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CIMAPRO19-P01-1 Exam - Topic 8 Question 87 Discussion

A company produces and sells two products, product A and product B.What are the total fixed costs when the weighted average contribution per unit is $5 and the breakeven points for product A and product B are 10,000 units and 5,000 units respectively?Give your answer as a whole number (in 000's).
A) $75000

CIMAPRO19-P01-1 Exam - Topic 8 Question 87 Discussion

Actual exam question for CIMA's CIMAPRO19-P01-1 exam
Question #: 87
Topic #: 8
[All CIMAPRO19-P01-1 Questions]

A company produces and sells two products, product A and product B.

What are the total fixed costs when the weighted average contribution per unit is $5 and the breakeven points for product A and product B are 10,000 units and 5,000 units respectively?

Give your answer as a whole number (in 000's).

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Suggested Answer: A, D, E

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by Glory at May 09, 2024, 12:36 PM

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Mari
9 months ago
Are you sure about that? Seems a bit high to me.
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Nobuko
10 months ago
It's just basic breakeven analysis, nothing surprising here.
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Ines
10 months ago
Wait, how did you get that number?
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Eva
10 months ago
I agree, that math checks out!
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Edna
10 months ago
Total fixed costs must be $75,000.
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Kristel
10 months ago
If the weighted average contribution is $5, then I guess we can multiply that by the total breakeven units to find fixed costs, but I need to double-check my calculations.
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Darnell
11 months ago
I'm a bit confused about how to combine the breakeven points for both products to find the total fixed costs. Does it involve adding them together?
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Ciara
11 months ago
I think we need to use the formula for fixed costs, which is contribution per unit times the total units at breakeven. I practiced a similar question last week.
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Carmela
11 months ago
I remember that the breakeven point is where total revenue equals total costs, but I'm not sure how to calculate fixed costs from the contribution margin.
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Lynette
11 months ago
This seems straightforward enough. I'll just need to do the math carefully to get the right answer.
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Hortencia
11 months ago
I've got an idea - if the weighted average contribution is $5 and the breakeven points are 10,000 and 5,000 units, then the total fixed costs should be the sum of the breakeven points multiplied by the contribution per unit. Let me try that.
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Shakira
11 months ago
Wait, how do I use the breakeven points to find the total fixed costs? I'm a bit confused on the approach here.
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Elmira
11 months ago
Okay, let's see. The weighted average contribution per unit is $5, and the breakeven points are 10,000 units for A and 5,000 units for B. I think I can work this out.
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Dierdre
11 months ago
Hmm, this looks like a tricky one. I'll need to think through the fixed costs calculation carefully.
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Tiera
11 months ago
Dataflow and Datastream both sound like good options, but I'm not sure which one would be better for this specific use case. I'll need to compare the two more closely.
upvoted 0 times
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Rosio
11 months ago
Okay, the key is to identify the two required steps. I'll start by eliminating the options that aren't required, then focus on the two that are.
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Hector
11 months ago
Hmm, I'm a bit unsure about this one. Is the "decrypted message" a valid answer? I'll have to think it through carefully before selecting an option.
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Walton
11 months ago
The key is understanding how healthcare plans negotiate payment. I'm leaning towards DRG because it standardizes payment across different hospital admissions.
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Lavelle
1 year ago
Alright, let's do this! The total fixed costs are going to be $75,000, no doubt about it. I mean, how else could you possibly calculate it with the information given? It's like they're practically handing us the answer.
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Micheal
1 year ago
Great, so we're all on the same page then. $75,000 it is.
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Nan
1 year ago
Yes, I agree. It's the only logical answer based on the information provided.
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Vallie
1 year ago
I think the total fixed costs are $75,000.
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Edwin
1 year ago
Haha, this reminds me of that time in my accounting class when the professor asked us to calculate the breakeven point for a company that sold ice cream and hot dogs. I ended up mixing up the units and got some really bizarre results. Let's make sure we don't make that mistake here!
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Lashonda
1 year ago
Wait, I'm a little confused. How do we calculate the weighted average contribution per unit? Shouldn't we have more information about the individual contribution margins of each product? I feel like I'm missing a step here.
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Rikki
1 year ago
In this case, the total fixed costs would be $75,000 (in 000's).
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Fidelia
1 year ago
Once we have the weighted average contribution per unit, we can use it to find the total fixed costs by dividing the sum of the breakeven points for both products by the weighted average contribution per unit.
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Malcom
1 year ago
To calculate the weighted average contribution per unit, we multiply the contribution per unit of each product by its sales mix percentage and then sum them up.
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Maryln
1 year ago
You're right, we need to calculate the weighted average contribution per unit by taking into account the sales mix of each product.
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Cassi
1 year ago
Okay, let's think this through. The weighted average contribution per unit is $5, and the breakeven points for product A and B are 10,000 and 5,000 units, respectively. We need to find the total fixed costs, which is the sum of the breakeven points multiplied by the contribution per unit. Sounds simple enough!
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Dorian
1 year ago
Total fixed costs for product B: 5,000 units * $5 = $25,000
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Latonia
1 year ago
Total fixed costs for product A: 10,000 units * $5 = $50,000
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Claudia
1 year ago
I'm not sure about that, I think we need to calculate it based on the breakeven points for each product.
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Dierdre
1 year ago
I agree with Nadine, because if the weighted average contribution per unit is $5, then the total fixed costs should be $75,000.
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Nadine
1 year ago
I think the total fixed costs are $75,000.
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