Operational Approach to Financial Decision

(b)ABC & Co. is a contract manufacturer in the textile industry. It manufactures formal shirts under licence from brand owners. The installed capacity is 18,000 units. It is estimated that the current year sales will be 15,000 units.

Other details :

Fixed costs are expected to be INR 4,80,000/-

You are required to calculate selling price to be quoted for a desired profit of INR 4,20,000/-

Financial Statement template that shows the order of how each statement works together to report the full economic position of a company beginning with the ......................

(A)Profit & Loss reported on income statement

(B)Equity contribution or distribution of statement of stock holder’s equity

(C)Ending balance sheet

(D)Beginning balance sheet

Calculate the prime cost from the following information :

Direct material purchased : ₹ 1,00,000

Direct material consumed : ₹ 90,000

Direct labour : ₹ 60,000

Direct expenses : ₹ 20,000

Manufacturing overheads : ₹ 30,000

(A)₹ 1,80,000

(B)₹ 2,00,000

(C)₹ 1,70,000

(D)₹ 2,10,000

Indirect expenses or overheads are not associated with ......................, they represent the cost of facilities required for carrying on the operation.

(A)Group jobs or product

(B)Individual jobs or product

(C)Service industry

(D)None of the above

The actual output of 1,62,500 units and actual fixed costs of ₹ 87,000 were exactly as budgeted. However, the actual expenditure of ₹ 3,00,000 was ₹ 18,000 over budgeted. What was the budgeted variable cost per unit ?

(A)₹ 1.20

(B)₹ 1.84

(C)₹ 1.956

(D)₹ 2.38

Following information is available about a company :

Cost per unit :

Raw Materials ₹ 25; Labour ₹ 10; Variable Cost ₹ 5; Selling Price ₹ 50 per unit. Fixed Overheads for the year ₹ 20,000. Sales and production was 10,000 units.

You a re required t o calcula te total contribution.

(A)NIL

(B)₹ 1,50,000

(C)₹ 50,000

(D)₹ 1,00,000

On the basis of Q. No. 90, you are required to calculate Net Profit.

(A)No profit no loss

(B)₹ 1,30,000

(C)₹ 80,000

(D)₹ 1,00,000

A company has fixed expenses of ₹ 1,80,000 with sales at ₹ 6,00,000 and a profit of ₹ 1,20,000. Calculate margin of safety.

(A)₹ 2,37,500

(B)₹ 2,50,000

(C)₹ 2,35,000

(D)₹ 2,40,000

(b)Zen & Co made sales for a certain period for ₹ 25,00,000/-. The net profit for the same period was ₹ 2,50,000/-. Fixed overheads were ₹ 3,75,000/-.

Calculate :

(i)P/V Ratio

(ii)Sales needed to generate a profit of ₹ 3,75,000/-

(iii)Net profit when sales are ₹ 37,50,000/-

(iv)Break Even Point.

Direct materials include :

(i)All materials specifically purchased for a particular job/process

(ii)All material acquired and later requisitioned from stores

(iii)Components purchased or produced

(iv)Primary packing materials

(v)Material passing from one process to another

(A)(i), (ii) and (iii)

(B)(i), (ii) and (v)

(C)(i), (ii), (iii) and (iv)

(D)(i), (ii), (iii), (iv) and (v)

According to CIMA, the prime cost is :

(A)the total cost of direct material only

(B)the total cost of direct material and direct labour

(C)the total cost of direct material, direct labour and direct expenses

(D)the total cost of direct material and indirect material

What is the amount of variable cost per unit and fixed cost ?

Volume

(A)₹ 5 per unit and 1,50,000

(B)₹ 4.58 per unit and ₹ 1,50,000

(C)₹ 3.75 per unit and ₹ 1,50,000

(D)₹ 3.75 per unit and ₹ 1,00,000

Only variable costs are considered as :

(A)Product costs

(B)Period costs

(C)Product cost and Period cost both

(D)Not a product cost nor period cost

Under absorption costing the stocks are valued at :

(A)the total cost

(B)the variable cost

(C)the fixed cost

(D)the semi-variable cost

If labour hours are the key factor, what is the contribution per key factor ?

