APICS Exam CPIM Topic 1 Question 95 Discussion

Actual exam question for APICS's CPIM exam

Question #: 95
Topic #: 1

[All CPIM Questions]

An income statement of a company is as follows:

Profit has been increased by 60% to get the in profit by 600,000 by increasing revenue; sales would have to increase to 1.2 million. What will happen with CGS?

ADecrease by 3%

BIncrease by 4%

CDecrease by 4%

DWill remain same

Show Suggested Answer

Suggested Answer: A

by Ellsworth at Aug 22, 2024, 08:48 AM

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Valene

28 days ago

Alright, time to put on my accountant hat. If revenue goes up by 1.2 million and profit goes up by 600,000, then CGS must have gone down. C all the way, baby!

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Gracie

5 days ago

I think you're right, C seems like the correct answer.

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Jerilyn

1 months ago

Hmm, I'm sensing a trick question here. What if the company just decided to throw money at the problem and increase everything by 4%? Wouldn't that work too? Oh, the joys of corporate finance...

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Jamey

1 months ago

I'll go with C on this one. Decrease by 4%. Gotta love these cost-cutting exercises, am I right? Saves the company a bundle!

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Minna

4 days ago

I'm with you on this one, I also think it's A. Decrease by 3%. Cost-cutting exercises can definitely help boost profits.

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Lucy

5 days ago

I disagree, I believe the answer is A. Decrease by 3%. If profit increased by 60%, it would make sense for cost of goods sold to decrease.

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Deeann

6 days ago

I think the answer is B. Increase by 4%. It makes sense that if profit increased, cost of goods sold would also increase.

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Quentin

2 months ago

Wait, if revenue increases by 1.2 million and profit increases by 600,000, that means the cost of goods sold (CGS) must have decreased. Simple math, folks!

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Markus

15 hours ago

D) Will remain same

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Shelia

6 days ago

That's correct! When revenue increases and profit increases, it means the cost of goods sold must have decreased.

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Jenelle

1 months ago

A) Decrease by 3%

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Jackie

2 months ago

Okay, so we need to increase profit by 600,000 and revenue by 1.2 million. Seems like CGS needs to decrease to maintain the 60% profit increase. Looks like C is the correct answer.

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