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CIMAPRO19-P02-1 Exam - Topic 9 Question 25 Discussion

Company S has two divisions, X and Y. Division X transfers 50,000 component units to Division Y each quarter. The market price of the component is $20. Division X's variable cost is $10 per unit and its fixed cost is $150,000 each quarter.What price would be credited to Division X for each component that it transfers to Division Y under:two-part tariff pricing (where the two divisions have agreed that the fixed fee will be $100,000); and dual pricing (based on market price and marginal cost).
C) Two-part tariff pricing = $10 Dual pricing = $20
A) Two-part tariff pricing = $10 Dual pricing = $22
B) Two-part tariff pricing = $12 Dual pricing = $18
D) Two-part tariff pricing = $13 Dual pricing = $22

CIMAPRO19-P02-1 Exam - Topic 9 Question 25 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam
Question #: 25
Topic #: 9
[All CIMAPRO19-P02-1 Questions]

Company S has two divisions, X and Y. Division X transfers 50,000 component units to Division Y each quarter. The market price of the component is $20. Division X's variable cost is $10 per unit and its fixed cost is $150,000 each quarter.

What price would be credited to Division X for each component that it transfers to Division Y under:

two-part tariff pricing (where the two divisions have agreed that the fixed fee will be $100,000); and dual pricing (based on market price and marginal cost).

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Suggested Answer: C

by Kris at May 07, 2022, 06:19 PM

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Lauran
10 months ago
Totally agree, the numbers should align with the market trends!
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Aracelis
10 months ago
Fixed fee plus variable cost gives a clearer picture for pricing.
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Ernest
11 months ago
Wait, how does $22 come into play for dual pricing? Seems off.
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Karol
11 months ago
I think dual pricing should reflect the market price, so $20 makes sense.
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Theodora
11 months ago
Two-part tariff pricing should be based on fixed and variable costs.
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Olive
11 months ago
I'm a bit confused on this one. I'll need to review the details about QA links and how they interact with the Activity status and audience targeting.
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Silvana
11 months ago
Okay, let's think this through step-by-step. The key information is that CE-A is sending frames with a single tag of 100, and CE-B is expecting a frame with a top tag of 200 and bottom tag of 100. So we need to find the correct SAP ID for PE-B that will translate the single tag to the expected double tag.
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Melynda
11 months ago
This seems like a straightforward question about the components of ordering costs in the EOQ model. I'll need to recall the key factors that make up ordering costs for a manufacturing firm.
upvoted 0 times
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