175. (Variable cost per unit (Rs.) |Contribution margin per unit (Rs.) Break even point (units) ‘The profit if sales in units are 20% above BEP is a, Rs.10,000 b. Rs.12,500 c. Rs.4,000 |. Rs.9,500 ce. Rs.11,900. 176. Fixed costs (Rs) Break even point (units) Variable costs The profit if sales in units are 20% above BEP is a. Rs.15,000 b. Rs.3,500 c. — Rs.10,000 d. Rs.11,000 e. — Rs.6,000. 177, X Ltd., manufactures and sells four types of products under the brand names A, B,C and D. ‘The sales mix in value comprises 33 1/3%, 41 2/3%, 16 2/3% and 8 1/3% of A, B, C and D respectively. The total budgeted sales are Rs.60,000 per month, Operating costs: ‘A Company uses job order costing with predetermined departmental overhead rates. The rates are based on machine hours in Department D, and prime cost in D3. ProductA - 60% of'selling price ProductB = _~—_-70% of selling price ProductC - 80% of selling price ProductD - 70% of selling price Fixed cost Rs.12,000 per month, ‘The break even point for the products on an overall basis is a. Rs.48,924.00 b. Rs.37,894.74 ce. — Rs.65,254.50 d, — Rs.29,222.72 e. — Rs.18,150.65. 178, A company produces two Products A and B. ] Product A” ] Product B Rs. Rs, Direct matenal per unit Direct wages per unit Fixed overhead for the period 1,600 Variable overhead is allocated to Products at the rate of 100% of direct wages, Sales prwe Per unit is Rs.40 and Rs.30 respectively.179. 180. The proposed sales mix to earn a profit of Rs.300 with the total sales of A and B being 300 units is. 225 units and 75 units respectively 100 units and 200 units respectively 200 units and 100 units respectively 150 units and 150 units respectively e. 175 units and 125 units respectively. ‘Accompany produces two Products A and B eos fp Product A | Product B Rs. Rs. Direct material per unit 20 18 Direct wages per unit 6 4 Fixed overhead for the period 1,600 Variable overhead is allocated to products at the rate of 100% of direct wages. Sales price per unit is Rs.40 and Rs,30 respectively. The proposed sales mix to eam a profit of Rs.600 with the total sales of A and B being 300 units would be. a, 100 units and 200 units respectively b. 200 units and 100 units respectively c. 150 units and 150 units respectively 4. 250 units and 50 units respectively e. 300 units of Product A only. ‘A company engaged in the plantation activities, has 200 hectares of land which can be used for growing jointly or individually Rice, Sugarcane and Oranges. The yield per hectare of the different crops and their selling price per kg are as under: Yield | Selling price per kg Rice 2,000 kg Rs.20 [Sugarcane 500 kg Rs.50 [Oranges 100 kg Rs.225 Variable costs per kg are: Rice Sugarcane Oranges Rs. Rs. Rs. 120 Labor charges 8 7 10 Packing materials 2 2 20 Other costs 4 1 14 10 150 sed on total contribution would be The Ranks given to Rice, Sugarcane and Oranges ba a. (II), (1) and (II) respectively b. (ID, (111) and (1) respectively © (1), (ID) and (III) respectively 4. (1), (111) and (11) respectively © (IM), (11) and (1) respectively.Based on the following information answer the questions 181 and 182. ‘A company engaged in the plantation activities, has 200 hectares of land which can be used for growing jointly or individually Rice, Sugarcane and Oranges. The yield per hectare of the different crops and their selling price per kg are as under: i. The policy of the company is to produce and sell all the products and the maximum and minimum area to be cultivated per product is as follows: Yield | Selling price Rice 2,00 Rs.20} ql Okg! Sugarcane 500 kg! Rs.50) Oranges 100 ke| Rs.225 Variable costs per kg are: Rice Sugarcane | Oranges Rs. Rs. Rs. Labor charges 8 7 120 [Packing materials 2 2 10 Other costs 4 1 20 14 10 150 Fixed cost per annum: Particulars Rs. (Cultivation and growing cost 10,00,000 Administration cost 1,00,000 Land revenue 2,00,000 [Repair and maintenance 2,00,000 |Other costs 1,00,000 Total fixed costs 16,00,000 Maximum) Minimum hectares | hectares Rice 160 120 [Sugarcane 50 30 |Oranges 30 10 181. The most profitable product mix of Rice, Sugarcane and Oranges is a. 2,80,000 kgs, 25,000 kgs, and 1,000 kgs respectively b. 2,00,000 kgs, 40,000 kgs, and 500 kgs respectively ©. 1,00,000 kgs, 35,000 kgs, and 100 kgs respectively 4. 50,000 kgs, 35,000 kgs, and 900 kgs respectively ©. 1,80,000 kgs, 45,000 kgs, and 850 kgs respectively. 182, The maximum profit that can be achieved is a, Rs.25,00,000 b. — Rs.18,95,000 c. Rs.19,25,000 d. Rs.6,45,600 e. Rs.11,55,000.