CIMA Exam CIMAPRA17-BA2-1 Topic 1 Question 76 Discussion

Actual exam question for CIMA's CIMAPRA17-BA2-1 exam

Question #: 76
Topic #: 1

[All CIMAPRA17-BA2-1 Questions]

A company can increase its margin of safety by which of the following independent actions?

(a) Increasing sales and production

(b) Raising the selling price per unit

(d) Lowering fixed costs

A(a) and (b) only

B(a), (b) and (c) only

C(a), (b) and (d) only

D(a), (c) and (d) only

Show Suggested Answer

Suggested Answer: B

by Vinnie at Jul 18, 2024, 05:29 AM

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Gerry

5 days ago

Hmm, this is a tricky one. I'm leaning towards (a), (b), and (d) as the correct answer. Lowering fixed costs is a classic way to improve margin of safety. Although, I did once have a manager who tried to increase variable costs - let's just say it didn't end well for him.

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Lasandra

6 days ago

Increasing sales and production seems like the obvious choice to me. More units sold means a higher margin of safety. Raising prices is also a good option, but I'm not sure about increasing variable costs - that just seems counterintuitive.

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