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CIMA Exam CIMAPRO19-P02-1 Topic 3 Question 99 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam
Question #: 99
Topic #: 3
[All CIMAPRO19-P02-1 Questions]

If transfer prices are set at variable costs, the supplying division does not cover its fixed costs.

Which of the following does NOT resolve this problem?

Show Suggested Answer Hide Answer
Suggested Answer: C

by Lashaunda at Sep 19, 2024, 03:58 AM

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Verona
3 months ago
I believe reducing the level of fixed costs could resolve the issue.
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Emiko
3 months ago
I agree, the supplying division needs to cover its fixed costs somehow.
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Carline
3 months ago
I think setting transfer prices at variable costs is not ideal.
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Bethanie
4 months ago
Option D is interesting, but it still doesn't solve the problem of the supplying division not covering its fixed costs.
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Ming
2 months ago
D) Central management can impose a range within which the transfer price should fall.
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Solange
3 months ago
C) Reduce the level of fixed costs.
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Brandon
3 months ago
B) A system of dual pricing can be adopted.
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Lavonna
3 months ago
A) Each division can be given a share of the overall contribution earned by the organization.
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Talia
4 months ago
Haha, reducing fixed costs? That's like solving a leaky faucet by turning off the water main!
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Adela
4 months ago
I think option B is the best answer here. Dual pricing can help the supplying division cover its fixed costs.
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Pearlene
3 months ago
That's true, reducing fixed costs could be another way to address the issue.
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Loreta
3 months ago
But what about option C? Reducing fixed costs could also help the supplying division.
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Kelvin
3 months ago
I agree, dual pricing can be a good solution to the problem.
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Veda
4 months ago
Option B is a good choice. Dual pricing can definitely help cover fixed costs.
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Tresa
4 months ago
Option C doesn't seem like a good solution. Reducing fixed costs doesn't really address the root issue of transfer pricing.
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Teri
4 months ago
B) A system of dual pricing can be adopted.
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Rusty
4 months ago
A) Each division can be given a share of the overall contribution earned by the organization.
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