,360 parcels will be delivered and 128,800 kilometers will be travelled.

Calculate the following costs to be included in the forthcoming year's budget:

(i) the total variable costs related to the number of parcels delivered.

(ii) the total variable costs related to the distance travelled.

AParcel related cost for next year = $112,308; Distance related costs for next year = $79,590

BParcel related cost for next year = $109,118; Distance related costs for next year = $89,699

CParcel related cost for next year = $112,118; Distance related costs for next year = $59,699

DParcel related cost for next year = $105,306; Distance related costs for next year = $30,590

EParcel related cost for next year = $115,306; Distance related costs for next year = $31,590

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Correct Answer: C

References:

Question No. 4

A company makes two products, product X with a contribution per unit of $10 and product Y with a contribution per unit of $4.

These products are sold in the mix 3:2 by volume and fixed costs are $38,000 per period.

The breakeven point for product Y, based on the expected sales mix is:

A2000 units per period

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Correct Answer: A

Question No. 5

Information about a company's two products is as follows:

The products are currently sold in equal quantities.

Monthly fixed costs are $360,000.

What is the monthly breakeven sales revenue assuming a sales quantity mix of 50/50?

Give your answer to the nearest $.

A$1600000

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Correct Answer: A

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