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CIMA Exam CIMAPRA17-BA2-1 Topic 1 Question 69 Discussion

Actual exam question for CIMA's CIMAPRA17-BA2-1 exam
Question #: 69
Topic #: 1
[All CIMAPRA17-BA2-1 Questions]

A company's policy is to hold closing inventory each month equal to 10% of the next month's budgeted sales volume. The budgeted sales volumes of product Q for months 1 and 2 are 1,660 units and 2,300 units respectively.

The production budget for product Q for month 1 is:

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Suggested Answer: B

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5 days ago
Given the sales volume of 1,660 units in month 1 and 230 units in closing, subtract any initial inventory to find production.
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6 days ago
Which means 230 units for month 1's closing inventory.
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17 days ago
Right, so for month 2, 10% of 2,300 units will be the closing inventory for month 1.
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23 days ago
I think we need to focus on the inventory policy. Holding 10% of next month's sales is key.
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29 days ago
This production budget question is tricky. I'm not sure how to start.
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