[Cath]

Hi, Thanks for your question and im afraid there are two absolute valid ways to calculate planning & operational level variances that give two different answers.
I believe the one in our Open Tuition videos was cited as CIMA’s preferred method – however, I do also think that CIMA exam questions would be written with the awareness that two valid methods exist so would ask a question that would not contradict either.
Hope that helps

[Cath]

Hi There has been no major change in syllabus for CIMA BA Cert l;evel since 2017. The CIMA website is still listing that version of the syllabus as current.
Im aware that the CIMA main qualification operational level etc is due an update later this year – but I dont think that CIMA BAcert is included in that (its all to be revealed by CIMA sometime soon).
Therefore any textbook materials etc that you have should still be in date so long as post-2017.
Many Thanks

[Cath]

Super & thank you for your question

[Cath]

Hi there,
This is an exceptionally long question and you will not see such detail in the CIMA P2 objective test exam.
If you do need help with a CIMA style question – please post the answer and let me know which bit you do not follow/ understand (I will then be able to target that area rather than answer the entire question).
Thanks

[Cath]

Hi there – this is quite a straight forward breakeven calculation so I do suggest you watch the videos provided by Open tuition.

Reminder of formula

Breakeven point in units = Fixed costs/ contrib per unit.

C/S ratio = contribution per unit / sale price per unit

Target profit = Fixed costs + Target amount/ contrib per unit

Preparation of statement of profit and loss would not be required in a CIMA BA2 multiple choice exam.

[Cath]

Hi,
Hoping you have passed this exam.

As an Open Tuition tutor, I dont have access to the mock exams from other tuition providers such as Astranti.

However, all practice is good practice.

Dont forget to use the CIMA authored practice assessment on the Pearson website ( thats the only one written by CIMA themselves – there is one for every subject).

[Cath]

For this one we compare the making cost ( the manufacturing in house cost – not including the fixed overhead)
to the supplier buy in price

So we compare
Dim $2 vs $2.5 – so making in house is cheaper
Dom $5 vs $4 – so buying from supplier is cheaper
Dem $3 vs $4- so making in house is cheaper.

Main principle here is we ignore general fixed overhead in relevant costing situations because if we decide to buy in (the fixed cost will not be saved).

Hope thats ok

[Cath]

Hi, Sorry for the delay and definitely a weird format question.

So the principles of sensitivity is that its the change in variables needed to ‘reverse’ the decision.

Im assuming you are happy that, initially the EV of the project is positive (0.4*!50k) _ (0.6*-80k) = 12k positive (accept)

If the EV drops to zero then thats the point where we would start to reverse the decision.

So we need to find a probablity of earning the 150,000 that is exactly netted off by the result of probability of earning (80k).

The values of 150k and (80K) loss dont change.
Also remember in a two-situation outcome then probabilities have to add up to 100%

So that fancy formula above calculates that

34.78% * 150,000 = 5,217,000

then the loss probability (100 – 34.78 = 65.22%)

65.22% * (80,000) = approx the same (5,217,600)

Therefore making a loss and change of decision.

ITs not working out exactly as zero due to rounding so presumably the question asked for the closest full percentage point or similar ( hence the answer is 35%)

Overall though id say dont worry about that one too much – it’s an unusual question format! 🙂

[Cath]

Hi – Thanks for your question.

Presumably you were given a model answer in the book? Can you tell me what the answer says and which part you need explaining? (this is better than me writing it all out).
Many thanks

[Cath]

Hi there,
Thank you for your question but unfortunately as tutors we can not answer test-type questions such as this ( we dont want to be providing a service where we simply answer homework for students).

We are always happy to help, but this tutor forum operates best when you post the answer from which ever source you obtained the question above- then you explain why you disagree or dont understand the answer provided to you, so that the Open Tuition tutors can help to resolve your particular aspect of misunderstanding.

Please reply to this post with the answer to the question above and let me know some more detail as to why it is causing you doubt.

Thanks
Cath

[Cath]

Hi,
Thanks for your question but this is a CIMA P1 forum and investment appraisal (eg payback period etc) has moved from the P1 syllabus when it updated in 2019.

This topic is now on CIMA P2 syllabus so if you are preparing for the P1 exam please ensure your study materials are up-to-date for the current syllabus

Thanks
Cath

[Cath]

You’re welcome + great to help,
Cath

[Cath]

Hi,
Im afraid we are unable to confirm when those videos will be added.
However, those topics are all dealt with in similar respects to CIMA P2 assessments by ACCA papers FM and AFM ( sometimes referred to as ACCA F9 and P4).

Here is a link to John from Open Tuition explaining value-at-risk for this purpose.

https://www.youtube.com/watch?v=4T-vwZHDaAs

Hope that helps
Thanks
Cath

[Cath]

This is because the overhead costs are released to the profit and loss account only when the product is sold, so sales income is matched with costs.

The other option would be marginal cost where overheads are invoiced in each period. Meaning that in months of high production – large overhead deductions will be made from profits, even though the products are not necessarily sold that period ( can be stocking up for next season)l
Deducting all the costs in full in the period can cause swings in profit .

Hope thats ok & thanks for you question
Cath

[Cath]

Hi,
Thanks for your question.
Im not quite sure what you mean. There is no need to work out the debit & credits for job costing for CIMA BA2.
Instead you need an understanding of the principles in that only the material and labour + overhead costs that relate to the job will be collected and transferred to find the job cost.

If its the basic principles you need (and its CIMA BA2 syllabus orientated) then our BA2 lectures will help.

Otherwise, I dont believe the journal entries are needed for BA2.

Many Thanks
Cath

[Cath]

Hi,
Im afraid we cant answer that in the CIMA P2 forum.
CIMA P2 is the lead paper in the management case study, but as far as I know all areas of P2, F2 and E2 are potentially examinable.