(A)₹ 20

(B)₹ 10

(C)₹ 80

(D)₹ 40

The opportunity cost of making a component part in a factory with no excess capacity is the :

(A)Variable manufacturing cost of the component

(B)Cost of production given up in order to produce the component

(C)Total manufacturing cost of the component

(D)Net benefit given up from the best alternative use of the capacity

The difference between variable costs and fixed costs is :

(A)Variable costs per unit fluctuate and fixed costs per unit remain constant

(B)Variable costs per unit are fixed over the relevant range and fixed costs per unit are variable

(C)Total variable costs are variable over the relevant range and fixed in the long- term, while fixed costs never change

(D)Variable costs per unit change in varying increments, while fixed costs per unit change in equal increments

Following data are taken from the cost records of a manufacturing concern :

₹

Works on cost was 50% of wages. If the sales and profit respectively ₹ 25,000 and ₹ 2,575, the rate of administrative overhead on works cost is :

(A)12%

(B)15%

(C)18%

(D)21%

From the information given below, find out the selling price per unit if Break-Even Point is to be brought down to 10,000 units :

Selling Price p.u. ₹ 120

Variable cost p.u. ₹ 90

Fixed expenses ₹ 3,30,000.

(A)₹ 150

(B)₹ 143

(C)₹ 123

(D)₹ 153

Product X can be produced either by plant A or Plant B. Plant A can produce 200 units of X per hour and Plant B can produce 300 units per hour. Contribution per unit from Plant A is ₹ 10 and Plant B is ₹ 8. If total machine hours available during the year is 4000, the plant to be used to earn a maximum profit is :

(A)Plant A

(B)Plant B

(C)Plant A and B (50 : 50)

(D)Plant A or B

Following are given :

Sales – 10,000 units

Break-even sales – 5,000 units Selling Price – ₹ 12 p.u.

Fixed cost – ₹ 15,000

Find the variable cost per unit :

(A)₹ 4.50

(B)₹ 9.00

(C)₹ 10.00

(D)₹ 12.50

In case of restrictions due to limiting factors, to maximize profit, the management should decide based on :

(A)Highest P/V ratio

(B)Least Break-Even Point

(C)Highest Margin of Safety

(D)Highest Contribution per unit

(a)ABC Ltd. provides the following information regarding the cost of the product. Direct materials ₹ 20,000 Direct Wages ₹ 16,000 Variable Factory Overhead : 25% of wages Variable Administration Overhead : 10% of the factory cost Variable Selling and Distribution Overhead : ₹ 4 per unit Fixed Overhead : ₹ 8,000 Units sold 1,000 @ ₹ 64 per unit From the above data of ABC Ltd., you are required to calculate :

(i)Profit-Volume Ratio

(ii)Break-Even Point

(iii)Margin of Safety

(iv)Profit.

The example of notional expenses is.................

(A)Lease Rent

(B)Rent paid for father’s property

(C)Rent for own premises

(D)Depreciation of property used for own business

How to calculate the cost per unit to find the value of the closing stock of finished goods?

(A)Cost per unit = Cost of production/ unit produced

(B)Cost per unit = Cost of production/ unit sold

(C)Cost per unit = Cost of goods sold/ unit produced

(D)Cost per unit = Cost of sales/unit produced

Cost of sales is...................

(A)Cost of production (+) opening stock of finished goods ( – ) closing stock of finished goods (+) selling and distribution overheads

(B)Cost of production ( – ) opening stock of finished goods (+) closing stock of finished goods (+) selling and distribution overheads

(C)Cost of goods sold ( – ) selling and distribution overheads

(D)Cost of goods sold (+) opening stock of finished goods ( – ) closing stock of finished goods (+) selling and distribution overheads

From the following data, calculate Prime Cost: The Raw material consumed is ₹ 20,00,000, Opening stock of finished goods ₹ 1,00,000, closing stock of finished goods ₹ 1,40,000. Direct Labour ₹ 12,00,000 and Indirect labour is ₹ 4,00,000.

