CIMA Exam CIMAPRA19-P03-1 Topic 5 Question 69 Discussion

Actual exam question for CIMA's CIMAPRA19-P03-1 exam

Question #: 69
Topic #: 5

You are theManagementAccountant for P, a food manufacturing company with an annual sales revenueof $5 million.

You discover that theProductionManager's records are inconsistent. Raw materials purchased do notagree to the total recorded for transfers to productionplus wastage.There isan averageshortfall of 2% of purchases.

You investigated and discovered that there are often mistakes made during manufacturing that results in food that is safe to eat, but cannot be sold because of visual flaws. TheProductionManager is supposed to scrap all such damaged product and write all such losses off as waste, but you discovered that he has been giving the damaged food to a charity that assists homeless people. No records are made of such gifts in order to conceal the losses due to manufacturing errors.

What should you do?

ADo nothing, this is a good cause and the amount is insignificant.

BInstigate disciplinary action, this is both theft and poor management.

CInstigatea confidential, but documented,review with the Production Manager andtell him to stop.

DInstigate a review of the production process to potentially reduce the amount of wastage.

EInstigate a process whereby edible but unsellable items can be given to the charity officially.

Show Suggested Answer

Suggested Answer: C, D, E

by Norah at Apr 30, 2025, 12:59 PM

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Lauran

4 days ago

We should also review the production process to reduce wastage in the future.

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Benton

7 days ago

I agree with Tien, we should have a confidential review with the Production Manager.

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Antonio

15 days ago

Option A? What is this, amateur hour? This is straight-up theft, my friend. Time to kick some serious managerial butt!

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Kent

16 days ago

Option D is the way to go, my dude. Fix the production process and you won't have this problem in the first place. Waste not, want not, am I right?

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Tien

16 days ago

But it's still theft and poor management, we should take action.

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Tegan

17 days ago

I dunno, the charity angle seems like a nice gesture. But you can't just ignore the inconsistencies. Maybe a combo of C and E could work - address it with the manager and set up an official channel for the donations.

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Ling

19 days ago

Hold up, this is clearly theft and poor management. Option B is the way to go - disciplinary action is a must here.

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Talia

11 days ago

Yes, I agree. The Production Manager should face consequences for his actions.

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Lelia

26 days ago

I think we should do nothing, it's for a good cause.

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Nada

2 months ago

Hmm, this seems like a tricky situation. I think option C would be the best approach - a confidential review to address the issue directly with the Production Manager.

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Tyra

11 days ago

E) Instigate a process whereby edible but unsellable items can be given to the charity officially.

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Lindsay

1 months ago

B) Instigate disciplinary action, this is both theft and poor management.

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Vinnie

1 months ago

C) Instigate a confidential, but documented, review with the Production Manager and tell him to stop.

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