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

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

Question #: 92
Topic #: 9

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?

A$1,050 lower

B$1,050 higher

C$2,450 lower

D$2,450 higher

Show Suggested Answer

Suggested Answer: D

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

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Salome

6 days ago

But the absorption cost includes fixed overheads, so it would make the profit higher.

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Shawn

9 days ago

I disagree, I believe the profit would be lower in that case.

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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.

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Salome

14 days ago

I think the profit would be higher if finished goods inventory was valued at standard marginal cost.

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

Contribute your Thoughts:

Salome

Shawn

Arlene

Salome