Deal of The Day! Hurry Up, Grab the Special Discount - Save 25% - Ends In 00:00:00 Coupon code: SAVE25
Welcome to Pass4Success

- Free Preparation Discussions
Mail Us support@pass4success.com
Location US
Mob_nav_barsMENU

CIMA Exam CIMAPRO19-P01-1 Topic 9 Question 92 Discussion

Actual exam question for CIMA's CIMAPRO19-P01-1 exam
Question #: 92
Topic #: 9
[All CIMAPRO19-P01-1 Questions]

A company manufactures a single product. The cost card for a unit of this product is as follows:

During month 6, finished goods inventory increased by 350 units.

By how much would the profit differ in month 6 if finished goods inventory was valued at standard marginal cost rather than standard absorption cost?

Show Suggested Answer Hide Answer
Suggested Answer: D

by Latricia at Jul 10, 2024, 10:18 AM

Limited Time Offer

25%

Off

Get Premium CIMAPRO19-P01-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel
Arlette
29 days ago
Ah, the old standard absorption cost vs. standard marginal cost conundrum. I'm going to need to break out my trusty calculator for this one. Hopefully, I don't end up like the proverbial 'deer in the headlights' on this one!
upvoted 0 times
Claribel
21 days ago
User 1: Let's calculate the profit difference between standard absorption cost and standard marginal cost.
upvoted 0 times
...
...
Vallie
1 months ago
Haha, this question is like a trick question! They're trying to catch us out with that fixed cost. I'm going to go with option C) $2,450 lower, just to be on the safe side.
upvoted 0 times
Erinn
3 days ago
I think you might be right, option C) $2,450 lower does seem like the safer choice.
upvoted 0 times
...
...
Jamie
2 months ago
Hmm, I'm not so sure about this one. The cost card shows a fixed cost of $50 per unit, so wouldn't the standard absorption cost be higher than the standard marginal cost? I might have to double-check my calculations on this one.
upvoted 0 times
Deonna
3 days ago
User 2: So, if the finished goods inventory was valued at standard marginal cost, the profit would be higher, right?
upvoted 0 times
...
Maybelle
4 days ago
User 1: I think you're right, the fixed cost per unit would make the standard absorption cost higher.
upvoted 0 times
...
Mignon
12 days ago
User 2: So, if the finished goods inventory was valued at standard marginal cost instead, the profit would be $1,050 higher, right?
upvoted 0 times
...
Basilia
28 days ago
User 1: I think you're right, the standard absorption cost would be higher because of the fixed cost per unit.
upvoted 0 times
...
...
Salome
2 months ago
But the absorption cost includes fixed overheads, so it would make the profit higher.
upvoted 0 times
...
Shawn
2 months ago
I disagree, I believe the profit would be lower in that case.
upvoted 0 times
...
Arlene
2 months ago
This seems straightforward - the question is asking about the difference in profit if the inventory is valued at standard marginal cost instead of standard absorption cost. I think the answer is B) $1,050 higher.
upvoted 0 times
Carrol
8 days ago
That makes sense. Thanks for explaining.
upvoted 0 times
...
Cecilia
10 days ago
Because the finished goods inventory increased by 350 units, so the profit would be higher if valued at standard marginal cost.
upvoted 0 times
...
Leonora
24 days ago
Why do you think it would be higher?
upvoted 0 times
...
Wenona
1 months ago
I think the answer is B) $1,050 higher.
upvoted 0 times
...
...
Salome
2 months ago
I think the profit would be higher if finished goods inventory was valued at standard marginal cost.
upvoted 0 times
...

Save Cancel