‘ selh aac ae the the sling pe by a with a sales tumover of 8 hat The compe oy reduce 8 Price but des ‘profit possion by mcreasing the output, The following further data weave Se m= Prot poston 1. Vanable cost per unit Rs.60. : a, Serm-variable cost (including a variable element of Rs, 10 per umit) Rs. 1,80,000. Fixed cost Rs.3,00,000 will remain constant upto 80% ‘Of Rs.60,000 will be upto 80% level. Beyond this an additional Assume that the increased output could be made and sold, ‘The level at which the company should operate, to achieve the desired objective is 2 61.27% level b. 72.91% level 84.71% level 4 95.22% level 60.22% level. Based on the following information answer the questions 184 and 185. The following details for 2002 are extracted from the books of X Co. Lid. | Product A | ProductB | Product C L Rs. Rs. Rs. | | Sales 2,00,000 | 5,00,000 ~~ 3.00,000 Variable expenses: | Cost of goods sold 90,000} — 2,70,000} —_1,0,000 Selling expenses 30,000 90,000 45,000 | Fixed expenses: | Overhead 36,000 90,000 54,000 Administrative 16,000 40,000 ae Income before tax 28,000 10,000 te Income tax @ 40% 11,200 4,000 we300 Net Income 16,800 6,000 | _16.200] rol All the products w manufactured in the same facility under common administrative controls, les volume. Fired expenses are allocated among the products in proportion (0 their budgeted sales volume. 184. The budgeted break even point of the company as a whole is a Rs.10,50,000 b. Rs.8,00,000 © Rs.14,25,000 4. Rs.9,89,000 nee if half of the budgeted sales volume of company tks, equal rupee The budgeted break even point of the whole amounts, so that the total Product B were shifted to Products A and © lgeted sales in rupee remain the same would Rs.$,95,720 Rs.3,29,645 Rs.4,45,749 Rs.7,45,520 Rs.9.20,920. a b. © a ©. 209Based on the following information answer the questions 186 and 187, The costs per unit of the three Products A, B and C of a company are given below: Products A B Cc Rs. Rs. Rs. Direct Materials 20 16 18 Direct Labor 12 14 12 Variable expenses 8 10 6 Fixed expenses 6 6 4 46 46 40 Profit 18 4 12 Selling price 64 60. 52 No. of units produced 10,000 |~ 5,000 [ 8,000 Production arrangements are such that if one of the products is given up the production of others is raised by 50%. 186. The profit when all the Products are produced a. Rs.4,44,400 bd. Rs.3,46,000 c. — Rs.5,25,000 d. Rs.2,12,620 e. — Rs.1,90,000. 187. Which of the Products is to be discontinued in order to achieve hi a Only Product A. b. Only Product B. ©. Only Product C. d. Both Products A and B. €. Both Products A and C. Based on the following information answer the questions 188 — 190. X Ltd., Manufactures three Products A, B and C, ‘The following are the other details for 2002: igher contribution? Per unit A_ Bc Selling price (Rs) 2 60 125 Direct materials (Rs.) 8 15 2 Direct wages (Rs.) 10 20 59 Variable overhead Rs, S10 25 Dire wages Paid at the rate of Rs.2 per hour, Fixed overheads are budgeted at Rs.25,000 for The company cannot increase its direct labor str irect labor will be available in th Strength and as a result, only 35,000 direct ¢ in the coming year. The company has commitments to produce 500 units 0! cach product. It has been suggested that after mecting the maar requirements for A, Band C the balance of avaiable diet labor hours shouldbe used fo ren 188. The profit of the company if the proposal is accepted is a. Rs.18,000 b. Rs.26,500 c. Rs.35,700 d. Rs.10,900 e. Rs.6,700.shat would be the company’s net profit, if remaining hours are used for producing Product B? 189. W a. Rs.35,500. b._ Rs.17,000. cc. _ Rs.22,500. 4. Rs.30,000. Rs.12,900, e 190. The sales value which is required to produce an after tax return of 10% on capital employed of Rs.1,00,000 assuming tax rate of 50%. If additional units of B are produced would be a. Rs.2,50,000 b. _Rs.3,00,000 c. Rs.1,10,000 d.—Rs.1,86,500 e. Rs.96,600. Based on the following information answer the questions 191 and 192. ‘The particulars of two plants producing an identical product with the same selling price are as follows: Plant P| Plant Q Capacity utilization 80% 70% (Rs. lakh) | (Rs. lakh) Sales 200 100 Variable costs 150 8 Fixed costs 45 30 Ithas been decided to merge Plant P with Plant Q. The additional fixed expenses involved in the ‘merger will be Rs.20 lakh, 191. The break even point after merger would be: a. Rs.380 lakh b. Rs.450 lakh ¢. Rs.525 lakh 4. Rs.175 lakh © —-Rs.225 lakh. 192. The capacity utilization ofthe integrated plant required to eam a profit of Rs.50 lakh would be a 192.5% b. 247.6% & 21.2% 4 95.60% & 147,69 193, so, mh. ya engineering is operating at 70% capacity and presents the following information: Rs.200 crore The Rs.S0 crore i . folig™™3™48ement has decided to increase production to 95 percent capacity level with the '8 Modifications:194, 195, i, The selling price will be reduced by 8 percent. ii, The variable cost will be reduced by 5 percent. / it, The fixed cost will increase by Rs.20, 20 crore, includin excluding interest on additional capital. / Additional capital of Rs.50 crore will be needed for capital expenditure and working capital. ig depreciation on additions, but if sales that would be needed to earn Rs.10 crore over and above the present profit and also meet 20 Percent interest on the additional capital is Proposed to achieve? a -Rs.220 crore. Db. Rs.67.67 crore. c. Rs.120.50 crore. a Rs 45.92 crore. © Rs.150.55 crore. Small Tools has a plant capacity adequate to provide 