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CIMAPRO19-P02-1 Exam - Topic 1 Question 9 Discussion

If transfer prices are set at variable costs, the supplying division does not cover its fixed costs.Which of the following does NOT resolve this problem?
C) Reduce the level of fixed costs.
A) Each division can be given a share of the overall contribution earned by the organization.
B) A system of dual pricing can be adopted.
D) Central management can impose a range within which the transfer price should fall.

CIMAPRO19-P02-1 Exam - Topic 1 Question 9 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam
Question #: 9
Topic #: 1
[All CIMAPRO19-P02-1 Questions]

If transfer prices are set at variable costs, the supplying division does not cover its fixed costs.

Which of the following does NOT resolve this problem?

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Suggested Answer: C

by Rolland at May 05, 2022, 05:27 AM

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Lindsey
9 months ago
Sharing contributions sounds fair, but is it really practical?
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Kimberely
9 months ago
Reducing fixed costs is a valid strategy, but not a solution here.
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Carmelina
9 months ago
Wait, how does dual pricing really help?
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Doyle
9 months ago
Totally agree, fixed costs need to be covered!
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Judy
9 months ago
Transfer prices at variable costs can lead to losses for supplying divisions.
upvoted 0 times
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Annett
10 months ago
Okay, let me think this through. I know EDA has support for multiple languages, but the question is specifically about translating into Spanish. I'll focus on that and see if I can eliminate the incorrect options.
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Stephanie
10 months ago
Okay, I've got this. The question is asking about deploying Office to the enterprise, and we need to use group policy. That means we want a version of Office that is designed for enterprise deployment and management, so I'm going with Option A, Office 365 ProPlus.
upvoted 0 times
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