CIMA Exam CIMAPRO19-P02-1 Topic 9 Question 25 Discussion

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

Question #: 25
Topic #: 9

Company S has two divisions, X and Y. Division X transfers 50,000 component units to Division Y each quarter. The market price of the component is $20. Division X's variable cost is $10 per unit and its fixed cost is $150,000 each quarter.

What price would be credited to Division X for each component that it transfers to Division Y under:

two-part tariff pricing (where the two divisions have agreed that the fixed fee will be $100,000); and dual pricing (based on market price and marginal cost).

ATwo-part tariff pricing = $10
Dual pricing = $22

BTwo-part tariff pricing = $12
Dual pricing = $18

CTwo-part tariff pricing = $10
Dual pricing = $20

DTwo-part tariff pricing = $13
Dual pricing = $22

Show Suggested Answer

Suggested Answer: C

by Kris at May 07, 2022, 06:19 PM

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