CIMA Exam CIMAPRA17-BA2-1 Topic 2 Question 83 Discussion

Actual exam question for CIMA's CIMAPRA17-BA2-1 exam

Question #: 83
Topic #: 2

A company operates an integrated standard cost accounting system. The standard price of raw material A is $20 per litre. At the start of period 1, the inventory of 500 litres of raw material A was valued at $20 per litre. During period 1, 100 litres of raw material A were purchased at an actual price of $21 per litre. During period 2, 550 litres of raw material A were issued to Job 789.

In respect of the above events, which TWO of the following statements are correct? (Choose two.)

AThe raw material inventory at the end of period 1 should include 100 litres valued at $21 per litre.

BAn adverse material price variance should be recorded in the statement of profit or loss for period 1.

CThe raw material inventory at the end of period 2 should be valued at $20 per litre.

DAn adverse material price variance should be recorded in the statement of profit or loss for period 2.

EThe first 500 litres of raw material A issued should be debited to the Job 789 account at $20 per litre, and the remaining 50 litres at $21 per litre.

Show Suggested Answer

Suggested Answer: D, E

by Raymon at Sep 17, 2024, 06:00 AM

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Avery

22 days ago

Haha, this question is a real head-scratcher! I'm going with B and E, but I might have to phone a friend on this one.

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Rutha

7 days ago

I think B is correct because the actual price of $21 per litre is higher than the standard price of $20 per litre.

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Mitsue

25 days ago

Ah, I got it! The answers are B and E. The price variance should be recorded in period 1, and the job should be debited accordingly. Easy peasy!

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Kayleigh

26 days ago

Hmm, this is a tricky one. I'm leaning towards B and C, but I'm not 100% sure.

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Merrilee

28 days ago

Hold up, I'm pretty sure the correct answers are B and E. The job should be debited at the different prices, and the price variance should be recorded in period 1.

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Viola

1 months ago

I'm a bit confused, but I think B and D are the correct options. There should be an adverse price variance in both periods, right?

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Nadine

2 days ago

So, it makes sense that both period 1 and period 2 would have adverse material price variances recorded.

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Erinn

5 days ago

Yes, that's correct. The actual price of $21 is higher than the standard price of $20, leading to an adverse variance.

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Timothy

17 days ago

I think you're right, both B and D seem to be correct. The price variance should be adverse in both periods.

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Kasandra

1 months ago

I'm pretty sure C and E are the right answers here. The inventory at the end of period 2 should be valued at the standard price, and the job should be debited with the different prices.

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Janna

1 months ago

I'm not sure about statement B and D. Do you think we should record an adverse material price variance in both periods?

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Lorrine

1 months ago

I agree with you, Avery. I also think statement E is correct because the first 500 litres should be debited at $20 per litre.

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Gail

1 months ago

I think the correct answers are B and E. The adverse price variance should be recorded in period 1, and the job should be debited with the different prices accordingly.

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Lavina

7 days ago

I agree, the adverse price variance should definitely be recorded in period 1.

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Avery

2 months ago

I think statement A is correct because the raw material inventory at the end of period 1 should include the 100 litres purchased at $21 per litre.

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