Cima P2 Exam Question No 7

Question No 7:

A company is classifying its quality costs to prepare a quality cost report. Which of the following are conformance costs?
Select ALL that apply.

A. Internal Failure Costs
B. External Failure Costs
C. Prevention Costs
D. Appraisal Costs

Answer: C, D

Cima P2 Exam Question No 6

Question No 6:

K Supermarket spends $80,000 per year on checking and processing receipts of inventory. Annual warehouse costs are a further $70,000 per year. These costs are currently treated as fixed overheads in the company's costing system.

As an experiment, the company is preparing a direct profitability analysis of a small range of products, including fresh grapes.
K Supermarket receives a total of 3,600 deliveries every year. 20% of these deliveries are of perishable goods such as grapes. It takes twice as long to process a delivery of perishable goods compared to a normal delivery because perishable goods have to be checked more carefully.
Half of the warehouse costs are for the chilled store that is used to store perishable goods. At any time, the chilled store has 800 kilos of perishable goods in stock.
K Supermarket receives 150 deliveries of grapes every year. Each delivery is for 100 kilos of grapes. The grapes spend an average of two days in the chilled store before they are sold.
Calculate the total cost per kilo of checking, processing and storing grapes that should be taken into account in determining the profitability of grapes.
Give your answer to the nearest whole cent.
 
Answer: 61 cents

Cima P2 Exam Question No 5

Question No 5:

An electronics company sells a range of tablet computers. Tablet computers come complete with an operating system that is regarded as the market leader. The company aims to launch a new version of its hardware every eighteen months and a major update to its software every three years. The latest version of the tablet computer is always sold at a higher price, but the older version that has been replaced is then sold for a time at a discounted price.
Which pricing model does this company appear to be using?

A. Penetration and loss leader pricing
B. Penetration and product bundling
C. Skimming and loss leader pricing
D. Skimming and product bundling

Answer: D

Cima P2 Exam Question No 4

Question No 4:

What Types of relevant costs?

Answer:

1. Future cash flows
2. Incremental costs
3. Opportunity costs
4. Avoidable costs
5. Sunk costs
6. Committed costs
7. Allocated costs
8. Depreciation and Amortisation

Cima P2 Exam Question No 3

Question No 3:

What is Relevant Costs?

Answer:

These are costs that will be directly affected by the outcome of the decision or have a direct effect on the decision. These will be costs that have a direct impact on the cash flow or revenue of the business. Relevant costs are FUTURE, CASH, and INCREMENTAL costs directly arising as the result of an investment decision.

Cima P2 Exam Question No 2

Question No 2:

What is Costs and decision making?

Answer: 

•Products to make (or not)
•Businesses to buy (or sell)
•Assets to purchase (or lease) or those to dispose of
•Staff to employ
•Resources to acquire (e.g. key materials)