19,800 hours of machine use. The plat can pedace all A oye ea me 10 Provide mixture of the two types. The following information is relevant: Huarket conditions are such that no more than 4000 A type tools and 3,000 B type tools can be sold ima year. Annual fixed costs are Rs.9.900. The maximum net income to the company would be a. Rs.6,900 b. Rs.4,300 ©. Rs.9,100 4. Rs.10,500 e. Rs.1,780. The following particulars are taken from the rec two Products ‘REX’ and ‘ords of a company engaged in manufacturing ‘MEX’ from a certain material, Product REX Product MEX Rs. per unit Rs. per unit Sales 5,000 10,000 Material cost (Rs.100 per kg.) 1,000 2,500 Direct labor (Rs.60 Per hour) 1,500 3,000 Variable overhead 500 1,000 Total fixed overheads Rs.20,00,000 a Rs.65,00,000 b. _Rs.29,00,000 c. — Rs.32,00,000 4d. Rs.48,00,000 ©. Rs.51,00,000.197. Moos Gd fishes you the Slowing infomation pertaining to the half year ended September During the second half of the year, the company has projected a loss of Rs.5,000. ‘The expected sales volume for second half of the year, assuming that the P/V ratio and fixed expenses remains constant in the sccond half year also would be a Rs.75,000 b. Rs1,20,000 c. Rs35,000 d. Rs.69,000 e. Rs.12,S00. 198, Sun Lid. farnishes you the following information a ___ —— wuss vane De STE Re comenny margin of safety for the whole year 2002-03 8 Rs.55,000 Rs.20,000 Rs.36,900 Rs.45,400 ce Rs.11,150. is 199, “The budgeted per unit cost data of a toy manufectares pertaining to the half year ended September apeixed overhead incurred is Rs.4,00,000. The a ce x nem by 29 ed we of as eos by 304 wo te Rs.35,74,000 Rs.44,99,700 Rs.56,75,250 Rs.24,87,500 . Rs.11,13,400. 200. The budgeted per unit cost data of a toy manufacturing company is eae re Rs. Material 18 Labor 9 Variable overhead 8 Selling price 50. Budgeted production and sales is 1,50,000 units. Fixed overhead incurred is Rs.4,00,000. The total profit if price is decreased by 25% and volume of sales increase by 30% is a. Rs.87,500 b. Rs.42,900 ©. Rs.55,600 d. Rs.61,900 €. Rs.70,650, 201. The budgeted per unit cost data of a toy manufacturing company is Rs. Material 18 Labor 9 Variable overhead 8 Selling price 50 Budgeted production and sales is 1,50,000 units. Fixed ovethead incurred is Rs.4,00,000. The total profit would be a. Rs.12,75,000 b. Rs.18,50,000 ©. Rs.9,10,500 4. Rs.26,71,250 &. Rs.24,42,420, Based on the following information answer the questions 202 - 204. The budgeted per unit cost data of a toy manufacturing company is: Rs. Material 18 Labor 9 Variable overhead 8 Selling price 50 Budgeted production and sales is 1,50,000 units. Fixed overhead incurred is Rs.4,00,000. 202. The margin of safety is _ 2,50,000 units 75,000 units 1,23,333 units 2,10,110 units 67,777 units. eS Bos fs 214rgin of safety, if price is increased by 25% and yo) ime of sales decreases by 31 u 8 y 203+ * 73,125 units 10% is b. 90,455 units c, 45,140 units 4, 1,20,000 units e. 1,31,250 units. e margin of safety, if price is dec 204. ™ me nit bi eased by 25% and volume of sales is increased by 30% is b. 50,500 units ¢. 67,777 units d. 35,000 units ¢. 22,500 units. Taylor Ltd., produces two Products A and B. The budget for April, 2002 is given below: Particulars A B Maximum sales potential (unit) 50,000 75,000 Budgeted production and sales (unit) 40,000 60,000 Selling price (Rs./unit) 130 0 2 100 Total cost (Rs./unit) 80 Machine hours per unit 3 Fixed expenses per month = Rs.12,00,000. ed overheads on the basis of machine hours which are fully utilized 205. The company absorbs fix by the budgeted production and cannot be further increased. The profit as per budget for April, 2002 is a. Rs.46,00,000 b. Rs.12,50,000 c. Rs.20,10,000 d. —Rs.50,00,000 €. Rs.32,00,000. Based on the following information answer the questions 206 and 207. for April, 2003 is given below: Sumer Ltd., produces two Products A and B. The budget Particulars f ; Maximum sales potential (units) coo | 6000 Budgeted production and sales (units) | 40,000 on Selling price (Rs./unit) ‘on ‘0 Total cost (Rs./unit) 5 ° Machine hours per unit 3 ° Fixed expenses per month = Rs.12,00,000. utilized ie company absorbs fixed overheads on the basis of A Y the budgeted production and cannot be fusther increas?e- machine hours which are fully 206. The optimum product mix which yields maximum profit is ; A: 40,000 units, B: 60,000 units « nN 20,000 units, B: 80,000 units ae *0.000 units, B: 75,000 units é * 10,000 units, B: 95,000 units 215 A: 20,000 units, B: 65,000 units.207, The maximum profit would be a. Rs90,00,000 b. Rs.54,00,000 ¢. s.48,00,000 4. Rs.24,00,000 ©. Rs.36,00,000. Based on the following information answer the questions 208 and 209. Blue Line Company makes a single product A and sells it through normal marketing channel. The company’s imcome statement for the last 2 Quarters is representative of the cost and productive efficiency of the company in the future. The income statement reveals the following: Particulars T Ist Quarter] 2nd Quarter [Sates (units) 10,000] . 