CIMA Updated P1 Exam Questions and Answers by ivaan

Find the weighted average contribution per unit using the following information:

200 units each of components F, G and H are required next period.

All three components are made by skilled labour of which only 4,000 hours are available.

An external supplier is able to supply any requirements of the components.

No inventories are held.

Data for the three components are as follows:

In order to minimise cost, how many units of component H should be purchased from the external supplier?

A decision tree is being evaluated back to a decision point.

There are two alternatives at this point:

1. To abandon the project and generate a return of $435,000;

2. To continue with the project and generate the following possible returns:

What value should be included at the decision point?

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...