CIMA Exam CIMAPRO19-P01-1 Topic 3 Question 96 Discussion

Actual exam question for CIMA's CIMAPRO19-P01-1 exam

Question #: 96
Topic #: 3

QR uses an activity based budgeting (ABB) system to budget product costs. It manufactures two products, product Q and product R. The budget details for these two products for the forthcoming period are as follows:

The total budgeted cost of setting up the machines is $74,400.

Select TWO potential benefits of using an activity based budgeting system.

AActivity based budgeting allows the ranking of activities and the determination of how limited resources should be allocated across competing activities.

BActivity based budgeting provides a clear framework for understanding the link between turnover and the level of activity.

CActivity based budgeting is useful for the review of quality systems utilization.

DActivity based budgeting allows the identification of value added and non-value added activity and ensures that any budget cuts are made to non-value added activities.

Show Suggested Answer

Suggested Answer: C

References:

by Veta at Sep 08, 2024, 12:50 PM

Limited Time Offer

25%

Off

Get Premium CIMAPRO19-P01-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Maryanne

2 days ago

I believe B could also be a potential benefit. Understanding the link between turnover and activity level is crucial for effective budgeting.

upvoted 0 times

...

Nicholle

3 days ago

I agree with you, Leonard. A and D make sense because they help in allocating resources efficiently and identifying non-value added activities.

upvoted 0 times

...

Leonard

12 days ago

I think the potential benefits of using an activity based budgeting system are A and D.

upvoted 0 times

...