(A)₹ 31,60,000

(B)₹ 35,60,000

(C)₹ 32,00,000

(D)₹ 36,00,000

Sales minus ( – ) variable cost is equal to.................... .

(A)Fixed cost (+) Profit

(B)Fixed cost ( – ) Profit

(C)Fixed cost (+) Loss

(D)Fixed cost

Fixed expenses is ₹ 4,000 and Breakeven point is ₹ 10,000. What will be the profit when sales are ₹ 20,000?

(A)₹ 6,000

(B)₹ 10,000

(C)₹ 4,000

(D)₹ 16,000

Following are not true in respect of absorption costing:

(A)Fixed cost is included in the cost of products

(B)Profitability is measured by profit earned by various products or departments.

(C)Stock values in Absorption costing are, therefore, higher than in Marginal costing

(D)Difference in the valuation of opening and the closing stock does not affect the unit cost of production

Match List-I with List-II

List-I

(a)Staff Services

(b)Current Market Price

(c)Make or buy decisions

(d)Conveniently identifiable

List-II

(i)Replacement Cost

(ii)Direct Cost

(iii)Managed Cost

(iv)Out of Pocket Cost

(a)(b) (c) (d)

(A)(i) (iii) (ii) (iv)

(B)(iii) (i) (iv) (ii)

(C)(ii) (iv) (i) (iii)

(D)(iv) (ii) (iii) (i)

If a firm has low margin of safety, this can be improved by :

(A)Converting fixed costs into variable costs

(B)Converting variable costs into fixed costs

(C)Increasing Break-even level

(D)All of the above

The following information is given :

Fixed expenses ₹ 1,75,000

Variable cost per unit ₹ 10 Selling price per unit ₹ 16

What should be the selling price per unit to reduce the break-even point to 25,000 units ?

(A)₹ 15

(B)₹ 17

(C)₹ 20

(D)₹ 24

K Ltd. has fixed expenses of ₹ 1,00,000, sales of ₹ 3,60,000 and profit of ₹ 80,000 during the first half of a year. In the next half year, if the company suffers a loss of ₹ 40,000, then the expected sales would be, when the selling price and fixed cost remain the same :

(A)₹ 1,20,000

(B)₹ 1,15,000

(C)₹ 1,80,000

(D)₹ 2,00,000

AK Ltd. produces a component B by using a machine working to full capacity. One unit of B takes 5 hours to produce and has a selling price of ₹ 50 and variable cost of ₹ 25. Another component C required to produce product D could be made by using the same machine in 2 hours p.u. at a marginal cost of ₹ 5 per unit. If one of the suppliers is ready to supply the component C, what should be the unit price beneficial to AK Ltd. ?

(A)Less than ₹ 15 p.u.

(B)Less than ₹ 18 p.u.

(C)Less than ₹ 20 p.u.

(D)Less than ₹ 25 p.u.

The following are obtained from the records of a company :

Sales (4,000 units @ ₹ 25 p.u.) ₹ 1,00,000

Variable cost ₹ 72,000

Fixed cost ₹ 16,000

Find the additional units to be sold to earn the same amount of profit if the selling price is reduced to ₹ 22.

(A)7,000 units

(B)5,400 units

(C)3,000 units

(D)2,800 units

In Activity Based Costing (ABC), as many costs of production as possible are accounted as :

(A)Direct costs

(B)Indirect costs

(C)Fixed costs

(D)Period costs

The capital structure of a company consists of 12,000 equity shares of ₹ 100 each and 10% Bank Loan of ₹ 10 Lakhs. Its P/V ratio is 40% and annual fixed cost excluding interest is ₹ 1,50,000. If the applicable income tax rate is 40% and EPS is ₹ 20, what were the sales of company ?

(A)₹ 16,00,000

(B)₹ 16,25,000

(C)₹ 16,50,000

(D)₹ 16,75,000

Primary packing material is an example of .................... .

