CIMA Exam CIMAPRA17-BA2-1 Topic 1 Question 71 Discussion

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

Question #: 71
Topic #: 1

[All CIMAPRA17-BA2-1 Questions]

A product has a break-even point of 40,000 units and a margin of safety of 20%. The contribution per unit is 3.

What is the budgeted profit?

A8,000

B24,000

C30,000

D40,000

Show Suggested Answer

Suggested Answer: B

by Rozella at May 18, 2024, 04:04 AM

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Destiny

2 days ago

Option D, 40,000? Really? That seems way too high. I think I'll go with C, 30,000. It just makes more sense to me.

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Aha! I've got it. The correct answer is C, 30,000. I just need to do the math: 40,000 units - (40,000 * 0.2) = 32,000 units, and 32,000 * 3 = 96,000, so the budgeted profit is 96,000 - 66,000 = 30,000.

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Merrilee

11 days ago

I'm not too sure about this one. The break-even point is 40,000 units, but the question is asking for the budgeted profit. I'm going to have to think this through a bit more.

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Quiana

16 days ago

Hmm, I'm going to go with option B. 24,000 seems like the right answer since the margin of safety is 20% and the contribution per unit is 3.

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Jacqueline

8 hours ago

I think the break-even point is 40,000 units.

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Dominic

17 days ago

I'm not sure. Can someone explain how the margin of safety affects the budgeted profit?

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Lennie

18 days ago

I agree with Vonda. The margin of safety is 20%, so the budgeted profit should be 20% of the break-even point.

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Vonda

20 days ago

I think the answer is B) 24,000.

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CIMA Exam CIMAPRA17-BA2-1 Topic 1 Question 71 Discussion

Contribute your Thoughts:

Destiny

Shay

Merrilee

Quiana

Jacqueline

Dominic

Lennie

Vonda