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CIMA Exam CIMAPRA17-BA2-1 Topic 1 Question 63 Discussion

Actual exam question for CIMA's CIMAPRA17-BA2-1 exam
Question #: 63
Topic #: 1
[All CIMAPRA17-BA2-1 Questions]

A company which manufactures and sells one product has fixed costs of $80,000 per period. The selling price per unit of $25 generates a contribution/sales ratio of 40%.

How many units would need to be sold in a period to earn a profit of $10,000?

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Suggested Answer: B

by Viva at Jan 23, 2024, 04:46 AM

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Valda
1 days ago
Ooh, this looks tricky. I better double-check my work to make sure I don't end up with the wrong answer. Can't afford to lose points on this one!
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Dottie
5 days ago
This seems like a straightforward break-even analysis problem. I'll have to calculate the contribution margin per unit and the total fixed costs to find the number of units needed to reach the target profit.
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Moon
5 days ago
So, the contribution per unit is $10. We can use this to find the number of units needed to earn a profit of $10,000.
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Tamie
7 days ago
I agree. The contribution margin is 40% of the selling price.
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Moon
9 days ago
I think we need to calculate the contribution margin first.
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Jina
11 days ago
So, to earn a profit of $10,000, we need to cover the fixed costs and then make an additional $10,000.
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Fairy
16 days ago
I agree. The contribution margin is 40%.
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Jina
17 days ago
I think we need to calculate the contribution margin first.
upvoted 0 times
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