CIMAPRO19-P01-1 Exam - Topic 10 Question 118 Discussion

Actual exam question for CIMA's CIMAPRO19-P01-1 exam

Question #: 118
Topic #: 10

A company's initial budget for month 3 includes sales of $100,000, a contribution to sales (C/S) ratio of 40% and fixed costs of $20,000.

If the budgeted sales volume in month 3 is reduced by 5% but contribution per unit, total fixed costs and sales mix are unchanged, which of the following statements, about the change to the budgeted profit or contribution in month 3 is true?

AThe revised budgeted profit would be lower by less than 5%.

BThe revised budgeted profit would be lower by more than 5%.

CThe revised budgeted contribution would be lower by less than 5%.

DThe revised budgeted contribution would be lower by more than 5%.

Show Suggested Answer

Suggested Answer: B

by Dorcas at Oct 28, 2025, 07:07 AM

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Felix

26 days ago

Definitely more than 5%. Lower sales hit profits hard!

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Tawna

1 month ago

I feel like it could be less than 5% though. The C/S ratio helps.

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Kent

1 month ago

I think the profit will drop more than 5%.

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Candida

1 month ago

Totally agree, fixed costs impact it a lot!

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Mari

2 months ago

Wait, how can we be sure it’s more than 5%? Sounds off.

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Andra

2 months ago

Definitely lower by more than 5%, fixed costs stay the same!

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Florinda

2 months ago

I think the profit drop will be more than 5% because of fixed costs.

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Irma

2 months ago

The original sales were $100,000, so a 5% drop is $95,000 now.

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Stephaine

2 months ago

Haha, the company should have planned for a 5% reduction in sales. Rookie mistake!

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Twana

2 months ago

Wait, is this a trick question? I'm not sure I trust any of these options.

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William

3 months ago

I think I recall that fixed costs don’t change, so the profit drop might be more than the sales drop percentage. I’m leaning towards option B.

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Vallie

3 months ago

I’m a bit confused about the C/S ratio here. Does it mean that the profit drop is proportional to the sales drop?

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Golda

3 months ago

Hmm, this question seems a bit tricky. I'll have to think it through carefully.

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Miesha

3 months ago

C) The revised budgeted contribution would be lower by less than 5%.

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Theodora

4 months ago

B) The revised budgeted profit would be lower by more than 5%.

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Tracey

4 months ago

Agreed, since fixed costs stay the same, the impact is bigger.

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Lachelle

4 months ago

This question seems similar to one we practiced where we had to adjust for changes in sales. I think the contribution would drop more than 5% because fixed costs stay the same.

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Mertie

4 months ago

I remember we discussed how a decrease in sales volume affects contribution, but I'm not sure how to calculate the exact impact.

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Lucy

4 months ago

Okay, I think I've got it. If sales drop by 5%, then contribution will also drop by less than 5% since the contribution ratio is unchanged. And since fixed costs are fixed, the drop in profit will also be less than 5%. So the correct answer is option C.

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Reiko

5 months ago

I'm a bit confused on this one. I know that contribution is sales minus variable costs, and profit is contribution minus fixed costs. But I'm not sure how to apply that here with the 5% change in sales volume. I'll need to work through the numbers to figure out the right answer.

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Patria

5 months ago

Okay, let's see. If the sales volume goes down by 5%, but the contribution per unit and fixed costs stay the same, then the contribution and profit should both go down by less than 5% since the fixed costs are unchanged. I'm leaning towards option C.

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Buddy

5 months ago

Hmm, this looks like it's testing our understanding of how changes in sales volume impact contribution and profit. I'll need to think through the relationships between sales, contribution, and fixed costs to determine the right answer.

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Chaya

2 days ago

I think it’s definitely more than 5% lower for profit.

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Taryn

7 days ago

Right? Fixed costs stay the same, so profit takes a bigger hit.

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Olive

3 months ago

This is tricky! A 5% drop in sales might hit profits harder.

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