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Cima Essay

3456 words - 14 pages

CIMA Gateway Assessments Post Exam Guide May 2012 General Comments The paper was reasonably well attempted by some candidates, the A1 candidates achieving the best average mark overall. However, the performance of many candidates was quite poor. It is advised that candidates familiarise themselves with the content of the syllabus and ensure that they acquire the relevant study materials. They should also ensure that adequate time is spent in preparation for the examination. It was evident from the marking process that many candidates were ill prepared for the examination. SECTION A – 75 MARKS ANSWER ALL THREE QUESTIONS

Question 1

(a) Prepare a statement showing the difference in ...view middle of the document...

Suggested Approach Part (a) requires candidates firstly to calculate average inventory under the current system and then production costs under both the current and proposed systems. Parts (b)(i) and(ii) are straightforward learning curve calculations which feed into the contribution statement in part (iii). Finally, candidates should explain the principle of Kaizen costing, then, using their answer to part (iii), show how RTY may use this principle to increase contribution.

© The Chartered Institute of Management Accountants 2012

Page 1

CIMA Gateway Assessments Post Exam Guide May 2012

Marking Guide (a) Calculation of average inventory Calculation of turnover or statement that it is irrelevant Calculation of production costs ($9,045,000) Calculation of inventory holding cost ($80,000) Calculation of JIT production costs: Quarter 1 ($1,540,000) Quarter 2 ($2,440,000) Quarter 3 ($2,736,000) Quarter 4 ($2,554,000) Comparison of profits (b) (i) Calculation of average labour cost ($460,827) (ii) Calculation of total for 7 batches ($3,367,469) Calculation of total for 8 batches ($3,686,616) th Calculation of cost for 8 batch ($319,147) (iii) Calculation of total labour cost ($4,324,910) Calculation of direct material cost ($1,800,000) Calculation of variable overhead cost ($1,200,000) Calculation of sales revenue ($7,500,000) Calculation of contribution ($175,090) (iv) Continuous review of processes Small incremental changes leading to cost savings Employee involvement Size of cost reduction required to achieve target (4%) Conclusion Maximum marks awarded


2 1 1 1 1 2 2 2 1 (max 10)


1 1 1

2 0.5 0.5 1 1

1 1 1 1 1 25

Lead Marker's Comments G1 candidates performed surprisingly poorly in this question which was disappointing. The A1 candidates performed the best, achieving an average mark of just below 50%. Candidates again struggled with applying the learning curve formula as they have with past questions. Candidates also had difficulty with the part inventory calculation and the move to JIT.

© The Chartered Institute of Management Accountants 2012

Page 2

CIMA Gateway Assessments Post Exam Guide May 2012

Question 2 (a) Discuss what will be involved in the initiation stage of the stadium construction project and explain what should be included in the project initiation document. (10 marks) Rationale This question requires candidates to be familiar with what is involved in the initiation stage of a project and then develop to explain what should be included in a project initiation document. It examines learning outcome B1(d) 'Identify the characteristics of each phase in the project process'. Suggested Approach Answers should first discuss what is involved in the initiation stage of a project and then develop to explain what should be included in the project initiation document (PID). Good answers will include reference to aspects of the project outlined in the scenario. Marking Guide What is...

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