CIMA Exam CIMAPRO19-P01-1 Topic 3 Question 106 Discussion

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

Question #: 106
Topic #: 3

Company NBO is providing a quote to manufacture 500 passenger seats for a bus company.

Relevant cost is being used as the basis for the quote.

Which THREE of the following should be included as relevant costs or savings in the production of the 500 passenger seats?

AEquipment depreciation of $2,000 for the time the passenger seats are in production.

BElectricity charges of $1,500 for the completion of the order.

CAdministration overheads of $3,200 apportioned on the basis of labour hours in production.

DSeat cover material, to be bought for $6,000, which cannot be used on other products.

EIdle time pay of $1,000 which would be paid to workers if the quote is not accepted

F$750 paid for a consultant's advice on quoting for the order.

Show Suggested Answer

Suggested Answer: C

References:

by Jennifer at Jan 28, 2025, 03:34 PM

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Nobuko

15 days ago

A, D, and F seem like the most relevant costs to include in the quote. The equipment depreciation, seat cover material, and consultant's advice all directly impact the production costs.

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Marla

2 days ago

I agree, those costs are directly related to the production of the passenger seats.

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Arletta

25 days ago

I'm not sure about E. Wouldn't idle time pay only be relevant if the quote is not accepted?

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Justine

26 days ago

I agree with Sylvie. A for equipment depreciation, D for seat cover material, and E for idle time pay make sense.

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Sylvie

28 days ago

I think A, D, and E should be included as relevant costs.

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