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CIMAPRA17-BA3-1 Exam - Topic 1 Question 11 Discussion

ABC manufactures vehicle engines and purchases components from a supplier Each engine requires one component costing $10 each ABC's supplier otters a 5% volume discount which has always been taken, this reduces the cost to $9.50 each. However, ABC has recorded the cost as $10 throughout the accounting systemOnce the correct price is recorded, what will be the effect on the factory costs incurred and the gross profit margin (GP%)?A)B)C)D)
D) Option D
A) Option A
B) Option B
C) Option C

CIMAPRA17-BA3-1 Exam - Topic 1 Question 11 Discussion

Actual exam question for CIMA's CIMAPRA17-BA3-1 exam
Question #: 11
Topic #: 1
[All CIMAPRA17-BA3-1 Questions]

ABC manufactures vehicle engines and purchases components from a supplier Each engine requires one component costing $10 each ABC's supplier otters a 5% volume discount which has always been taken, this reduces the cost to $9.50 each. However, ABC has recorded the cost as $10 throughout the accounting system

Once the correct price is recorded, what will be the effect on the factory costs incurred and the gross profit margin (GP%)?

A)

B)

C)

D)

Show Suggested Answer Hide Answer
Suggested Answer: D

by Roxane at May 05, 2022, 04:19 AM

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Selma
10 months ago
This is a classic accounting mistake, they need to fix that!
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Winfred
10 months ago
Wait, are they really recording it as $10? That seems off.
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Herschel
11 months ago
I think it might affect the gross profit margin too.
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Valentine
11 months ago
Totally agree, that will lower the factory costs!
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Rashida
11 months ago
The component cost is actually $9.50 after the discount.
upvoted 0 times
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Gussie
11 months ago
I'm feeling pretty confident about this one. The highest mitigation with the budget constraint points to option B. Enabling host build reserve and a 4-node vSAN cluster seems like the best approach.
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Claudia
11 months ago
I'm pretty confident the answer is B. The question is about a checkout requirement, so the Checkout Preferences module is the most likely place to find the setting to disable a credit card type.
upvoted 0 times
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