CIMA Exam CIMAPRO19-P01-1 Topic 9 Question 75 Discussion

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

Question #: 75
Topic #: 9

The inventory level of Product Y has reduced by 40 units over a single period. The cost card for Product Y is as follows:

The profit for Product Y using marginal costing is $26,000.

If the company used absorption costing, what would the profit for Product Y be?

Give your answer to the nearest whole $.

A$24600

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Suggested Answer: B, D, E, G

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by Mariann at Oct 08, 2023, 02:42 AM

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Tom

1 months ago

I heard the exam committee is considering a new question: 'If a production manager drops a box of inventory, how many units are considered 'lost' for accounting purposes?'

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Lucia

1 months ago

I bet the person who wrote this question is laughing at us right now, trying to trip us up with all these cost accounting concepts. Joke's on them, I'm going to crush this exam!

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My

7 days ago

A) $24600

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Kina

1 months ago

I'm just gonna go with the lowest answer option, that's always a safe bet, right? Just kidding, I know I need to put some real thought into this one.

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Bo

1 months ago

Hmm, $26,000 under marginal costing, but what about that fixed overhead? This is where the absorption costing calculation comes into play.

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Floyd

17 days ago

So, the profit would be lower compared to marginal costing due to the inclusion of fixed overhead costs.

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Leslie

18 days ago

That's right, absorption costing takes into account fixed overhead costs which are included in the cost of goods sold.

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Kimberlie

18 days ago

Under absorption costing, the profit for Product Y would be $24,600.

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Rosann

2 months ago

I can see why this question is tricky. The key is to remember that absorption costing includes fixed overhead, while marginal costing doesn't. Gotta make sure to factor that in.

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