CIMA Exam CIMAPRA17-BA2-1 Topic 1 Question 76 Discussion

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

Question #: 76
Topic #: 1

[All CIMAPRA17-BA2-1 Questions]

A company can increase its margin of safety by which of the following independent actions?

(a) Increasing sales and production

(b) Raising the selling price per unit

(d) Lowering fixed costs

A(a) and (b) only

B(a), (b) and (c) only

C(a), (b) and (d) only

D(a), (c) and (d) only

Show Suggested Answer

Suggested Answer: B

by Vinnie at Jul 18, 2024, 05:29 AM

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Beckie

1 months ago

Ah, the age-old question of how to increase margin of safety. I'd go with (a), (b), and (d) - boost sales, hike prices, and cut fixed costs. Gotta love those classic, tried-and-true methods. Although, I did hear about one company that tried to increase their margin of safety by hiring a team of acrobats to do backflips during the sales pitch. Didn't quite have the desired effect, but you've got to admire the creativity!

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Vilma

2 days ago

Yeah, creativity is great, but sometimes sticking to the basics is the way to go when it comes to increasing margin of safety.

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Dean

3 days ago

Hiring acrobats for a sales pitch? That's definitely a unique approach, but probably not the most practical!

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Sabra

1 months ago

I agree, (a), (b), and (d) seem like the most effective ways to increase margin of safety.

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Chanel

2 months ago

I'm pretty sure the correct answer is (a), (b), and (d). Increasing sales and production, raising the selling price, and lowering fixed costs - that's the trifecta of margin safety improvements. Although, I did hear a rumor that one company tried to raise their margin of safety by offering free donuts to customers. Didn't quite work out as planned, I hear.

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Kami

25 days ago

I heard about the free donuts strategy too, sounds like a risky move that didn't pay off.

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Laurena

1 months ago

Yeah, those actions would definitely help improve the company's financial stability.

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Filiberto

1 months ago

I think you're right, (a), (b), and (d) seem like the best options for increasing margin of safety.

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Ardella

2 months ago

Aha! I know this one. The answer is (c), raising the variable cost per unit. Just kidding, that's clearly not the right way to increase margin of safety. I'd go with (a), (b), and (d) - increase sales, raise prices, and cut fixed costs. Simple as that!

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Xuan

6 days ago

I'm not sure about that. I think (a), (b) and (c) - increasing sales, raising prices, and raising variable costs would be more effective.

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Salome

16 days ago

Hmm, I see your point. But I still think it's (a) and (b) only. Increasing sales and raising prices should do the trick.

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Flo

20 days ago

No, I disagree. I believe it's (a), (b) and (d) - increasing sales, raising prices, and cutting fixed costs.

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Roy

24 days ago

I think the answer is (a) and (b) only - increasing sales and raising the selling price per unit.

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Gerry

2 months ago

Hmm, this is a tricky one. I'm leaning towards (a), (b), and (d) as the correct answer. Lowering fixed costs is a classic way to improve margin of safety. Although, I did once have a manager who tried to increase variable costs - let's just say it didn't end well for him.

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Marleen

1 months ago

I agree. Increasing sales and production, raising the selling price per unit, and lowering fixed costs seem like the best options.

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Marleen

1 months ago

I think you're right. Lowering fixed costs is definitely a good way to increase margin of safety.

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Lasandra

2 months ago

Increasing sales and production seems like the obvious choice to me. More units sold means a higher margin of safety. Raising prices is also a good option, but I'm not sure about increasing variable costs - that just seems counterintuitive.

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