I dont advise question spotting, but if you were trying to pin down the most-examined areas then an analysis of past MCS recent exams (available on CIMA website) would be a good place to start.

Using these you will notice patterns of frequently examined vs rarely examined areas to help you to focus. The past exams available by CIMA also include lengthy examiners reports which can hold some clues as to what the markers are looking for etc.

Hope that helps
Cath

[Cath]

Hi Jacobi,
thanks for your question.
Im afraid because CIMA is a computerised objective test bank of questions (created in 2019 and 60 randomly assigned questions, in syllabus weighting per exam) there are not any past-papers.

We advise you to obtain a Cima-approved exam kit, such as Kaplan/ BPP/ or another publisher to practice questions. You dont need the latest version of these exam kit books, anything from 2019 will be current syllabus, so second hand market place versions are fine.

CIMA themselves have for sale some practice electronic questions that they have authored:
https://cimastudy.com/cima-levels/aptitude

Apart from that there is only one free resource that CIMA have officially published & that is the Pearson Vue practice exam. There is one for each paper & it does give you a % score at the end (link is below)

https://home.pearsonvue.com/cima/questiontutorials
Hope that helps & you have been finding Open Tuition resources and practice questions of use also.
Cath

[Cath]

Hi, Thanks for your question.
First thing to say is thet investment appraisal techniques have been removed from CIMA P1 syllabus since 2019.
Also all CIMA questions in dollars (not £s) so Im thinking this is not a CIMA P1 specific question.

If youd like to gain more insight over investment appraisal techniques – you could watch the relevant section in the CIMA P2 video have available (this area is on the CIMA P2 syllabus)

However, incase it helps you, ive done a quick calc ( yr0 value of the investment being £60,000 then reducing every year by 25% reducing balance) – ive got the end of year 4 balance to be £18,984 so according to the text you have posted above, in year five we are disposing of it for £4,000. This leaves a balancing allowance of £14,984 which with a tax rate of 35% you will have a tax saving in year 5 of £5244 (£14,984 *0.35). So I do agree with you – I cant see where a figure of £7500 has come from.
I hope this helps
Cath

[Cath]

Hi – thanks for your question & hope you are enjoying our CIMA resources.
We dont generally answer questions directly like this – previously we have been used as a homework-resource, where students post the full question and expect us to answer.
We assume you will have an answer in your textbook and you may then have a query or clarification needed based on the answer given.

This seems very long for a CIMA BA2 question also- plus CIMA questions all in dollars – so not sure about the RM currency.
However, top tips to approach this question will be that only the future, INCREMENTAL costs and savings will be relevant.
So when you create your NPV calculation ( please use the videos for BA2 – ch19) make sure you only include the cashflows such as the 50 pence saving on the variable cost for example RM3 less 2.50 ( not the full RM2.50)
Hope that helps
Cath

[Cath]

Hi,
Thanks for your query,
I can see your thinking – but its more that a decision whether to accept the contract.
Eg compare the average expected value of the different demand levels to see which contract level is worthwhile.
So the demand cant be predicted – but the contract quantity has to be agreed in advance.
Hope that makes sense + also this should be covered by the P2 recorded videos for a full working.
Many Thanks
Cath

[Cath]

Hi – this is a duplicate post, please see other response (this requires more info + is unclear what help you need from this alone) Thanks

[Cath]

Hi, Im not quite sure what you are asking.
This forum (with the current date of Nov2022 would be applicable to FireWorks preseen operational case study scenario) so you would not be asked about this type of situation without application to the current preseen.

Id like to help and I perceive this must be a relevant costing question, but even so – Im sorry but I cant follow the post as it stands.

Presumably you have an answer available to you in the same textbook you have found the above.
This guidance on this forum works best when you post the question AND the answer + let me know what aspect you dont follow or need further explanation.

Hope thats ok + please post again with an update if you need further help.
Thanks
Cath

[Cath]

Hi, really sorry but this forum is for CIMA students only. This question is not reflective of the CIMA BA2 syllabus or exam style + so is not applicable here.
Thanks
Cath

[Cath]

Hi Khawa,
Im afraid I cant help you with this question.
This is not a CIMA exam standard question for the current P2 syllabus. The length and nature (linking to working capital) does not fit with the P2 syllabus.
Therefore there is no need for you to worry about solving this.

Please note for future, that have had some students who post us the accounting homework problems and expect us to solve them – which is not a service we can realistically provide.
Therefore, please ensure that all questions are current and CIMA standard ( short objective style and from recent 2019+ exam material). Also, it is presumed that you will have a solution provided to you with the source of the question (eg in the back of the question book etc)., so it saves time if you can share this answer and then specifically detail which part of the answer/ workings that you can not understand.
This targeted approach to learning & problem solving is where this forum adds the most value to CIMA students,
Many Thanks
Cath

[Cath]

Hi Khawa,
Im afraid I cant help you with this question.
This is not a CIMA exam standard question for the current P2 syllabus. The length and nature (linking to working capital) does not fit with the P2 syllabus.
Therefore there is no need for you to worry about solving this.

Please note for future, that have had some students who post us the accounting homework problems and expect us to solve them – which is not a service we can realistically provide.
Therefore, please ensure that all questions are current and CIMA standard ( short objective style and from recent 2019+ exam material). Also, it is presumed that you will have a solution provided to you with the source of the question (eg in the back of the question book etc)., so it saves time if you can share this answer and then specifically detail which part of the answer/ workings that you can not understand.
This targeted approach to learning & problem solving is where this forum adds the most value to CIMA students,
Many Thanks
Cath

[Author]

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