(A)Direct material

(B)Indirect material

(C)Direct expenses

(D)Selling and distribution overhead

If Gross Profit is 1/4th of cost, Sales is 4,00,000 and Indirect Expenses are 24,000, what will be the Net Profit Ratio ?

(A)14%

(B)19%

(C)20%

(D)25%

Selling price of a product is ₹ 40 per unit. Variable cost ratio is 50%. Fixed cost is ₹ 1,20,000 and units sold are 10,000. What is the Margin of Safety in percentage?

(A)40%

(B)60%

(C)50%

(D)20%

If Break Even Sales is 60% of current sales and profit is ₹ 4,000, then what is the amount of contribution ?

(A)₹ 12,000

(B)₹ 10,000

(C)₹ 16,000

(D)₹ 24,000

From the following information, calculate the amount of profit :

Sales ₹ 16,00,000; Fixed cost ₹ 4,00,000; P/V Ratio 30%.

(A)₹ 1,00,000

(B)₹ 80,000

(C)₹ 70,000

(D)₹ 90,000

According to CIMA, prime cost is ............. .

(A)Direct material, direct labour and direct expenses

(B)Direct and indirect material and direct and indirect labour

(C)Direct material and direct labour

(D)Only direct material

Rent of own factory premises is an example of :

(A)Indirect expenses

(B)Direct expenses

(C)Revenue expenses

(D)Notional expenses

From the following data :

The variable cost per unit is :

(A)0.60 per unit

(B)0.68 per unit

(C)0.70 per unit

(D)0.78 per unit

Using the information from Q. No. 72 , the total fixed cost is ...............

(A)6,000

(B)12,000

(C)18,000

(D)24,000

Using the information from Q. No. 72 , what is the total variable overheads at the level of output 1,40,000 units ?

(A)84,000

(B)95,200

(C)98,000

(D)1,09,200

Cost of Goods ............................

(A)Opening Stock + Purchases – Direct Expenses + Closing Stock

(B)Opening Stock + Purchases + Direct Expenses – Closing Stock

(C)Sales – Opening Stock + Purchases – Direct Expenses – Closing Stock

(D)Opening Stock + Purchases – Direct Expenses – Closing Stock

S Ltd. has fixed cost of ₹ 60,000 P.A. It manufactures a single product which it sells for ₹ 20 per unit. Its P/V ratio is 40%. S. Ltd. Break-even Point in Units is:

(A)1800

(B)3000

(C)5000

(D)7500

In marginal costing, stock is valued at .......................

(A)Fixed Cost

(B)Semi-variable Cost

(C)Variable Cost

(D)Market Price

Fixed Cost = ₹ 2,00,000, Sales = ₹ 8,00,000, P/V Ratio = 30%; the amount of profit is ............................

(A)₹ 50,000

(B)₹ 40,000

(C)₹ 35,000

(D)₹ 45,000

A company has Profit/Volume (P/V) Ratio 40 percent. By what percentage must variable cost be decreased to offset 25% reduction in selling price, so as to maintain the same P/V Ratio ?

(A)15%

(B)25%

(C)33.33%

(D)41.67%

Production 11,000 units @ ?11.50 per unit, Closing Stock of finished Goods 3,000 units. Opening Stock 2,000 units @ ₹ 14 per unit, Selling and Distribution Expenses 20% of Cost of Sales, Profit @ 25% on Sales. Calculate Profit per unit :

(A)15 per unit

(B)₹ 10 per unit

(C)₹ 5 per unit

(D)None of the above

XYZ Ltd. manufactures three products X, Y and Z. The Sales Value Mix Ratio of these products are 20%, 30% and 50% respectively. The corresponding Variable Cost to Sales Ratio is 50%, 30% and 20%. The total fixed costs are ₹ 35,500. Calculate Overall Break Even Point (in Value) :

