CIMAPRA17-BA2-1 Exam - Topic 2 Question 77 Discussion

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

Question #: 77
Topic #: 2

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?

A$6

B$7

C$8

D$9

Show Suggested Answer

Suggested Answer: B

by Adaline at Aug 02, 2024, 06:34 AM

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Bonita

8 months ago

Definitely $7, I did the calculations!

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Ammie

8 months ago

Wait, how can selling overhead be fully variable?

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Selma

8 months ago

Not sure about that, could be $9 instead.

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Long

8 months ago

I think the marginal cost is $8.

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Claribel

9 months ago

Direct material is fully variable, right?

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Estrella

9 months ago

I’m leaning towards option C, $8, but I’m not entirely confident. I hope I calculated the variable costs right!

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Bernadine

9 months ago

I feel like I might be mixing up the percentages for direct labor and overheads. Did we apply the same percentages in our practice questions?

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Olen

9 months ago

I think we practiced a similar question where we had to calculate variable costs. If I recall, we need to add up the variable portions of each cost category.

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Oretha

9 months ago

I remember that marginal cost includes only variable costs, but I'm not sure how to break down the overheads correctly.

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Carlee

9 months ago

Okay, I think I've got this. I just need to apply the given variable cost percentages to each cost item and sum them up. Should be a quick calculation.

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Karl

9 months ago

Hmm, I'm a bit confused by the variable cost percentages. I'll need to carefully break down each cost component to figure out the right marginal cost.

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Myrtie

9 months ago

This looks like a straightforward cost accounting problem. I'll need to identify the variable costs and calculate the marginal cost per unit.

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Pamella

10 months ago

This seems tricky, with all the different cost categories. I better double-check my work to make sure I don't miss anything.

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Izetta

10 months ago

Hmm, I'm not totally sure about this one. I'm debating between A and D. I'll have to think it through carefully to decide which one is correct.

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Arlie

2 years ago

Haha, this reminds me of the time my accountant friend tried to explain marginal cost to me. I just nodded and smiled, but secretly had no idea what he was talking about. Looks like I'm not the only one struggling with this!

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Xenia

2 years ago

I agree with Jody, C) $8 makes sense when you factor in all the variable costs.

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Geraldine

2 years ago

Hmm, this is a tricky one. I'm going to go with C) $8 just to be safe. Can't be too sure with these management accounting questions!

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Arletta

2 years ago

Let's see if we can figure this out together. I think it might be D) $9.

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Lura

2 years ago

I agree with you, I also believe it's C) $8.

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Buffy

2 years ago

I'm leaning towards A) $6 as the marginal cost per unit.

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Carey

2 years ago

I think the answer is B) $7.

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Jody

2 years ago

I believe it's C) $8 because we need to consider both variable and fixed costs.

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Jordan

2 years ago

D) $9 seems more accurate to me. The variable costs add up to a higher amount than $7.

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Miss

2 years ago

Yes, $9 makes sense considering the breakdown of variable costs provided.

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Miss

2 years ago

I think you're right, $9 does seem more accurate based on the variable costs.

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Isabella

2 years ago

I think the answer is B) $7. The variable costs are made up of 100% of direct material cost and 50% of direct labor cost, plus 50% of production overhead and 100% of selling and distribution overhead.

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