CIMAPRO19-P02-1 Exam - Topic 8 Question 95 Discussion

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

Question #: 95
Topic #: 8

A large manufacturing company sells a range of products. Details of one of these products are as follows.

Each completed batch is delivered immediately in full to the one customer that purchases this product. The delivery vehicle is currently only 50% full when it makes these deliveries. The customer will accept deliveries of any size.

Managers are considering changing the production batch size to 150 units.

Increased material storage would be needed; this can be rented nearby at a cost of $1,500 per month.

The additional storage facility would enable an increase in the reorder quantity for the materials. As a result a 5% discount would be received on all materials purchased.

Using direct product profitability (DPP), what will be the monthly profit attributable to the product if the production batch size is changed to 150 units?

Give your answer to the nearest whole $.

A$23780

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Suggested Answer: A

by Glory at Aug 24, 2024, 01:28 AM

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Benedict

9 months ago

I think the profit could be way higher than $23,780!

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Freeman

10 months ago

Wait, are they sure the demand can handle 150 units?

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Desmond

10 months ago

5% discount on materials could really help!

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Laticia

10 months ago

I disagree, the storage cost might eat into profits.

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Jeffrey

10 months ago

Sounds like a solid plan to increase batch size!

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Elenor

10 months ago

I think if we change the batch size to 150 units, we need to calculate the new costs and then apply the discount. I hope I remember the formula correctly!

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Tom

11 months ago

I'm a bit confused about how to factor in the delivery vehicle's capacity. Does it impact the profit calculation directly?

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Fidelia

11 months ago

This question seems similar to one we did on batch sizes and discounts. I think the discount on materials will really help increase profit.

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Alberta

11 months ago

I remember we practiced calculating DPP, but I'm not sure how the storage cost will affect the profit.

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Alise

11 months ago

Whoa, this is a lot of information to take in. I'm feeling a bit overwhelmed trying to keep track of all the different factors. I better read through it a few times and make sure I have a solid plan before jumping into the calculations.

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Veronique

11 months ago

I think I've got a good handle on this. The key will be calculating the cost savings from the material discount and then subtracting the additional storage costs to get the final monthly profit. As long as I don't miss any of the variables, I should be able to arrive at the right answer.

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Caitlin

11 months ago

Hmm, this seems a bit tricky. I'll need to make sure I understand all the details and assumptions before I start crunching the numbers. The question mentions "direct product profitability" but I'm not totally sure what that means.

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Nicolette

11 months ago

Okay, this looks like a pretty straightforward question about calculating the monthly profit for a product with a changed production batch size. I'll need to carefully consider the various factors like the delivery vehicle capacity, material storage costs, and the material discount.

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Hillary

11 months ago

Hmm, I'm a bit confused by the options. I'm not sure if a Permission Set or Object Permissions would be the best way to handle the requirement of allowing all users to view the flag, but only the assigned case assessor to edit it.

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