(A)₹ 50,000

(B)₹ 60,000

(C)₹ 71,000

(D)None of the above

A company sells two products, J and K. The sales mix is 4 units of J and 3 units of K. The contribution margin per unit are ₹ 40 for J and ₹ 20 for K. Fixed costs are ₹ 3,08,000 per month. Compute the individual break-even point of product J and product K :

(A)800 units and 600 units

(B)600 units and 800 units

(C)5600 units and 4200 units

(D)4200 units and 5600 units

From the following information, calculate net profit ratio :

Gross Profit is 1/4th of cost and sales is ₹ 2,00,000. Indirect expenses is ₹ 12,000:

(A)19%

(B)20%

(C)14%

(D)25%

Selling price of a product is ₹ 32/unit. Variable cost ratio is 50%. Fixed cost is ₹ 96,000. Units sold are 10,000. Calculate Margin of Safety in percentage :

(A)40%

(B)60%

(C)50%

(D)Cannot be determined

Primary packaging material is an example of :

(A)Direct material

(B)Indirect material

(C)Direct expenses

(D)Indirect expenses

If sales in an organisation is ₹ 1,00,000, fixed cost is ₹ 12,000 and profit is ₹ 8,000, Profit/ Volume ratio is ............

(A)80%

(B)8%

(C)20%

(D)12%

A low margin of safety usually indicates :

(A)High profit

(B)High fixed overheads

(C)Low fixed overheads

(D)Operation on high level of activity

Following data provided by M Ltd. :

Fixed cost for the year will be :

(A)₹ 22 Lakh

(B)₹ 34.40 Lakh

(C)₹ 73.33 Lakh

(D)₹ 44 Lakh

Information provided by S Ltd. are given below :

When sales are ₹ 120 Lakh, then calculate the profit :

(A)₹ 66 Lakh

(B)₹ 30 Lakh

(C)₹ 24 Lakh

(D)₹ 21 Lakh

Cost of Sales – Selling and Distribution Overhead + Closing Stock of Finished Goods – Opening Stock of Finished Goods = ..............

(A)Cost of Goods Sold

(B)Works Cost

(C)Cost of Production

(D)Conversion Cost

Match the following—I with II :

I

(a)Direct Cost

(b)Indirect Cost

II

(i)Raw material

(ii)Showroom expenses

(iii)Drawing Office Expenses

(iv)Carriage inwards

(v)Carriage outwards

(vi)Primary packing

(vii)Productive wages

(viii)Oil and grease

Select the correct answer from the options given below :

(A)(a)—(i)(iv)(vi)(vii);

(B)— (ii)(iii)(v)(viii) (B) (a)—(i)(v)(vii); (b)—(ii)(iii)(iv)(v)(viii)

(C)(a)—(i)(iii)(iv)(vi); (b)—(ii)(v)(vii)(viii)

(D)(a)—(i)(iii)(v)(vii); (b)—(ii)(iv)(vi)(viii)

(a)Following data are provided by Mahi Ltd. :

Variable overheads charged @ ₹ 30 per hour

Raka, Managing Director, would like to decide which product to manufacture in the following circumstances :

(1)If the monsoon is not up to the mark, in such circumstances the scarcity of raw material is expected for both products.

(2)On account of e-marketing the sales volume may be a constraint. You are required to assist him in decision making, by considering both the situations in isolation.

(a)The following details are provided by Trupti Engineering Ltd. with respect to their product, named as Prima :

You are required to compute the total fixed cost of Trupti Engineering Ltd. and also variable cost per unit of the product Prima.

(c)What do you mean by Cost Sheet ? State its advantages.

(a)The following data are related to a small manufacturing Co. :

Calculate :

(1)P/V Ratio

(2)Break-even Point (B.E.P.)

(3)Sales required to earn a profit of ₹ 20,000

(4)Profit at an estimated sales of ₹ 4,40,000

(5)Margin of Safety when sales are ₹ 8,00,000.

(c)The Production of ABC Ltd., during the previous year was 1000000 units. The same level of activity is intended to be maintained during the current year also.

