CIMAPRO19-P03-1 Exam - Topic 4 Question 24 Discussion

Actual exam question for CIMA's CIMAPRO19-P03-1 exam

Question #: 24
Topic #: 4

You are the management accountant for YY a food manufacturing company with an annual sales revenue of $6 million

You discover that the production manager's records are inconsistent Raw materials purchased do not agree with the total recorded for transfers to production plus wastage There is an average shortfall of 2% of purchases

You have investigated and discovered that there are often errors made during manufacturing that results in food that is safe to eat but. because of visual flaws, cannot be sold

The production manager is supposed to scrap all such damaged products and write all such losses off as waste You have discovered however that he has been giving the damaged food to a charity that assists homeless people No records are made of such gifts in order to conceal the losses due to manufacturing errors

Which of the following actions should you take? Select ALL that apply

AInstigate disciplinary action this is both theft and poor management

BDo nothing; this is a good cause and the amount is insignificant

CInstigate a review of the production process to potentially reduce the amount of wastage.

DInstigate a confidential but documented review with the production manager and tell him to stop

EInstigate a process whereby edible but unsellable items can be given to the charity officially

Show Suggested Answer

Suggested Answer: A, C, E

by Jesusita at May 04, 2022, 05:23 AM

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5 months ago

I'm a little confused on this one. I know the production plan is important for financial planning, but I'm not sure which of these specific uses is correct. I'll have to review my notes and try to eliminate the options that don't seem quite right.

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