CIMAPRO19-P03-1 Exam - Topic 7 Question 57 Discussion

Actual exam question for CIMA's CIMAPRO19-P03-1 exam

Question #: 57
Topic #: 7

UJK manufactures garden machinery. The company is dependent upon another manufacturer for the motors that power its products.

One of the factors that is being considered in a stress test requested by UJK's Board is the possibility that the motor manufacturer increases its selling prices by 10% The motor accounts for a significant proportion of the overall manufacturing cost of UJK's products

Which of the following are correct?

AThe motor manufacturer should be contacted and told that a substantial increase in selling prices would have a drastic impact on UJK

BThe possibility of an increase in selling prices due to increased costs should be noted in the stress test report

CUJK should estimate the impact on demand of increasing selling prices to pass on the increased cost of the motors.

DThe impact of absorbing the increased cost of motors on UJK's profits should be calculated.

EUJK should identify an alternative vendor of suitable motors as part of its stress test

Show Suggested Answer

Suggested Answer: C, D

by Fletcher at Nov 22, 2023, 11:07 PM

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Doyle

5 months ago

Not sure contacting the motor manufacturer will help much.

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Georgeanna

5 months ago

UJK should definitely look for alternative vendors, just in case.

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Xenia

5 months ago

Wait, can they really just raise prices by 10%? Seems steep.

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Brandon

5 months ago

Agree, estimating demand impact is crucial too!

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Quiana

5 months ago

Definitely need to note the price increase in the stress test report.

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Rolland

6 months ago

I recall a similar question where calculating the impact on profits was key, so option D seems like a solid choice too.

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Hannah

6 months ago

I think estimating the impact on demand from passing on costs is crucial, so option C could be relevant here.

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Reita

6 months ago

I'm not entirely sure, but I feel like contacting the motor manufacturer might not be the best approach. It seems more reactive than proactive.

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Yuette

6 months ago

I remember discussing how important it is to note potential cost increases in stress tests, so I think option B makes sense.

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Elden

6 months ago

I feel pretty confident about this one. The key is to thoroughly assess the impact on the company's financials and then determine the best course of action, whether that's negotiating with the current supplier or exploring other options.

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Ernestine

6 months ago

Okay, this looks like a good opportunity to demonstrate my understanding of strategic decision-making. I'd start by calculating the impact on profits, then consider whether price increases or finding an alternative supplier would be the better solution.

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Alesia

6 months ago

Hmm, I'm a bit unsure about this one. There are a few different options presented, and I'm not sure which one is the best approach. I'll need to carefully read through the details and think through the potential consequences of each approach.

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Lenna

6 months ago

This seems like a straightforward question about how a company should respond to a potential increase in supplier prices. I'd focus on analyzing the impact on profits and considering alternative suppliers.

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Berry

6 months ago

This question seems straightforward. I think I can handle it without too much trouble.

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Kendra

6 months ago

Organizational opportunity makes the most sense to me based on what we've learned about white-collar crime. I'm confident that's the right choice.

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Craig

7 months ago

I feel like I know the answer to this, but I want to make sure I'm not missing anything. I'm pretty sure B is the correct choice, since picking up the bubble-gum at the checkout is a classic example of an unplanned, spur-of-the-moment purchase. I'll mark that one and move on.

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