CIMA Exam CIMAPRO19-P03-1 Topic 1 Question 69 Discussion

Actual exam question for CIMA's CIMAPRO19-P03-1 exam

Question #: 69
Topic #: 1

UJK manufactures garden machinery. The company is dependent upon another manufacturer for the motors that power its products.

One of the factors that is being considered in a stress test requested by UJK's Board is the possibility that the motor manufacturer increases its selling prices by 10% The motor accounts for a significant proportion of the overall manufacturing cost of UJK's products

Which of the following are correct?

AThe motor manufacturer should be contacted and told that a substantial increase in selling prices would have a drastic impact on UJK

BThe possibility of an increase in selling prices due to increased costs should be noted in the stress test report

CUJK should estimate the impact on demand of increasing selling prices to pass on the increased cost of the motors.

DThe impact of absorbing the increased cost of motors on UJK's profits should be calculated.

EUJK should identify an alternative vendor of suitable motors as part of its stress test

Show Suggested Answer

Suggested Answer: C, D

by Jacquelyne at Jun 01, 2024, 12:54 PM

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Jordan

6 months ago

This is a tough one, but I think B, D, and E cover the bases. Gotta be prepared for anything, even if it means getting in bed with a new motor supplier.

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Martin

5 months ago

Absolutely, having a backup plan with an alternative motor supplier is a smart move.

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Casie

5 months ago

I agree, being prepared for any scenario is crucial for UJK's success.

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Laurel

6 months ago

I believe option D is also necessary. We need to calculate the impact on UJK's profits if they absorb the increased cost of motors.

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Twana

6 months ago

I agree with you, Marylin. It's crucial to consider the impact of increased selling prices on UJK's products.

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Viola

6 months ago

Haha, the motor supplier must be having a field day. I'd go with B, D, and E - diversify those supply chains, my friends!

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Sherman

6 months ago

Ah, a classic cost management dilemma. I'd say B, D, and E are all crucial. Gotta have a backup plan in case the motor supplier gets greedy!

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Sheridan

5 months ago

E) UJK should identify an alternative vendor of suitable motors as part of its stress test

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Karma

5 months ago

D) The impact of absorbing the increased cost of motors on UJK's profits should be calculated.

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Eun

6 months ago

B) The possibility of an increase in selling prices due to increased costs should be noted in the stress test report

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Carri

6 months ago

I agree with B and D. But C is also important - they need to understand how demand would be affected if they pass on the costs.

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Marylin

6 months ago

I think option B is important to include in the stress test report.

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Dana

6 months ago

Definitely B and D. The stress test needs to consider the potential impact on pricing and profitability if the motor costs increase.

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Lea

5 months ago

D) The impact of absorbing the increased cost of motors on UJK's profits should be calculated.

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Yuriko

5 months ago

B) The possibility of an increase in selling prices due to increased costs should be noted in the stress test report

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Yvette

6 months ago

D) The impact of absorbing the increased cost of motors on UJK's profits should be calculated.

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Elina

6 months ago

D) The impact of absorbing the increased cost of motors on UJK's profits should be calculated.

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Lashandra

6 months ago

B) The possibility of an increase in selling prices due to increased costs should be noted in the stress test report

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Claribel

6 months ago

B) The possibility of an increase in selling prices due to increased costs should be noted in the stress test report

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