The expected ratios of cost to selling price are :

Raw material 40%

Direct Wages 20%

Overheads 20%

The raw materials ordinarily remain in stores for 3 months before production. Every unit of production remains in the process for 2 months and is assumed to be consisting of 100% raw material, wages and overheads.

Finished goods remain in the warehouse for 3 months. Credit allowed by creditors is 4 months from the date of the delivery of raw material and credit given to debtors is 3 months from the date of dispatch.

The estimated balance of cash is to be held ₹ 2,00,000. Lag in payment of wages 1/2 month.

Lag in payment of expenses l/2 month.

Selling price is ₹ 8 per unit. Both production and sales are in a regular cycle. Company makes a provision of 10% for contingency (except cash).

Prepare a working capital forecast from the above information.

Read the following information :

During the year, a machine costing ₹ 1,00,000, and accumulated depreciation thereon ₹ 44,000 was sold for ₹ 30,000. Calculate, the amount of new machinery purchased during the year.

(A)₹ 1,00,000

(B)₹ 2,00,000

(C)₹ 1,74,000

(D)₹ 1,56,000

Cost Unit is defined as a .......................

(A)Unit of quantity of product, service or time in relation to which costs may be ascertained or expressed.

(B)Location, person or an item of equipment or a group of these for which costs are ascertained and used for cost control

(C)Centres having the responsibility of generating and maximizing profits

(D)Centres concerned with earning an adequate return on investment

Calculate cost of sales from the following :

Net Works cost : ₹ 2,00,000

Office and Administration Overheads : ₹ 1,00,000

Opening stock of WIP : ₹ 10,000

Closing stock of WIP : ₹ 20,000

Closing stock of finished goods : ₹ 30,000

There was no opening stock of finished goods. Selling overheads : ₹ 10,000.

(A)₹ 2,70,000

(B)₹ 2,80,000

(C)₹ 3,00,000

(D)₹ 3,20,000

Which is responsible for cost incurrence ?

(A)Cost unit

(B)Cost center

(C)Cost object

(D)Cost driver

It is an exercise towards recovery of overhead :

(A)Absorption of overhead

(B)Allocation of overhead

(C)Apportionment of overhead

(D)Distribution of overhead

The following are the data for a 60% activity to produce 600 units :

Factory overheads (40% Fixed)—₹ 40,000

Administrative overheads (40% variable)— ₹ 30,000

Total cost of overheads at 80% capacity :

(A)₹ 70,000

(B)₹ 74,000

(C)₹ 82,000

(D)₹ 88,000

Absorption costing is required for :

(A)External financial reporting

(B)Internal financial reporting

(C)Income tax reporting

(D)External financial reporting and Income tax reporting

(b)Prepare a forecast of Profit/Loss account for the ensuing year.

(c)Prepare a forecasted Balance Sheet at the end of ensuing year.

The techniques and processes of ascertaining costs are called...................

(A)Cost control

(B)Costing

(C)Marginal cost

(D)Standard cost

Which formula is used to calculate cost under Activity Based Costing?

(A)Costs = Total Cost of Activity × Activity Cost Driver Rate

(B)Costs = Resources Consumed × Activity Cost Driver Rate

(C)Costs = Resources Consumed / Activity Cost Driver Rate

(D)Costs = Total Cost of Activity / Activity Cost Driver Rate

The correct stages in developing an Activity Based Costing System are................

(A)identify activities, identify resources, identify cost objects, determine resource drivers, determine cost (activity) drivers, assign costs to the cost objects

(B)identify activities, identify resources, identify cost objects, determine cost (activity) drivers, determine resource drivers, assign costs to the cost objects

(C)identify resources, identify activities, identify cost objects, determine resource drivers, determine cost (activity) drivers, assign costs to the cost objects

(D)identify resources, identify activities, identify cost objects, determine cost (activity) drivers, determine resource drivers, assign costs to the cost objects

The need for classifying overheads into fixed and variable is essential to :

(A)Fix selling price

(B)Determine method of absorption of overheads

(C)Prepare flexible budget

(D)All of the above

In marginal costing, ................ are valued at marginal cost.

