P1 Exam Dumps - Management Accounting

Go to page:

Question # 4

A company is forecasting sales volume using time series analysis. The following equation has been derived from past data and is considered to be a reliable predictor of future sales volume:

y = 20,000+80x

Where y is the total sales units each quarter and x is the time period (the first quarter of year 1 is time period 1).

The following set of seasonal variations for each quarter has been calculated using the additive model.

What is the forecast sales units for the second quarter of year 3?

21,200

20,400

21,520

20,720

Full Access

Question # 5

A museum charges a reduced entrance fee for students in full-time education. The budgeted cost per customer is the same regardless of the entrance fee paid.

4,000 customers were budgeted to visit the museum during period 6, with 25% of customers paying the reduced fee.

3,000 customers visited the museum during period 6 and 1,000 of these paid the reduced entrance fee. Costs were as budgeted but the actual full-priced entrance fee was $2 higher than budgeted.

Which of the following statements is true?

The sales mix variance is adverse and the sales quantity variance is adverse.

The sales mix variance is zero and the sales quantity variance is favourable.

The sales mix variance is adverse and the sales quantity variance is favourable.

The sales mix variance is zero and the sales quantity variance is adverse.

Full Access

Question # 6

A company manufactures a range of products. It is deciding whether to make one of its products internally or to buy the product partially completed from an external source and complete the manufacture in-house. The table below gives details of the variable costs of the two alternatives. Fixed production costs will remain the same under both alternative.

What is the sensitivity of the decision to a change in the external purchase price?

Give your answer as a whole percentage.

Full Access

Question # 7

Product G has the following sales information:

If moving averages of annual sales over 3-year periods are calculated, what is the moving average at Year 3?

182

168

185

170

Full Access

Question # 8

TP makes wedding cakes that are sold to specialist retail outlets which decorate the cakes according to the customersâ€™ specific requirements. The standard cost per unit of its most popular cake is as follows:

The general market prices at the time of purchase for Ingredient A and Ingredient B were $23 per kg and $20 per kg respectively. TP operates a JIT purchasing system for ingredients and a JIT production system; therefore, there was no inventory during the period.

Discuss the usefulness of the planning and operational variances calculated for TPâ€™s management.

Select ALL the TRUE statements.

The use of planning and operational variances will enable TPâ€™s management to draw a distinction between variances caused by factors extraneous to the business and planning errors (planning variances) and variances caused by factors that are within the control of management (operational variances).

The purchasing managerâ€™s performance canâ€™t be compared with the adjusted standards that reflect the conditions the manager actually operated under during the reporting period.

If planning and operational variances are not distinguished, there is potential for dysfunctional behavior especially where the manager has been operating efficiently and performance is being judged by factors outside the managerâ€™s control. In the case of TP it became evident during the period that the prevailing market prices for materials were significantly less than those set during the budget process.

Where a revision of standards is required due to environmental changes that were not foreseeable at the time the budget was prepared, the planning variances are controllable.

Standards that failed to anticipate known market trends when they were set will reflect faulty standard setting.

Full Access

Go to page: