CIMA Exam CIMAPRO19-P01-1 Topic 10 Question 82 Discussion

Actual exam question for CIMA's CIMAPRO19-P01-1 exam

Question #: 82
Topic #: 10

A company reports planning and operational variances to its managers. The following data are available concerning the price of direct material M in the last period. Material M is the only material used by the company. The company operates a just-in-time (JIT) purchasing system.

Which TWO of the following statements about last period are definitely correct based on this information?

The direct material price operational variance was adverse.

AThe direct material usage operational variance was adverse.

BThe direct material price planning variance was adverse.

CThe direct material price planning variance was favourable.

DThe direct material price operational variance was favourable.

Show Suggested Answer

Suggested Answer: D

by Detra at Mar 07, 2024, 06:13 PM

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Brande

7 days ago

I'm guessing the direct material usage operational variance was also adverse. With those price hikes, the managers are probably stressing out trying to find ways to cut costs. Maybe they could try sacrificing the interns to the accounting gods?

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Kenneth

8 days ago

Well, the data shows the price went up, so the direct material price planning variance must have been adverse. Looks like someone's getting a stern talking-to from the higher-ups.

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Levi

14 days ago

Hmm, let's see. Since the company operates a JIT system, I'd say the direct material price operational variance was probably favorable. Gotta love those just-in-time savings!

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