CIMA Exam CIMAPRO19-P01-1 Topic 5 Question 86 Discussion

Actual exam question for CIMA's CIMAPRO19-P01-1 exam

Question #: 86
Topic #: 5

Which THREE of the following are advantages of activity-based costing (ABC), in a multi-product environment, when compared with traditional absorption costing?

AABC provides a better understanding of overhead costs.

BABC provides more accurate product costs in a complex business environment.

CABC is cheaper to operate.

DABC results in increased unit profit for each product.

EABC leads to better product pricing decisions.

Show Suggested Answer

Suggested Answer: A, B, C

References:

by Pilar at Apr 27, 2024, 07:44 PM

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Devora

1 months ago

I heard ABC stands for 'Absolutely Brilliant Costing' method. No wonder it's so popular!

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Marion

3 days ago

Yes, it also gives more accurate product costs in a complex business environment.

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Adelle

19 days ago

I agree, ABC does provide a better understanding of overhead costs.

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Precious

1 months ago

D? Really? Increased unit profit for each product? That's a bit of a stretch. A, B, and E are the clear winners here.

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Ciara

1 months ago

I'm not sure about C. Isn't ABC generally more expensive to implement? Regardless, A, B, and E are definitely the right answers.

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Jenelle

7 days ago

Yes, and it also gives more accurate product costs in a complex business environment.

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Erick

21 days ago

I think you're right, ABC does provide a better understanding of overhead costs.

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Shawnda

1 months ago

I agree, A, B, and E are the way to go. ABC is a lot more accurate than traditional costing, which is crucial in today's environment.

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Carlene

27 days ago

It's important to have accurate product pricing decisions in a complex business environment.

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Lezlie

1 months ago

ABC does provide a better understanding of overhead costs and more accurate product costs.

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Kristin

1 months ago

I think A, B, and E are definitely advantages of activity-based costing.

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Avery

2 months ago

A, B, and E seem like the obvious choices here. ABC is great for understanding overhead and making better pricing decisions in a complex business.

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Elke

26 days ago

ABC really helps with understanding overhead costs and making better pricing decisions.

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Pamela

27 days ago

I agree, A, B, and E are definitely the advantages of activity-based costing.

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Matthew

3 months ago

I believe D is also an advantage of ABC, as it can result in increased unit profit for each product.

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Billye

3 months ago

I agree with Barrie. ABC helps in understanding overhead costs and making better product pricing decisions.

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Barrie

3 months ago

I think A, B, and E are advantages of ABC.

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