Get CIMAPRO19-P01-1 Exam Practice Questions - Real and Updated

Which of the following, regarding costing methods, is true?

A bakery manager is deciding how many batches of birthday cakes to decorate each day.

Demand for the birthday cakes varies from 12 to 15 batches per day. Each batch decorated and sold earns a contribution of $40 but each batch unsold leads to loss of contribution of $15.

The payoff table below shows the total $ contribution from each of the possibilities:

Based on expected values, the number of batches of birthday cakes the bakery manager should decorate each day is:

MBM is considering introducing a new product and has to decide if the sales price should be $80, $90, $100 or $120.

There is a 30% chance that demand could be high, a 50% chance that demand will be at a medium level and a 20% chance that demand will be low.

A payoff table below shows the profits based on the sales price and the level of demand.

MBM has decided, using an expected value approach, that the sales price should be set at $80 as this gives the highest expected profit of $860,000.

A market research company has since approached MBM offering to provide perfect information on the demand level.

What is the maximum amount that should be paid for the perfect information?

Give your answer as a whole number (in '000s).

Company M is preparing its budgeted profit statement for the next year.

The initial budget for Product A is as follows with some changes proposed by the sales director to increase the quality of the product.

What would the budgeted profit of Product A be if the proposed changes are made?

Give your answer as a whole number.

A company makes and sells three products A, B and C.

The selling prices and costs of the three products, using a traditional absoprtion costing system, are shown in the table below.

The company has undertaken an analysis of overhead costs using activity-based costing (ABC).

The revised overhead costs for products A, B and C are $6, $32 and $55 respectively.

When comparing the figures obtained under the two costing methods, which of the following statements are true?

Select ALL that apply.