(A)Stock of work-in-progress

(B)Stock of finished goods

(C)Product transferred from one process to another process

(D)All of the above

In absorption costing, all of the manufacturing costs are absorbed by the total no. of units :

(A)Produced

(B)Sold

(C)Produced/sold whichever is higher

(D)Produced/sold whichever is lower

Plant and machinery original costing ₹ 13,55,000 (accumulated depreciation ₹ 7,28,000) was sold at a profit of ₹ 1,59,000 during the year 2019-20. The amount of cash flow from this transaction would be :

(A)₹ 6,27,000

(B)₹ 7,86,000

(C)₹ 15,14,000

(D)₹ 8,87,000

The aspects of material control are ............ .

(A)Accounting aspect and Operational aspeect

(B)Accounting aspect and Production aspect

(C)Costing aspect and Operational aspect

(D)Costing aspect and Production aspect

Activity based cost system would probably provide the greatest benefits for organization that use ...........................

(A)Job Order Costing

(B)Process Costing

(C)Standard Costing

(D)Historical Costing

Which of the following is not an objective of Activity Based Costing ?

(A)Activity Based Costing is a two-stage product costing method

(B)The cost pools in the two-stage approach now accumulate product related cost

(C)It is based on the concept that products consume activities and activities consume resources

(D)None of the above

............ is regarded as a specialised branch of accounting which involves classification, accumulation, assignment and control of costs.

(A)Costing

(B)Cost Accounting

(C)Cost Accountancy

(D)Cost

Activity Based Costing assigns costs to products by tracing expenses to ..........

(A)Products

(B)Sales

(C)Activities

(D)Profits

Plant Original Costing ₹ 1,35,500 (accumulated depreciation ₹ 72,800) was sold at a profit of ₹ 15,900 during the year 2018-19. The amount of cash flow from the transaction would be :

(A)₹ 1,51,400

(B)₹ 62,700

(C)₹ 2,24,200

(D)₹ 78,600

Match the following List-I with List-II :

List-I

(P)Profit earned

(Q)Classification of costs into fixed and variable costs

(R)Both fixed and variable costs are charged to product

(S)Sum of fixed cost and profit

List-II

(1)Contribution

(2)Margin of Safety × P/V Ratio

(3)Marginal Costing

(4)Absorption Costing

Select the correct answer from the options given below :

(A)(P)—(2), (Q)—(4), (R)—(1), (S)—(3)

(B)(P)—(2), (Q)—(3), (R)—(4), (S)—(1)

(C)(P)—(1), (Q)—(4), (R)—(3), (S)—(2)

(D)(P)—(1), (Q)—(3), (R)—(4), (S)—(2)

According to Behavioural Analysis, the overheads may be classified as :

(A)Factory overhead, administration overhead, selling and distribution overhead

(B)Fixed overhead, variable overhead, semi-variable overhead

(C)Indirect material, indirect labour and indirect expenses

(D)Normal overhead & Abnormal overhead

(a)The Costs of an article at a capacity level of 5,000 units is given under ‘A’ below. For a variation of 25% in capacity the individual expenses vary as indicated under ‘B’ below :

Find the total cost and total cost per unit at the production levels of 4,000 units and 6,000 units.

The total cost and profit during two periods were as follow :

You are required to calculate Profit Volume Ratio (P/V Ratio).

(A)25%

(B)20%

(C)30%

(D)21%

On the basis of Q. No. 92, you are required to calculate Break-Even-Sales.

(A)₹ 2,00,000

(B)₹ 2,50,000

(C)₹ 3,00,000

(D)₹ 2,10,000

On the basis of Q. No. 92, you are required to calculate required sales for a profit of ₹ 1,25,000

(A)₹ 9,00,000

(B)₹ 9,50,000

(C)₹ 7,50,000

(D)₹ 8,75,000

On the basis of Q. No. 92, you are required to calculate profit earned when sales are ₹ 3,50,000.

