P1 Management Accounting Exam Questions and Answers

QUESTION: 41

CORRECT TEXT
An entity manufactures two products.

The sales revenues of the products are in the constant mix of 3:1. Forecast data for next period are as follows:

The margin of safety for next period is $30,000 of sales revenue. Fixed costs are constant at all levels of output.

What is the forecast profit for next period?

Give your answer to the nearest whole number.

$15000
$18000

Answer(s): A

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QUESTION: 42

DRAG DROP (Drag & Drop is not supported)

A company makes Product A and Product B. The production process for both products uses one type of material, one type of labour, and utilises one machine. All three of these resources will be limited in November. The company has performed a linear programming model and the constraints and optimal solution, to maximise contribution, are as follows:

Constraints:

For November, which of the above constraints are binding, and which are non-binding?

See Explanation section for answer.

Answer(s): A

Explanation:

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QUESTION: 43

EFG is a small business making raspberry jam to sell at local markets. It has recently been approached by a major supermarket to produce a special order for the supply of lemon curd.

Two of the ingredients required are sugar and preservatives, both of which are in inventory.

The sugar has a historic cost of $4 per kg and a replacement cost of $5. It is in regular use for the production of the raspberry jam.

The factory has switched to organic processes and the preservatives are no longer required.

The historic cost of the preservatives was $3 per kg and the replacement cost is $2.50 per kg.

The preservatives can be re-sold to a local competitor for $1 per kg if they are not used in this order.

Which TWO of the following should be included in determining the relevant cost of the special order?

Sugar at $4 per kg
Sugar at $5 per kg
Preservatives at $3 per kg
Preservatives at $1 per kg
Preservatives at $2.50 per kg

Answer(s): B,D

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QUESTION: 44

CORRECT TEXT
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: