A company has a budgeted contribution to sales (C/S) ratio of 30% and a budgeted...

CIMA P1 Question Answer

A company has a budgeted contribution to sales (C/S) ratio of 30% and a budgeted operating profit margin of 20%. Budgeted sales were $100,000.

In month 2, actual production and sales volumes and all costs were as budgeted. The actual C/S ratio was 33% .

Which of the following statements, about the company's contribution and operating profit in month 2, is correct?

Actual operating profit was more than 10% higher than budgeted operating profit.

Actual contribution was less than 10% higher than budgeted contribution.

Actual operating profit was less than 10% higher than budgeted operating profit.

Actual contribution was exactly 10% higher than budgeted contribution.

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