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Exam P1 All Questions
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CIMA Operational P1 Question # 65 Topic 7 Discussion

P1 Exam Topic 7 Question 65 Discussion:
Question #: 65
Topic #: 7

You are a management accounting working for a car manufacturer. The company is publicly listed and has been around for many years.

The company produces 2 products. Car 1 and Car 2. Car 1 sells for £20,000 and Car 2 for £27,000.

Car 1 can be upgraded post production to the 1ZC model for £5,000 and Car 2 to the 2ZC model for £3,500.

Post production upgrade the 1ZC sells for £25,500 and the 2ZCfor £30,000.

The company sources all of its supplies for the same supplier and has access to a large workforce. As a result there are no bottlenecks or limiting factors to production.

Based on the information above the company should...


A.

Upgrade both models


B.

Upgrade Car 1 but not Car 2


C.

Upgrade Car 2 but not Car 1


D.

Keep both Cars as base models


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