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CIMA Exam CIMAPRA17-BA2-1 Topic 1 Question 70 Discussion

Actual exam question for CIMA's CIMAPRA17-BA2-1 exam
Question #: 70
Topic #: 1
[All CIMAPRA17-BA2-1 Questions]

Refer to the Exhibit.

Fabex Ltd manufactures a household detergent called "Clear". The standard data for one of the chemicals used in production (chemical XTC) is as follows:

(a) 50 litres used per 100 litres of 'Clear' produced

(b) Budgeted monthly production is 1000 litres of 'Clear'.

The closing inventory of chemical XTC for November valued at standard price was as follows:

Actual results for the period during December were as follows:

(a) 500 litres of chemical XTC was purchased for 1300.

(b) 550 litres of chemical XTC was used.

(c) 900 litres of 'Clear' was produced.

It is company policy to extract the material price variance at the time of purchase.

What is the total direct material price variance (to the nearest whole number)?

Show Suggested Answer Hide Answer
Suggested Answer: C

Contribute your Thoughts:

Charlena
12 days ago
Hey, I've got it! The answer is D) 55 favourable. I mean, who doesn't love a good bargain on their cleaning supplies? Fabex Ltd must have some seriously savvy purchasing agents.
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Deeanna
15 days ago
Hmm, this one's tricky. I'm going to go with B) 50 favourable. It seems like the company is trying to trick us with all the details, but I'm sticking to my gut on this one.
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Nilsa
16 days ago
I think the correct answer is C) 55 adverse. The standard price for chemical XTC is not given, so we need to calculate the price variance based on the actual purchase price of 1300 and the standard price, which we can derive from the given information.
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Mozelle
24 days ago
I'm not sure, but I think it might be C) 55 adverse because the actual price paid was higher than the standard price.
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Nada
26 days ago
I agree with Herminia, because the actual price paid for the chemical was lower than the standard price, resulting in a favourable variance.
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Herminia
26 days ago
I think the answer is B) 50 favourable.
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