20,000 Rs. Rs. Sales value @ Rs 50 per unit 7 5,00,000 | 10,00,000 Less: Cast of goods sold 4,00,000 | _ 6,50,000 Gross Profit 1,00,000 3,50,000 Less: Selling and administrative expenses 70,000 | 1,20,000 Net income before tax 30,000 | 2,30,000 ‘Less: Corporate tax 10,500 80,500 Net imoome after tax 1 19,500 1,49,500 ‘There are no inventories on hand at the end of each quarter. 208. The quarterly break even sales of the product is a RsA,25,000 b. -Rs.5,50,000 ©. Rs.6,75,000 d Rs2,10,000 €. Rs3,75,500. 209. What would be the net income, if selling price is reduced by Rs.4 per unit, an additional advertisement expense of Rs.1,80,000 is incurred and sales volume is increased by 20% over the 2nd quarter? . a = -Rs.35,900. b. Bs41,800. c. Rs.22,100. ds. 10,110. e. Rs.18,150. Based on the following information answer the questions 210 and 211. “The cost of manufacturing 10,000 units of a commodity is as follows:For manufacturing every 1,000 units of increases as follows: the commodity beyond 10,000 units, the cost of Yee Wazes 15% Less than | Vanable factory overhead [20% Less han proponent Fred factory overhead {[Rs. 500 " $00 for any additional level of activi 210. The cost of production of 13,000 units would be a Rs1,90,950 B Rs2 10,115 c Rs98,150 d_ Rs1,56,800 e — Rs1,75,600. 211. ee ie of 13,000 units, if the factory overhead is applied at a a Rs3,825 BR _Rs4,625 c RsS5,945 ad Rs1,865 c. Rs6,665. Based on the following information answer the questions 212 and 213. sur Sve Led. i rear fo small video disks. The projected et incre fo the caren 30 x: volume of 1,50,000 video disks. The sale price of the disks is and incurs an additional I fixed costs of Star Style are Rs.17,85,000. handling cost of Rs.8 per disk. The annual 212. The margin of safety (in value) for the year wall be Rs.75,00,000 Rs.42,65,000 Rs.68,25,000 Rs81,92,000 e — Rs.95,62,000. 213, The company’s net a Rs.15,75,000 b. Rs.13,65,000 cc Rs.16,42,000 a e ere jecome from the current year (ignore income tax) is Rs.11,50,000 Part i for the current 214, Mega Star Lid, isa retailer for small videos “The projected net income for volume 1,50,000 videodisks. The sale price of the ar one ‘price of Rs.76 per disk and years R13 65,000 bat Li parca the ds st eS ero OPS per disk. The annual fxed cos's of Mega Star are Rs17,85,000. What would be company’s net income, if the company ‘volume (in units) in the next year? Rs.16,80,000. Rs.17,95,000. Rs.14,10,000. Rs.12,25,000. Rs. 11,15,000_ expects a 10% increase in sales oR nee 217215. Real Star Ltd., is a retailer for a small videodisks. The projected net income for the current year is Rs.13,65,000 based on a sales volume of Rs.1,50,000 video disks. The sale price of the disks is Rs.105 each. Real Star purchases the disks at a price of Rs.76 per disk and incurs an additional handling cost of Res per disk. The annual fixed costs of Real Star are Rs.17,85,000. The Real Star expects that the unit purchase price of the videodisks will increase by 25% in the next year, However, the company does not want to change the sale price. Compute the sales in rupees which will ensure the company the current profit. a. Rs.17,92,00,000 b. _ Rs.16,53,75,000 c. Rs.19,51,25,000 d. _ Rs.25,00,00,000 e. —Rs.26,12,25,000. 216, Super Star Ltd., is a retailer of a small videodisks. The projected net income for the current year is Rs.13,65,000 based on a sales volume of 1,50,000 videodisks. The sale price of the disks is Rs.105 each. Super Star purchases the disks at a price of Rs.76 per disk and incurs and additional handling cost of Rs.8 per disk. The annual fixed costs of Super Star are Rs.17,85,000. If the company wants to maintain the same contribution margin in the next year as in the current year even after the increase in purchase price by 25%, the selling price to be quoted by the company next year would be a. Rs.145.65 b. Rs.205.75 ce. Rs.128.75 4. Rs.175.27 e. Rs.92.99. 217. JB Manufacturing Company, a small company, toys. During the year 2000-01 the company sol amounted to Rs.16,00,000 of which Rs.4,75,000 margin of safety for the year 2000-01? specializes in manufacturing of electronic Id 45,000 toys at Rs.45 each. Total costs were considered fixed. What would be the a. Rs.9,56,250. b. Rs.4,21,750. c. Rs.12,75,250. d. Rs.6,91,100. e. —Rs.15,61,700. Based on the following information answer the questions 218-220. Surabhi Manufacturin; . During the year to Rs.16,00,000 of which Rs.4,75,000 were consider The company wants to improve the toys. 'g Company, a small company, specializes in manufacturing of electronic 2000-01 the company sold 45 000 toys at Rs.45 each, Total costs amounted red fixed. quality of the product by replacing a component part costing Rs.9 per unit with a new and better one costin replacing a compot + chine would also be purchased to i ig Rs.13 per unit in the next year. A new 218. 