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CIMAPRA17-BA2-1 Exam - Topic 1 Question 35 Discussion

A company produces a single product for which the following cost data are available.Analysis by the management accountant has shown that 100% of direct material cost and 50% of direct labour cost are variable costs. 50% of production overhead and 100% of selling and distribution overhead are variable costs.What is the marginal cost per unit?
B) $7
A) $6
C) $8
D) $9

CIMAPRA17-BA2-1 Exam - Topic 1 Question 35 Discussion

Actual exam question for CIMA's CIMAPRA17-BA2-1 exam
Question #: 35
Topic #: 1
[All CIMAPRA17-BA2-1 Questions]

A company produces a single product for which the following cost data are available.

Analysis by the management accountant has shown that 100% of direct material cost and 50% of direct labour cost are variable costs. 50% of production overhead and 100% of selling and distribution overhead are variable costs.

What is the marginal cost per unit?

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Suggested Answer: B

by Rhea at May 30, 2022, 07:05 PM

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Ashton
10 months ago
Wait, are we sure about those percentages?
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Gary
10 months ago
I agree, $8 makes sense with those overheads.
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Evette
10 months ago
Not sure about that, seems high.
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Maryann
11 months ago
I think the marginal cost is $8.
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Jennifer
11 months ago
Direct material is fully variable, right?
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Ilona
11 months ago
If I remember right, we need to add up all the variable costs per unit. I think I got $8, but I might have missed something.
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Eura
11 months ago
I remember a practice question where we had to separate fixed and variable costs, but I can't recall the exact percentages for overheads.
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Rory
11 months ago
I think the marginal cost is mostly about variable costs, but I'm not sure if I calculated the overheads correctly.
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Kristofer
11 months ago
I feel like the selling and distribution overheads play a big role here, but I’m uncertain about how to apply the percentages to the total costs.
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Tammara
11 months ago
Hmm, I'm a bit unsure about this one. I know drug screening is a sensitive topic, so I'll need to carefully consider the legal and ethical implications of each option.
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