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CIMAPRO19-P02-1 Exam - Topic 9 Question 60 Discussion

A company makes three products, E, F and G. Total overheads for the year are expected to be $1.2 million, with the following split between cost pools:Cost driver information has been estimated as follows:The company plans to make 10,000 units of product E in the year, with an expected direct cost of $0.60 per unit. This annual production of product E is expected to require 20 quality inspections, 28 purchase requisitions, and 400 kilogrammes of materials.What is the overhead cost per unit of product E?
A) $0.10
B) $0.70
C) $3.57
D) $4.17

CIMAPRO19-P02-1 Exam - Topic 9 Question 60 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam
Question #: 60
Topic #: 9
[All CIMAPRO19-P02-1 Questions]

A company makes three products, E, F and G. Total overheads for the year are expected to be $1.2 million, with the following split between cost pools:

Cost driver information has been estimated as follows:

The company plans to make 10,000 units of product E in the year, with an expected direct cost of $0.60 per unit. This annual production of product E is expected to require 20 quality inspections, 28 purchase requisitions, and 400 kilogrammes of materials.

What is the overhead cost per unit of product E?

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Suggested Answer: A

by Delisa at Oct 28, 2022, 01:50 AM

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Mignon
8 months ago
Totally agree, $0.70 makes the most sense!
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Nicolette
9 months ago
Wait, $4.17 seems way too high for overhead!
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Letha
9 months ago
I think the overhead cost per unit is $0.70.
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Oren
9 months ago
They plan to make 10,000 units of E.
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Rene
9 months ago
Overheads are $1.2 million for the year.
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Titus
9 months ago
I think the overhead cost per unit is calculated by dividing total overhead by the number of units, but I can't recall the exact steps for this specific scenario.
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Lauran
9 months ago
I feel a bit confused about how to apply the cost driver rates to the units produced. Did we use a formula for that?
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Margarett
9 months ago
This question seems similar to one we did in class about overhead allocation. I think we need to find the total overhead for product E first.
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Yuette
10 months ago
I remember we practiced calculating overhead costs, but I'm not sure how to allocate them based on the cost drivers here.
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Gerald
10 months ago
This seems straightforward. I'll focus on the interface types and speeds to identify the two that are incompatible for the Multi-Chassis Link Aggregation setup.
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Albina
10 months ago
I feel a bit uncertain about the route-targets. Did we cover if PE2 needs to export those specific targets?
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Dortha
10 months ago
Okay, let me see if I can break this down. The senior responsible owner is the key decision-maker, so their focus would be on ensuring the vision is achievable and the organization can deliver the required changes. I'm leaning towards B as the best answer.
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