A company manufactures three products X, Y and Z.

CIMA P1 Question Answer

The company is currently operating at full capacity and is unable to meet the full sales demand for Product Z.

According to the latest management accounts, Product Y is loss making, whilst X and Z both make strong positive contributions.

Which of the following is relevant when making a decision on whether or not to discontinue the manufacture of Product Y?

The salary of the sales manager who deals with all three products.

The rent and rates of the factory used to make the three products.

The contribution from additional sales of Product Z.

The cost of market research carried out last month to establish if sales of Product Y are likely to improve.

CIMA P1 Summary

Price: $52.5 ~~$149.99~~