CIMA Exam CIMAPRO19-P01-1 Topic 9 Question 88 Discussion

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

Question #: 88
Topic #: 9

You are a management accounting working for a car manufacturer. The company is publicly listed and has been around for many years.

The company produces 2 products. Car 1 and Car 2. Car 1 sells for 20,000 and Car 2 for 27,000.

Car 1 can be upgraded post production to the 1ZC model for 5,000 and Car 2 to the 2ZC model for 3,500.

Post production upgrade the 1ZC sells for 25,500 and the 2ZCfor 30,000.

The company sources all of its supplies for the same supplier and has access to a large workforce. As a result there are no bottlenecks or limiting factors to production.

Based on the information above the company should...

AUpgrade both models

BUpgrade Car 1 but not Car 2

CUpgrade Car 2 but not Car 1

DKeep both Cars as base models

Show Suggested Answer

Suggested Answer: A, B, C

References:

by Cordelia at May 22, 2024, 12:25 AM

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Rhea

10 days ago

Upgrade both models? Sounds like a no-brainer to me. The extra revenue from the upgraded models more than makes up for the upgrade cost.

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Dyan

16 days ago

I believe we should upgrade Car 1 but keep Car 2 as base model to maintain a balance.

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Kimberely

17 days ago

I disagree, upgrading both models might not be cost-effective in the long run.

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Leila

20 days ago

I think we should upgrade both models to increase sales.

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