218 Number of units to be sold in the year 2001.02 i pan me wh makes Proposed changes without affecting the selling price igak vem HF te company a. 45,725 units b. 60,920 units c. 75,125 units d. 30,125 units e. 18,925 units.219. Number of units to be sold in year, if the company makes the a. 69,125 units b. 98,108 units c. 56,688 units d. 30,129 units ¢. 25,625 units. 220, Selling price per unit ofthe product in the year 2001 the Proposed etes22 1 eam the same net income as in the last ‘Without affecting the sale price is a. Rs.105.20 b. Rs.29.92 cc. Rs.35.72 a. Rs.92.92 e. Rs.52.20. 221. The budgeted income statement of Multiproducts Ltd., for 2001-02 is as follows: f Parcculars [ Product A | Product B | Product C Sales 3,60,000 | 3,60,000| 4,80,000 Variable expenses: Cost of goods sold | 1,44,000 1,80,000 2,40,000 Selling and distribution 36,000} 72,000} 57,600 Fixed expenses: Production 45,000 45,000 60,000 Administrative, selling and distribution | 36,000] 36,000} 48,000 Net Income before tax 99,000 27,000 74,400 All products are manufactured in the same facilities under common administrative control. Fixed expenses are allocated among the products in proportion to their budgeted sales volume. The budgeted break even point of the company as a whole is Rs.10,98,900 Rs.12,75,100 Rs.14,13,200 Rs.6,88,424 €. Rs.4,92,982. Based on the following information answer the questions 222 and 223. The budgeted income statement of Best Products Ltd, for 2001-02 i as follows: ae se | Paniculars Product | Product B | Product C | Sales 3,60,000 | 3,60,000 | 4,80,000 | Variable expenses: ; | a 144,000 | 1,80,000 | 2,40,00 | o ve é nation 36,000} _ 72,000) $7,600 fing and distri | iad 45,000 45,000 60,000 | Prod 36,000 48,000 | Administrative, selling and distribution 36,000 ; vt a00 . 99,000 | 27,000 ! ~ == under common administrative control. Fixed nes: Al products are manufactured in the same fact their budgeted sales volume, = on to are allocated among the products in propor222, Calculate the bud; lyeted income, if half of the budgeted sales volume of Product B are shit to Product A and Product C in equal proportion, so that the total budgeted sles in pc femain same, a, s,3,36,700 b. Rs.2,25,000 ©. R54,35,000 6, RS.1,11,150 ©, Rs,95,750. 223, Compute the budgeted break even point of the company as a whole in the product mix suggested in problem no.222 above. a. Rs,3,46,535 b, Rs.2,87,092 €, R8B,51,864 A Rs,7,21,921 ¢, Rs.6,53,753. Based on the following information answer the questions 224-227. Game Company manufactures pocket electronic games, During the year 2000-01, Game Company sold 25,000 games at Ks.25 each. Total costs amounted to Rs.5,25,000 of which Rs.1,50,000 were considered fixed. In an attempt to improve is product, the company is considered replacing 2 componcs! pat i and better part casting Rs.4.50 per unit in the coming year. A new / rine would cost Rs. 18,000 with ght life depreciation on all plant assets. (Ignore income taxes). 224, ‘The break-even point (in units) of the company forthe year 2000-2001 is a. 40,000 units b. 6,500 units cc. 15,000 units d. 25,000 units ¢. 20,100 units. 225, If the company desired to earn a would be a. 26,000 units b. 22,000 units ¢. 4,500 ums , 14,000 units e 9,500 units. 226. During the year 2001-02, the company wants to keep the selling price 3 the last year and implement above proposal. Compute the number of units company to break even a. 19,125 units 26,752 umits 11,165 units 13,145 units 15,629 ums. profit of Rs.1,40,000 during 2000-01 the margin of safety he same level a8 to be sold by he b © 4 ¢250. From the above data calculate the profit of the company a Rs.9,75,200 b. Rs.6,73,500 ce Rs.10,11,120 ad Rs.11,12,300 e Rs3,10,900. 251. Venus Ltd., manufacturers a Product ‘Yee’ following data is available: ——- the following information: Selling price per unit (Rs.) -Semation: Variable cost per unit (Rs.) Fixed costs (Rs.) Sales units (units) Rs.1,69,000 Rs.1,90,100 Rs.2,90,000 Rs.3,01.250 Rs.2,21,264, pees Pp364. Sun Seren Lid., furnishes the following details for the year 2003: ‘Selling price per unit (Rs.) Variable cost per unit (Rs.) Fixed costs (Rs.) Sales units (units) You are required to calculate margin of safety. a. Rs.22,12,500 b. Rs.24,24,400 c. Rs.30,90,600 d-Rs.11,87,500 e. Rs.7,21,200. 255. Cindrelta Co. Lid., furnishes the following data for the year 2002: Calculate margin of safety a. Rs.9,00,262 b. Rs.6,72,000 c. Rs.5,42,100 dé. Rs11,12,400 €. Rs.14,70,600. 256. Manovega Ltd., furnishers the following details for the year 2003: Compute margin of safety a. Rs.20,24,250 b. Rs.16,15,443 ©. Rs.12,45,000 4. Rs.11,10,200 ©. Rs.9,45,000. 257. Vayuvega Lid., manufactures a Product ‘XYZ’. Following information for the year 2002 is Provided:Compute profit of the company for the year 2002. a. Rs.6,60,642.30 b. — Rs.9,40,921.75 ce, Rs.10,11,222.85 d. — Rs.1,20,565.65 e. Rs.3,16,662.50. 