CIMAPRO19-P01-1 Exam - Topic 6 Question 90 Discussion

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

Question #: 90
Topic #: 6

A company sells and services photocopying machines. Its sales department sells the machines and consumables, including ink and paper, and its service department provides an after sales service to its customers. The after sales service includes planned maintenance of the machine and repairs in the event of a machine breakdown. Service department customers are charged an amount per copy that differs depending on the size of the machine.

The company's existing costing system uses a single overhead rate, based on total sales revenue from copy charges, to charge the cost of the Service Department's support activities to each size of machine. The Service Manager has suggested that the copy charge should more accurately reflect the costs involved. The company's accountant has decided to implement an activity-based costing system and has obtained the following information about the support activities of the service department:

Calculate the annual profit per machine for each of the three sizes of machine, using the current basis for charging the costs of support activities to machines.

AThe profit per machine for the medium machine was: $1276

BThe profit per machine for the medium machine was: $1376

CThe profit per machine for the medium machine was: $1350

DThe profit per machine for the medium machine was: $1250
References:

Show Suggested Answer

Suggested Answer: A

by Stefanie at Jun 23, 2024, 05:50 AM

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Venita

3 months ago

Definitely agree with moving to activity-based costing!

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Lilli

3 months ago

Surprised by these numbers, thought it would be lower!

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Tiera

3 months ago

$1376 sounds way too high, doesn't add up.

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Una

4 months ago

I think it should be $1350, seems more accurate!

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Long

4 months ago

The profit for the medium machine is $1276.

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Luis

4 months ago

I’m leaning towards option B, $1376, but I need to double-check my calculations to be certain.

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Crista

4 months ago

I feel like I’ve seen a question where the profit margins varied significantly based on the overhead allocation method. I hope I can remember the right approach here.

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Francine

4 months ago

I think the profit for the medium machine should be around $1350, but I’m a bit confused about how the overhead rate affects the final figure.

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Thomasena

5 months ago

I remember we practiced a similar question on activity-based costing last week, but I’m not sure about the exact calculations for this one.

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Zona

5 months ago

Ugh, I hate these activity-based costing questions. There are so many moving parts to keep track of. I'll have to read through it a few times to make sure I don't miss anything.

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Chaya

5 months ago

I'm feeling pretty confident about this one. The information provided seems comprehensive, and I've done similar problems before. I'll just need to be careful with the calculations.

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Melissia

5 months ago

Hmm, I'm a bit confused by all the details in this question. I think I'll need to break it down step-by-step to make sure I understand what I'm supposed to do.

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Trina

5 months ago

Okay, this looks like a classic activity-based costing problem. I'll need to calculate the cost per machine based on the support activity costs and then subtract that from the revenue to get the profit per machine.

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Kayleigh

5 months ago

This seems straightforward enough. I just need to plug the numbers into the right formulas and I should be able to calculate the profit per machine for each size.

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Marva

5 months ago

Hmm, I'm a bit stumped on this one. The wording is a bit technical, but I'll do my best to analyze the details and make an informed guess.

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Dorinda

5 months ago

Okay, I've got this. The two site-to-site connectivity options for the Azure virtual network gateway are IPsecVPN and ExpressRoute. I remember seeing that in the Azure docs. Time to mark those two choices and move on to the next question.

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Iluminada

5 months ago

Subcontracting could be useful, but it feels less relevant for a restaurant than focusing on in-house production plans.

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Adela

5 months ago

I wasn't confident about all the terms, but I know availability usually connects to access, not encryption. I'm going with confidentiality too.

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Fallon

5 months ago

I remember a practice question where reducing setup time improved service levels. That might be a good option here, right?

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Geoffrey

2 years ago

Alright, time to put on my accounting hat. I think I've got it - the answer is B, $1376. Gotta love those activity-based costing systems, am I right?

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Douglass

2 years ago

This is trickier than I thought. But hey, at least it's not as bad as that time I accidentally ordered a truckload of photocopier ink instead of toner. What a mess that was!

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Whitney

1 year ago

Well, at least now you have a funny story to tell!

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Kallie

1 year ago

I know right! It took forever to clean up.

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Jerry

2 years ago

I can't even imagine the mess you had to deal with.

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Micaela

2 years ago

Oops, that must have been a disaster!

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Phung

2 years ago

Woah, wait a minute... is this a trick question? I'm gonna go with C, $1350, just to be safe.

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Marvel

2 years ago

Yes, it will help in determining the actual profit per machine for each size.

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Izetta

2 years ago

I believe implementing an activity-based costing system will provide a more accurate picture of costs.

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Celeste

2 years ago

Hold on, I'm not so sure about that. The question specifically says to use the current basis for charging the costs, so I'm leaning towards D, $1250.

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Shawna

1 year ago

Let's go with D, $1250, as the profit per machine for the medium machine based on the current cost charging system.

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Cordelia

1 year ago

I agree, the question does mention using the current basis for charging costs, so D, $1250, makes sense.

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Verona

1 year ago

I think you might be right, D does seem like the most accurate option based on the information provided.

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Dalene

1 year ago

Let's go with option D, $1250 for the profit per machine for the medium size machine. It makes sense based on the current charging system.

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Omer

2 years ago

I agree, the current basis for charging the costs should lead us to option D, $1250 for the profit per machine.

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Margo

2 years ago

I think you might be right, D does seem like the most accurate option based on the information given.

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Marvel

2 years ago

I agree, the Service Manager's suggestion makes sense.

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Izetta

2 years ago

I think the current costing system is not accurate.

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Adolph

2 years ago

Hmm, let's see here... I think the answer is B, $1376. The numbers just seem to line up better with that option.

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Arletta

2 years ago

I think you're right, the profit per machine for the medium machine does look like it would be $1376.

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Ressie

2 years ago

I agree, option B does seem to make the most sense based on the information provided.

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