CIMAPRO15-P01-X1-ENG Exam Questions and Answers

QUESTION: 6

A company produces three products D, E and F. The statement below shows the selling price and product costs per unit for each product, based on a traditional absorption costing system.

Each of the products is produced using Process A which has a maximum capacity of 2,500 hours per period.

If a throughput accounting approach is used, the ranking of products, in order of priority, for the profit maximizing product mix will be:

D, E, F
E, D, F
F, D, E
D, F, E

Answer(s): C

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QUESTION: 7

‘A zero-based budgeting system involves establishing decision packages that are then ranked in order of their relative importance in meeting the organization’s objectives’.

Which of the following is true regarding he difficulties that a not-for-profit organization may experience when trying to rank decision packages.

Select ALL true statements.

The activities that are being proposed in a budget are described in variable packages. There will often be more less than one decision package proposed for an activity.correct
The activities that are being proposed in a budget are described in decision packages. There will often be more than one decision package proposed for an activity.
Some of these packages will be inclusive and will require operations to select the best solution to the issue involved.
Some of these packages will be mutually inclusive and will require management to select the best solution to the issue involved.
Each decision package is evaluated. Its costs are compared to its benefits and net present values or other measures calculated.
Management may decide to reject packages even though the activity was done last year. In this way the organization is said to be starting from a zero base with each package given due consideration.
Management may decide to accept packages even though the activity was done last year. In this way the organization is said to be starting from a 100% cost base with each package given due consideration.
In a public sector body, for example, decision packages will relate profit making activities.
In a public sector body, for example, decision packages will relate to very disparate activities.

Answer(s): B,D,E,F

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QUESTION: 8

A company is considering whether to develop an overseas market for its products. The cost of developing the new market is estimated to be $250,000. There is a 70% probability that the development of the new market will succeed and a 30% probability that the development of the new market will fail and no further expenditure will be incurred.

If the market development is successful, the profit from the new market will depend on prevailing exchange rates. There is a 50% chance that exchange rates will be in line with expectations and a profit of $500,000 will be made. There is a 20% chance that exchange rates will be favorable and a profit of $630,000 will be made and a 30% chance that exchange rates will be adverse and a profit of $100,000 will be made.

The profit figures stated are before taking account of the development costs of $250,000.
Use a decision tree to decide whether the company should develop an overseas market for its products.

Select one correct answer.

There is 70% chance that the project will fail.
There is 65% chance that the project will fail.
The overseas market should not be developed.
The overseas market should be developed.
There is a chance to make $506 000 profit.
There may be a loss of $110 000.

Answer(s): D

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QUESTION: 9

JL is preparing its cash budget for the next three quarters.
The following data have been extracted from the operational budgets:

Additional information is available as follows:

•JL sells 20% of its goods for cash. Of the remaining sales value, 70% is received within the same quarter as sale and 30% is received in the following quarter. It is estimated that trade receivables will be $125,000 at the beginning of Quarter 1. No bad debts are anticipated.
•50% of payments for direct material purchases are made in the quarter of purchase, with the remaining 50% in the quarter following purchase. It is estimated that the amount owing for direct material purchases will be $60,000 at the beginning of Quarter 1.
•JL pays labour and overhead costs when they are incurred. It has been estimated that labour and overhead costs in total will be $303,600 per quarter. This figure includes depreciation of $19,600.
•JL expects to repay a loan of $100,000 in Quarter 3.
•The cash balance at the beginning of Quarter 1 is estimated to be $49,400 positive.

Required:
Prepare a cash budget for each of the THREE quarters.
What will the closing balance of cash flows in quarter THREE be?

$100 200
$170 400
$145 000
$150 200
$130 200
$160 690
$184 900

Answer(s): E

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QUESTION: 10

Explain why sensitivity analysis is useful when dealing with uncertainty in project appraisal. Select all the true statements.

Sensitivity analysis enables a company to determine the effect of changes to fixed costs on the planned outcome
Sensitivity analysis enables a company to determine the effect of changes to variables on the planned outcome
In project appraisal, an analysis can be made if all the key variables to ascertain by how much variable would need to change before the net present value (NPV) reaches zero i.e. the indifference point.
In project appraisal, in analysis can be made of all the key variables to ascertain by how much each variable would need to change before the net present value (NPV) reaches 100% i.e. the maximum point.

Answer(s): B,C

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CIMA CIMAPRO15-P01-X1-ENG Exam (page: 2) CIMA P1 Management Accounting Updated on: 07-Feb-2026

QUESTION: 6

QUESTION: 7

QUESTION: 8

QUESTION: 9

QUESTION: 10

CIMA CIMAPRO15-P01-X1-ENG Exam (page: 2)
CIMA P1 Management Accounting
Updated on: 07-Feb-2026