258. The following information is provided for 2003. Selling price per unit (Rs.) Fixed costs (Rs.) Margin of safety Variable cost per unit (Rs.) 175 3,25,000 60% 65 It is estimated that variable will go up by 15% and fixed costs are expected to go up by 8% in Calculate the selling price that is to be fixed in order to earn the same P/V ratio as in 2003: 2004. a. Rs.201.27 b. Rs.290,92 c. Rs.305.68 d. Rs.325.27 e. Rs.190.11. 259. Following information is provided for the year 19XX: PIV ratio 30% Margin of safety 40% Sales Rs.12,00,000 Compute the fixed cost. a. Rs.3,90,800 b. Rs.2,16,000 c. Rs.5,20,500 d. — Rs.1,10,200 e. Rs.98,200. Based on the following information answer the questions 260 and 261. ‘Swagath Ltd., manufactures a Product ‘ANX’, It is operating at 50% capacity and manufactures 20,000 kgs of ‘ANX’. The following information is provided: Rs. Direct Material cost per unit 25 Direct Labor cost per unit 10 Variable overheads per unit 12 Selling price per unit 0 Fixed costs 1,00,000 260. If the management decides to utilize 60% capacity by reducing the selling price by 5%, what would be the profit? a. Rs.7,80,000. b. _ Rs.10,21,900. c. _ Rs.4,52,000. d. Rs.6,99,800. e. Rs.8,62,400.1, Find out break even point (in rupees) at 60% level 161. a. Rs.3,04,321 b, Rs.5,08,937 cc. Rs.1,02,443 4 Rs.90,000 e. Rs.56,687. Based on the following information answer the Questions 262 and 263. ‘swama Lekha Ltd., manufactures a product “VVF". The following details are furnished: Direct Material cost per unit Direct Labor cost per unit Variable overheads per unit Selling price per unit Sales units Fixed costs The factory is at present operating at 60% and Wants to increase its ¢: 90% operating level there would be decrease in selling decrease in Labor cost and Variable overheads by 10%. ‘apacity utilization to 90%. At Price by 8%, Moreover, there would be 262. Compute the break even point in rupees at 90% operating level, a, Rs.20,75,000 b. Rs.12,70,054 c. Rs,6,12,092 4. Rs.9,24,197 © -Rs.24,16,244. 263. Compute the Profit to be earned by the company at 90% operating level. a. Rs.6,90,700 b Rs.8,10,200 © Rs.10,11,120 a. Rs,.3,36,500 © — Rs.1,11,750, 7: Chandra Kanha Lid, manufactures three Products °C °K? and available: The following data is Selling price per unit | Variable cost per unit | No. of units sold Rs.25 Rs.10 10,000 K Rs.30 Ral? “ M eto Rsl2 10,000 The fixed expenses are Rs.2,80,000. The composite PY ratio would be a 92.84%, 8 $5 6706 ® 64.21% 4s 19% 45.249,310. The following details w.e.f 2002 are provided: cr Rs. Selling price per unit 62.00 Variable cost per unit Direct materials 26.00 Direct Labor 14.00 Direct expenses 10.00 Variable overheads 5.00 following changes in costs. Fixed expenses amount to Rs.4,60,000. For the year 2003, the management expects the Rs. Variable costs: Direct material 28.00 Director Labor 14.50 Direct expenses 9.50 Variable overhead 6.50 ‘The fixed costs are expected to increase by Rs.1,40,000. Find out the difference between the break even point which is computed be fore and after the changes in costs. a, Rs.65,45,067 b. — Rs.69,00,500 c. Rs.71,00, 000 d. — Rs.60,29,227 e. Rs.59,15,225. Based on the following information answer the questions 311 to 315. Swastik Manufacturers has an installed capacity of 60,000 units. At present the company is operating at 60% operating level. The following cost data is provided: Rs. Selling price per unit Variable cost per unit: Direct material Direct labor Direct expenses Fixed overheads 311. Compute to Rs.5, a. Rs.18,10,000 b. Rs.25,60,500 c. Rs.27,90,910° 4. e. Rs.22,00,000 Rs.26,00,000. 312. a. 23.61% 24.92% 27.66% 30.00% 32.92%. gees 80.00 30.00 20.00 10.00 5,50,000 ,000. Sales in rupees at the present level of ‘activity. Compute the margin of safety % at present level1s Cont 12,0,000 ._ Rs-10,80,000 <. Rs8,40,000 4, Rs.11,10,900 Rs.11,90,199. ate margin of safety at the operating level of 70% 4, Find out the amount of sales that are to be increased in order to earn a profit of Rs.3,75,000. 4315, Find out the Break-even point as a percentage of installed capacity. e 3h a, R8.3,75,000 b. _Rs.8,20,000 c. Rs8,66,900 4. Rs8,91,250 e, _Rs.8,72,000. a. 40.22% b. 41.77% c. 42.80% d. 45.83% e. 48.00%. 316. The following information is extracted from the cost records of ABC Ltd. Selling price per unit Material price per unit Labor cost per unit Direct expenses per unit Operating level (60%) Fixed overheads amount to Rs.200.00 Rs.90.00 Rs.30.00 Rs.15.00 Rs50,000 units Rs.2,10,000. S%. a 30% b. 35.71% c. 41,23% d. 44.35% © 48.21%. Find out the revised break even sales if there is an increase in the selling price per unit by 317, Honey Bee Ltd., produces a product ‘HB’, The following cost is provided: Rs. Sales Variable 16,00,000 6,00,000 Contribution Fixed cost 10,00,000 3,75,000 Profit & Decrease by Rs.1,60,000 b. Increase by Rs.1,10,000 ® Decrease by Rs.2,10,000 a. Decrease by Rs.1,89,900 e oe Ifthe variable costs are increased by 10%, the profi Decrease by Rs.1,90,500. 6,25,000 it would be 245318, The following details are extracted from the books of XYZ Co.: Operating Level (80%) Sales Revenue Variable costs Fixed costs 80,000 units Rs.20,00,000 Rs.9,50,000 Rs.2,$0,000 You are required to find out the BEP as a ‘% of installed capacity. a. 27.92% b. 25.13% c. 24.63% d 19.05% €. 