(A)₹ 37,500

(B)₹ 45,000

(C)₹ 23,500

(D)₹ 25,000

The data of a Limited company

The P/V Ratio is :

(A)20%

(B)25%

(C)33.3%

(D)40%

Pick out the correct statement :

(A)Increase in margin of safety means increase in BEP

(B)Increase in actual sales increases margin of safety

(C)Increase in variable cost increases margin of safety

(D)Decrease in variable cost decreases margin of safety

Given :

Sales – ₹ 1,60,000

Marginal Cost – ₹ 1,20,000

Break-even sales – ₹ 1,00,000

Profit will be :

(A)₹ 40,000

(B)₹ 25,000

(C)₹ 20,000

(D)₹ 15,000

If the Marginal Cost is ₹ 2,400 and the P/V Ratio is 20%. Sales value will be...................

(A)₹ 12,000

(B)₹ 480

(C)₹ 1,920

(D)₹ 3,000

The following figures are available from the records of book of account as on 31st March:

March 2021 March 2022

Calculate Profit Volume Ratio.

(A)40%

(B)20%

(C)25%

(D)50%

The P/V ratio and margin of safety of E Ltd. are respectively 40% and 30%. If the sales volume is ₹ 40,00,000, the profit would be :

(A)₹ 6,00,000

(B)₹ 5,20,000

(C)₹ 4,80,000

(D)₹ 4,00,000

The following information relates to production and sale of product R in April and May 2022 :

Find out the Break-even sales in rupees.

(A)₹ 51,667

(B)₹ 57,667

(C)₹ 63,333

(D)₹ 80,000

If a company has a P/V ratio of 40%, by what percentage sales must be increased to offset 10% reduction in selling price ?

(A)4%

(B)30%

(C)33.33%

(D)25%

P/V Ratio of A Ltd. is 50% and Margin of Safety is 40%. What is the amount of Break Even Point and Net Profit if the sales volume is ₹ 50 lakh ?

(A)₹ 30 lakh and ₹ 20 lakh

(B)₹ 20 lakh and ₹ 20 lakh

(C)₹ 10 lakh and ₹ 30 lakh

(D)₹ 30 lakh and ₹ 10 lakh

If total cost is ₹ 30,000 for the sales of ₹ 50,000 and ₹ 22,000 for the sales of 30,000, then the Profit Volume (P/V) Ratio is :

(A)30%

(B)40%

(C)50%

(D)60%

The following figures are available from the records of ABC Enterprises as at 31st March :

The P/V ratio is ....................

(A)20%

(B)25%

(C)40%

(D)50%

Using the information from Q. No. 81 , the total fixed expenses is .................

(A)₹ 20 lakh

(B)₹ 30 lakh

(C)₹ 40 lakh

(D)₹ 50 lakh

Using the information from Q. No. 81 , the break-even sales is ......................

(A)₹ 50 lakh

(B)₹ 75 lakh

(C)₹ 100 lakh

(D)₹ 125 lakh

Using the information from Q. No. 81 , Sales required to earn a profit of ₹ 90 lakh is ...................

(A)₹ 275 lakh

(B)₹ 300 lakh

(C)₹ 325 lakh

(D)₹ 50 lakh

Using the information from Q. No. 81 , Profit or loss that would arise if the sales were ₹ 280 lakh is ..................

(A)₹ 52 lakh

(B)₹ 62 lakh

(C)₹ 72 lakh

(D)₹ 82 lakh

If profit is ₹ 20,000, BEP is ₹ 2,00,000 and P/V Ratio is 40%. What will be margin of safety?

(A)₹ 50,000

(B)₹ 80,000

(C)₹ 8,000

(D)₹ 12,000

An increase in selling price ...................

(A)Increase the break-even point

(B)Decrease the break-even point

(C)Does not affect the break-even point

(D)Optimizes the break-even point

Margin of Safety may be improved by :

(A)Lowering Fixed Cost

(B)Increasing Volume of Sales

(C)Increasing Selling Price

(D)All of the above