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Exam P1 All Questions
Exam P1 All Questions

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CIMA Operational P1 Question # 22 Topic 3 Discussion

P1 Exam Topic 3 Question 22 Discussion:
Question #: 22
Topic #: 3

A manufacturing company produces and sells a single product.

It is preparing its budget for the next period and expects to breakeven.

Budgeted fixed costs are the same as budgeted variable costs and the budgeted contribution to sales ratio is 50%.

If all budgeted costs decreased by 10%, which of the following statements is true?


A.

Total contribution would increase by less than the increase in total profit.


B.

Total profit would increase by the same amount as the increase in total contribution.


C.

The contribution to sales margin would increase by more than five percentage points.


D.

The contribution to sales margin would increase by less than five percentage points.


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