Cima C01 Exam Question No 25

Question No 25:

What is overtime premium is?

A. The additional amount paid for hours worked in excess of the basic working week.
B. The additional amount paid over and above the normal hourly rate for hours worked in excess of the basic working week.
C. The additional amount paid over and above the overtime rate for hours worked in excess of the basic working week.
D. The overtime rate.

Answer: B

Cima C01 Exam Question No 24

Question No 24:

Which of the following would NOT be included in a cash budget?
(i) Depreciation
(ii) Provisions for doubtful debts
(iii) Wages and salaries

A. (i) and (ii) only
B. (ii) and (iii) only
C. (iii) only
D. (i) only

Answer: A

Cima C01 Exam Question No 23

Question No 23:

The principal budget factor is the?

A. Factor which limits the activities of the organisation and is often the starting point in budget preparation.
B. Budgeted revenue expected in a forthcoming period.
C. Main budget into which all subsidiary budgets are consolidated.
D. Overestimation of revenue budgets and underestimation of cost budgets, which operates as a safety factor against risk.

Answer: A

Cima C01 Exam Question No 22

Question No 22:

RS is currently preparing the production budget for Product A and the material purchase budget for material X for the forthcoming year. Each unit of Product A requires 5 kgs of material X.
The anticipated opening inventory for Product A is 5,000 units and the company wishes to increase the closing inventory by 30% by the end of the year.

The anticipated opening inventory for material X is 50,000 kgs and in order to avoid stock outs the required closing inventory has been increased to 60,000 kgs.
The Sales Director has confirmed a sales requirement of 70,000 units of Product A. What will be the purchases budget for material X?

A. 347,500 kgs
B. 350,000 kgs
C. 357,500 kgs
D. 367,500 kgs

Answer: D

Cima C01 Exam Question No 21

Question No 21:

RS is currently preparing the production budget for Product A and the material purchase budget for material X for the forthcoming year. Each unit of Product A requires 5 kgs of material X.
The anticipated opening inventory for Product A is 5,000 units and the company wishes to increase the closing inventory by 30% by the end of the year.
The anticipated opening inventory for material X is 50,000 kgs and in order to avoid stock outs the required closing inventory has been increased to 60,000 kgs.
The Sales Director has confirmed a sales requirement of 70,000 units of Product A.
How many units of Product A will need to be produced?

A. 68,500 units
B. 71,500 units
C. 76,500 units
D. 80,000 units

Answer: B

Cima C01 Exam Question No 20

Question No 20:

The term “budget slack” refers to the

A. Extended lead time between the preparation of the functional budgets and the master budget.
B. Difference between the budgeted output and the break even output.
C. Additional capacity available which can be budgeted for.
D. Deliberate over-estimation of costs and under-estimation of revenues in a budget.

Answer: D

Cima C01 Exam Question No 19

Question No 19:

The following extract is taken from the overhead budget of X:

Budgeted activity                50%         75%
Budgeted overhead         $100,000     $112,500

The overhead budget for an activity level of 80% would be
A. $115,000
B. $120,000
C. $136,000
D. $160,000

Answer: A