CIMA Exam CIMAPRA17-BA2-1 Topic 1 Question 76 Discussion

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

Question #: 76
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 Vinnie at Jul 18, 2024, 05:29 AM

Limited Time Offer

25%

Off

Get Premium CIMAPRA17-BA2-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Karrie

23 hours ago

Ah, I see! That makes sense. The production budget for month 1 needs to account for the sales volume and the closing inventory for the next month. Good catch, Santos!

upvoted 0 times

...

Santos

2 days ago

Wait, isn't the production budget for month 1 the sum of the sales volume for month 1 and the closing inventory for month 2? So the answer should be option C, 1,724 units.

upvoted 0 times

...

Von

3 days ago

Okay, let's think this through. For month 1, the sales volume is 1,660 units, so the closing inventory should be 10% of that, which is 166 units. For month 2, the sales volume is 2,300 units, so the closing inventory should be 230 units.

upvoted 0 times

...

Giovanna

18 days ago

I disagree with Eveline, because if the closing inventory for month 1 is 2,070 units, then the production budget for month 1 should be 1,660 + 2,070 = 3,730 units.

upvoted 0 times

...

Eveline

26 days ago

I'm not sure, but I think the answer might be C) 1,724 units.

upvoted 0 times

...

Aide

30 days ago

I agree with Denise, because 10% of 2,300 is 230, so the closing inventory for month 1 would be 2,300 - 230 = 2,070 units.

upvoted 0 times

...

Sharee

1 months ago

Hmm, this seems straightforward. The policy states that the closing inventory should be 10% of the next month's sales, so we just need to calculate that for each month.

upvoted 0 times

Allene

22 days ago

B) 1,494 units

upvoted 0 times

...

Dusti

1 months ago

A) 1,596 units

upvoted 0 times

...

Denise

1 months ago

I think the answer is A) 1,596 units.

upvoted 0 times

...