28.91%, Based on the following information answer the questions 319 and 320. Super Dreamz Ltd., produces two Products Pyand P2. below: The selling price and cost data are given Pi P Selling price per unit Variable cost per unit Direct materials (2 kgs. per unit) Direct Labor (2.5 hrs/unit) Direct expenses 80 40 10 3 85 42 Further information: Ta P, | 12,000 Rs.1,50,000 Demand (units) Fixed costs 15,000 1,10,000 319, Find out the profi/loss if only 40,000 kgs. of raw material is available. a. Profit of Rs.8,90,000 b. Profit of Rs.4,02,000 c. Profit of Rs.4,61,000 d, Loss of Rs.12,60,000 ¢. Loss of Rs.12,81,900. 320. 56,200 hours. a, Profit of Rs.8,75,000 b. Loss of Rs.13,32,500 ¢. Loss of Rs.8,75,000 d. Profit of Rs.11,25,500 e. Profit of Rs.13,32,500. Find out the profivloss for the company as a whole if available direct Labor hours are only340. Aifa Lid manufactures and sells product °B’. The sale price per unit of the product is Rs.35, ‘The company will incur a loss of Rs.5.00 per unit if it sells 4,000 units and if the volume ig raised to 12,000 units, the company will make a profit of Rs.4.50 per unit. The break even point in units is a 5,700 b. 6,612 «5,250 4. 6,162 e. 6,006. 341. The sales value of AXN Ltd. for the year 2002-03 was Rs.15,65,560 which was more than the previous year sales by Rs.84,000 and the profit for the year 2002-03 was Rs.19,320 greater than the previous year. The fixed cost of the company for the year 2002-03 ‘was Rs.3,80,000. The profit or loss for the year 2003-04 on a forecast sales value of Rs.18,20,000is a. Rs.19,921 (loss) b. Rs.39,241 (loss) c. Rs.30,600 (profit) d. _Rs.38,600 (profit) €. Rs.601 (profit). Decisions Involving Alternative Choices X Co., Ltd., is estimated to be operating at 75% capacity for the next financial year. The details of which are given below: Sales 9,000 units at Rs.32 Less: Direct materials Direct Wages Production Overhead: Fixed Variable Gross Profit ; 1,02,000 Less: Administration selling and distribution costs: Fixed 36,000 Variable 27,000 63,000 Net profit tI 39,000 342. The break even point in sales is a. Rs.1,54,000 b. Rs.1,92,000 c. Rs.3,02,500 d. — Rs.2,75,000 e. Rs.2,92,000. 343. If the selling price were reduced to Rs.28, the increased demand would utilize 90% of the company’s capacity without any additional expenditure. The management should Reject the proposal as net income is Rs.19,200 ‘Accept the proposal as net income is Rs.19,200 Reject the proposal as net income is Rs.29,500 Reject the proposal as net income is Rs.31,500 Accept the proposal as net income is Rs.45,000, spore 252344, To attract sufficient demand to utilize full ca hee ‘pacity would require a 15% reduction in the current selling price and Rs.5,000 advertising cost. Advise the management on the future course of action. a. Accept the proposal as net income is Rs.25,000 b. Accept the proposal as net income is Rs.31,200 ¢. Accept the proposal as net income is Rs.21,570 4. Reject the proposal as net income is Rs.15,400 - ¢. Reject the proposal as net income is Rs.10,900. 345, It is predicted that if the company opts for a special marketing campaign at an additional advertising cost of Rs.15,000 it can operate at full capacity and maintain its selling price at Rs.32. Advise the management on the future course of action. a spo Accept the proposal as net profit is Rs.63,000 Accept the proposal as net profit is Rs.39,200 Reject the proposal as net profit is Rs.40,100 Reject the proposal as net profit is Rs.75,000 Reject the proposal as net profit is Rs.60,900. Based on the following information answer the questions 346 and 347 The X Co. Ltd., is planning to open a petrol station. The selling price of diesel would be Rs.4.40 per litre. The variable charges including cost of diesel, vending etc., is about Rs.4.00 per litre. ‘The fixed costs for a month are 346. The Rent Taxes Labor wages Employee welfare Electricity (24 hour continuous operation) Other fixed costs break even point in rupees for the month if the above costs are applied aes e. 347. The a b, © da Rs,90,140 Rs.1,05,600 Rs.2,10,000 Rs.30,120 Rs.74,910. break even point in rupees for the month if the rent was increased by 75% Rs.91,410 Rs.75,620 Rs.40,560 Rs.1,10,220 Rs.1,75,750. 8. The break even point in rupees for the month if the rent remained at Rs.2,000 but commission °FRS.0.02 was given to the employees as a group bonus for every litre sold is a b& cs a i Rs.61,122 Rs.1,10,250 Rs.78,852 Rs.50,555 Rs.1,25,650.NY 349. Find out the break even point in rupees if the selling ‘commission was paid but the rent remained at Rs.2,000. a. Rs.1,10,620 b. Rs.97,610 ©. Rs.1,27,925 d.— Rs.79,600 €. Rs.62,580. 350, The X Co. Ltd., is planning to open a Rs.4.40 per liter. The variable charges i per liter. The fixed costs for a month are: Rs. Rent 2,000 Taxes 1,000 Labor wages 3,000 Employee welfare 400 Electricity 300 (24 hour continuous operation) Other fixed costs Ho State how many liters would need to be sold original form to achieve profit of Rs.2,800. a, 24,025 liters b. 35,675 liters ©. 