CIMA Exam CIMAPRO19-P02-1 Topic 6 Question 83 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam

Question #: 83
Topic #: 6

Endure Co. makes 1,000 units ofX and 2,000 units of Y.

Costs for X: Material $4, labour $8, direct overhead $2, fixed cost $4.

Costs for Y: Material $9, labour $9, direct overhead $4, fixed cost $6.

Selling price for X and Y are S19 and $25 respectively. Another company can sell ready made product X and product Y's to Endure Co, this company sells X at $12 and Y at $21. Advise Endure Co. on what would be the

most cost effective way to source products X and Y.

AEndure should buy X and Yfrom the other supplier.

BEndure should buy X but produce Y themselves.

CEndure should produce both X and Y themselves.

DEndure should buy Y but produce X themselves.

Show Suggested Answer

Suggested Answer: A

by Estrella at Mar 19, 2024, 03:08 AM

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Margery

5 months ago

I agree with Thurman. It seems like a good balance of cost savings.

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Thurman

5 months ago

It may actually be cheaper if they buy X from the supplier and produce Y themselves.

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Laine

5 months ago

But wouldn't it be more cost effective for them to produce both X and Y themselves?

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Thurman

5 months ago

I think Endure Co. should buy product X and Y from the other supplier.

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Rene

6 months ago

I disagree. I think it would be best to produce both X and Y ourselves to have better control over quality and costs.

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Jaime

7 months ago

That's true. Maybe we can produce Y ourselves and buy X from the other supplier.

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Latia

7 months ago

But what if we can save more if we produce one of them ourselves?

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Jaime

7 months ago

I think buying both X and Y from the other supplier might be cost effective.

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