CIMA Exam CIMAPRA17-BA2-1 Topic 1 Question 69 Discussion

Actual exam question for CIMA's CIMAPRA17-BA2-1 exam

Question #: 69
Topic #: 1

A company's policy is to hold closing inventory each month equal to 10% of the next month's budgeted sales volume. The budgeted sales volumes of product Q for months 1 and 2 are 1,660 units and 2,300 units respectively.

The production budget for product Q for month 1 is:

A1,596 units

B1,494 units

C1,724 units

D1,890 units

Show Suggested Answer

Suggested Answer: B

by Emerson at May 01, 2024, 04:30 PM

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Glory

5 months ago

Based on that, the answer should be 1,596 units. Option A makes sense.

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Dyan

6 months ago

Given the sales volume of 1,660 units in month 1 and 230 units in closing, subtract any initial inventory to find production.

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Raymon

6 months ago

Which means 230 units for month 1's closing inventory.

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Jettie

6 months ago

Right, so for month 2, 10% of 2,300 units will be the closing inventory for month 1.

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Selma

6 months ago

I think we need to focus on the inventory policy. Holding 10% of next month's sales is key.

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Mattie

6 months ago

This production budget question is tricky. I'm not sure how to start.

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