CIMA Exam CIMAPRA19-P03-1 Topic 6 Question 59 Discussion

Actual exam question for CIMA's CIMAPRA19-P03-1 exam

Question #: 59
Topic #: 6

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 Refugia at Sep 14, 2024, 12:08 PM

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Michal

2 months ago

Hmm, I'm feeling a bit like a detective here. This whole thing sounds a bit fishy, but at least the food's going to a good cause. I'd say C, D, and E are the way to go - streamline the process, get the manager on board, and make it all legit. Just don't forget to keep an eye on that guy, you know?

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Melynda

19 days ago

E) Instigate a process whereby edible but unsellable items can be given to the charity officially

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Gail

21 days ago

D) Instigate a confidential but documented review with the production manager and tell him to stop

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Herman

1 months ago

C) Instigate a review of the production process to potentially reduce the amount of wastage.

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Raymon

2 months ago

But we need to follow the correct procedures. We could instigate a review of the production process to reduce wastage.

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Ronny

2 months ago

Definitely don't do nothing! The manager is totally mishandling this situation. I'd go with A, D, and E - disciplinary action is a must, but you gotta give him a chance to correct it too. Might as well make it official while you're at it, right?

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Lezlie

2 months ago

E) Instigate a process whereby edible but unsellable items can be given to the charity officially

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Josphine

2 months ago

D) Instigate a confidential but documented review with the production manager and tell him to stop

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Aleisha

2 months ago

A) Instigate disciplinary action this is both theft and poor management

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Johna

2 months ago

I disagree. We should do nothing. It's for a good cause and the amount is insignificant.

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Raymon

3 months ago

I think we should instigate disciplinary action. It's theft and poor management.

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Jess

3 months ago

Whoa, this is a tricky one! The production manager's shady dealings need to be addressed, but doing nothing seems like it could lead to bigger problems down the line. I'd say a combination of C, D, and E is the way to go - tighten up the process, have a frank talk with the manager, and set up an official channel for the donations.

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Adaline

2 months ago

E) Instigate a process whereby edible but unsellable items can be given to the charity officially

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Margarett

2 months ago

D) Instigate a confidential but documented review with the production manager and tell him to stop

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Janet

2 months ago

C) Instigate a review of the production process to potentially reduce the amount of wastage.

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