CIMA Exam CIMAPRO19-P02-1 Topic 6 Question 83 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam

Question #: 83
Topic #: 6

Company X is considering the launch of a new product. In order to compete in the market the selling price must be $100 per unit. Company X aims to achieve a sales margin of 25 per cent.

Direct materials cost is $75 for each unit. It takes 15 minutes for workers to assemble each unit. Workers are paid $16 per hour. 5 per cent of paid time is idle. Overheads are absorbed at $6.50 per unit.

What is the value of any cost gap between the forecast total cost and the target cost?

A$10.71

B$5.50

C$10.50

D$9.10

Show Suggested Answer

Suggested Answer: A

by Estrella at Mar 19, 2024, 03:08 AM

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Orville

7 days ago

Wait, did they really expect us to calculate the total cost per unit? That's like asking for the meaning of life in an accounting exam.

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Jerry

8 days ago

I agree with Shawn, the cost gap should be $5.50

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Shawn

10 days ago

I believe it's B) $5.50 because the direct materials cost is $75 and the selling price is $100

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Leslee

11 days ago

I think the answer is A) $10.71

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