CIMA Exam CIMAPRO19-P01-1 Topic 4 Question 70 Discussion

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

Question #: 70
Topic #: 4

A company produces three products D, E and F. The statement below shows the selling price and product costs per unit for each product, based on a traditional absorption costing system.

Each of the products is produced using Process A which has a maximum capacity of 2,500 hours per period.

If a traditional contribution approach is used, the ranking of products, in order of priority, for the profit maximizing product mix will be:

AD, E, F

BE, D, F

CF, D, F

DD, E, F

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Suggested Answer: A

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by Timothy at May 29, 2023, 02:14 AM

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Kenia

3 hours ago

Wait, wait, wait. Did you see that? The question says the ranking is C) F, D, F. That's got to be a typo, right? I mean, how can F be both second and third? What kind of messed-up exam is this? I'm just going to go with D, E, F and hope the grader has a sense of humor.

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Rosalia

2 days ago

Okay, let's see here. We need to rank the products in order of priority for the profit-maximizing product mix using a traditional contribution approach. The key is to look at the contribution margin per unit of the scarce resource, which in this case is the 2,500 hours of Process A capacity. D has the highest contribution margin per hour, so it should be first, then E, and finally F. Definitely going with D, E, F.

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