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

Actual exam question for CIMA's CIMAPRO19-P01-1 exam
Question #: 82
Topic #: 10
[All CIMAPRO19-P01-1 Questions]

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.

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Suggested Answer: D

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

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Kenneth
1 hours 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
6 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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Lonna
12 days ago
But the company operates a JIT purchasing system, so the price planning variance should be favourable.
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Ronny
14 days ago
I disagree, I believe the direct material price planning variance was favourable.
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Lonna
16 days ago
I think the direct material price planning variance was adverse.
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