CIMAPRA17-BA2-1 Exam - Topic 1 Question 24 Discussion

Actual exam question for CIMA's CIMAPRA17-BA2-1 exam

Question #: 24
Topic #: 1

A company operates an integrated standard cost accounting system. The standard price of raw material A is $20 per litre. At the start of period 1, the inventory of 500 litres of raw material A was valued at $20 per litre. During period 1, 100 litres of raw material A were purchased at an actual price of $21 per litre. During period 2, 550 litres of raw material A were issued to Job 789.

In respect of the above events, which TWO of the following statements are correct? (Choose two.)

AThe raw material inventory at the end of period 1 should include 100 litres valued at $21 per litre.

BAn adverse material price variance should be recorded in the statement of profit or loss for period 1.

CThe raw material inventory at the end of period 2 should be valued at $20 per litre.

DAn adverse material price variance should be recorded in the statement of profit or loss for period 2.

EThe first 500 litres of raw material A issued should be debited to the Job 789 account at $20 per litre, and the remaining 50 litres at $21 per litre.

Show Suggested Answer

Suggested Answer: D, E

by Lashaunda at May 05, 2022, 08:59 AM

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Jamal

5 months ago

The first 500 litres should definitely be at $20, makes sense!

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Annelle

6 months ago

I think the inventory should still be valued at the standard price.

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Karina

6 months ago

Wait, why would the inventory at the end of period 1 include the $21 litres?

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Filiberto

6 months ago

Totally agree, there should be a price variance recorded!

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Shayne

6 months ago

The standard price is $20, but they bought some at $21.

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Reita

6 months ago

This seems like a straightforward question about supply chain benchmarking. I'll focus on identifying the key criteria that make a firm an appropriate benchmark.

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Tamesha

6 months ago

Okay, I've read through the question a few times now. I'm pretty confident the answer is C - the new $500 order should be processed since it comes before the existing open orders, and the system will put a credit hold on the order with the latest request date.

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Noah

6 months ago

I think it might be under Wireless Health? There was a practice question about checking AP performance there.

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Tresa

7 months ago

I've practiced questions like this before, and I lean toward option A, but I can't help but second-guess myself after seeing the other choices.

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