CIMAPRO19-P01-1 Exam - 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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Shawna

4 months ago

Seems like a tricky situation with JIT in play!

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Sol

5 months ago

I think the price planning variance was favorable.

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Vincenza

5 months ago

Wait, how can we be sure about the usage variance?

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Berry

5 months ago

Totally agree with that!

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Tijuana

5 months ago

The direct material price operational variance was adverse.

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Mariann

6 months ago

I feel like I might be mixing up the definitions of planning and operational variances. I need to be careful with my choices on this one.

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Mary

6 months ago

This question seems similar to one we practiced where we had to determine if variances were favorable or adverse based on given data. I hope I can apply that knowledge here.

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Danica

6 months ago

I think the planning variance relates to the budgeted price versus the actual price, but I'm not entirely sure how that affects the operational variance here.

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Corinne

6 months ago

I remember that operational variances are calculated based on actual performance, so if the price variance is adverse, it means we paid more than expected.

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Helene

6 months ago

I'm confident that the direct material price planning variance was adverse, since the actual price was higher than the standard price. But I'm not sure about the usage variance.

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Catina

6 months ago

Based on the data provided, I can see that the actual price of material M was higher than the standard price. So the direct material price operational variance must have been adverse.

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Eva

6 months ago

Hmm, I'm a bit confused by the concept of price and usage variances. I'll need to review my notes on that before attempting to answer.

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Van

6 months ago

Okay, let's think this through step-by-step. The key information I need to focus on is the price of the direct material M and the variances reported.

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Ludivina

6 months ago

The question is asking which TWO statements are definitely correct. I think I can rule out the usage variance being adverse, since the question doesn't provide any information about usage. So I'll focus on the price variances.

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Adaline

6 months ago

I'm a bit unsure about this one. Let me re-examine the image and definitions to see if I can figure out the right components.

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Carol

6 months ago

Okay, I've got this. The key here is to ensure the incident is properly closed out, which means confirming the root cause and the changes required. Option B is the way to go.

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Virgilio

7 months ago

I remember practice questions focused a lot on medical history and risk factors, so I want to say that assessment of work history might be the odd one out here.

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Bambi

11 months ago

I just hope the managers don't try to blame the price hikes on the intern who spilled coffee on the accounting system. That would be a real material mistake!

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Maryann

10 months ago

B) The direct material price planning variance was adverse.

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Shay

10 months ago

A) The direct material usage operational variance was adverse.

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Carey

11 months ago

This is a tough one, but I'd say the correct answers are B and D. The planning variance was adverse, and the operational variance was favorable. Unless, of course, the company's accountants are playing some sort of diabolical mind game with us. In that case, all bets are off!

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Clement

11 months ago

I agree, it's a tricky situation. We'll have to wait and see what the final report says.

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Omer

11 months ago

But I'm not so sure about the operational variance, it could go either way.

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Sheron

11 months ago

I think you're right, the planning variance was definitely adverse.

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Brande

12 months 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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Ivette

10 months ago

C) The direct material price planning variance was favourable.

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Refugia

10 months ago

I hope they figure out a solution soon. Sacrificing interns might not be the best idea.

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Desmond

11 months ago

B) The direct material price planning variance was adverse.

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Paris

11 months ago

A) The direct material usage operational variance was adverse.

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Kenneth

12 months 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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Kayleigh

11 months ago

B) The direct material price planning variance was adverse.

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Chaya

11 months ago

A) The direct material usage operational variance was adverse.

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Levi

1 year 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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