40,195 liters d. 14,485 liters e. 50,625 liters. Based on the following information answer the questions 351.353. A trading company sells three Products A, B and C in two areas North and South. The information for the year 2002 is as follows: Price is reduced to Rs.4.39 and no petrol station. The selling price of diesel would be including cost of diesel, vending etc., is about Rs.4.00 Per month at Rs.4.40 if the costs were in the Selling 188 Distribution ° Advertising a Administration 376 648 340 256 No.of orders Volume sold Units sold Sales value A B c Selling Price/Unit Rs.40 Rs.48 Rs.60 Purchase Price/Unit Rs.32 Rs.36 Rs.44 Sales in units: North 92,000 40,000. 28,000 South 30,000 40,000 40,000 Number of Orders: North 40,000 20,000 10,000 South 6,000 10,000 8,000 Volume of cu.mfunit 20 | 4s ro | Rupees thousand ts Other Cos Variable | "Fixed [Basis of appontionmemt351. Find out the budgeted Profit/Loss for 2002 for North, a. _ Rs.1,50,600 Loss . b. _Rs.2,15,000 Profit c. Rs.98,000 Loss 4. Rs.55,600 Profit fe. Rs.61,200 Loss. 352. Find out the budgeted ProfiLoss for 2002 for South, a. Rs.3,92,500 Loss b. — Rs.1,90,200 Profit c. Rs.2,29,800 Profit d. Rs.4,91,700 Loss e. _ Rs.3,28,000 Profit. 353. Find out the budgeted Profit/Loss in total for 2002. a. _Rs.2,30,000 Profit b. _Rs.3,75,000 Profit c. Rs.4,10,000 Profit 4. Rs.3,75,000 Loss fe. Rs.1,16,200 Profit. 354. X Co., Ltd., manufactures a Product Y production capacity of the factory is 1,50,000 units per annum. The summarized Profit and Loss account for the year is given: Rs. Sales @ Rs.15 per unit 15,00,000 Direct Materials 3,00,000 Direct Labor 1,00,000 Production overhead: Variable 50,000 Fixed 2,00,000 Administration overhead: Fixed 75,000 | Selling overhead: Variable 75,000 Fixed 1,75,000 soft = ovement. He wanted to he chai ‘aging of the product required imp! ean ensied eam 8 ae fit of 10% on tumover with know the sales required to earn a target profit 0” itis improved packing at an additional cost of 30 paise per unt the introduction of an 4% Rs.11,12,300.15 >. Rs.12,24,360.40 & Rs.8,49,056.60 4 Rs.10,25,600.86 Rs. 6,40,920.75. ass388, X Co, Lid, manufactures a Product ABX production capacity ofthe f Factory is 1,50,000 unit Pet annum. The summarized Profit and Loss account for the year is given {he MD conveyed to the board that a large retailer was interested to take a regular order of 30,000 units per annum ata special price. This would in no way affect the volume or price of the regular sales of the company. Selling and Distribution coc @ 0.40ps will be saved oa Menae because the realr was prepared to collect the podvet howe Narshouse at regular intervals only special packaging would be Tequired for display purposes and this would cost an additional 20 paise per unit, He wanted to know for this information paren Pmt a which te special order woud break even ante is wee Purposes, providing a contribution of Rs.60,000, Rs.11.15 Rs.7.05 Rs.10.15 Rs3.13 RS.4.15. 356. ACE Co. Lid., manufactures a Product B Per annum. The summarized Prof paar e Production capacity of the factory is 1,$0,000 unit Sales @ Rs.15 per unit Drrect Materials Direct Labor Production overhead: Variable Fixed Administration overhead: Fixed a. Rs.14,60,000 Find ou the total profit in this case, b. — Rs.2,70,000 c. Rs5,65,000 4. Rs8,40,000 ¢. —Rs.11,10,000,357. Super Co. Ltd., manufactures a Product AAA. Production it is ; a capacity of the factory is 1,50,000 units per annum. The summarized Profit and Loss account for the year is given: ” Sales @ Rs.15 per unit Direct Materials Direct Labor Production overhead: Variable Fixed Administration overhead: Fixed Selling overhead: Variable Fixed Profit The production manager opined that the selling price should be reduced to Rs.12 per unit in order to reach a wider sales market and thus to achieve full utilization of the production resources. Find out the profit if the advise of production manager is followed. a. Rs.5,62,500 b. Rs.9,79,200 c. Rs.2,14,100 4. Rs.11,10,300 e. Rs.10,50,600. 358. AB Ltd., manufactures a Product CD. Production capacity of the factory is 1,50,000 units per annum. The summarized Profit and Loss account for the year is given: Sales @ Rs.15 per unit Direct Materials Direct Labor Production overhead: Variable Fixed Administration overhead: Fixed Selling overhead: Variable Fixed Profit The finance director is of the opinion that aggressive adi peutt. He wondered how much that would cost if it were to improve sa ‘annum yielding a profit of 10% of the turnover. ivertisement campaign was the les to 1,40,000 units *Rs.14,10,000 6 Rs.7,05,000 q Rs.2,20,200 « B1617,180 Rs.11,72,300,389. JP Co. Ltd., manufactures a Product E. Production capacity of the factory is 1,50,000 unity 360. PQR Ltd. manufactures three per annum, The summarized Profit and Loss account for the year is given: Rs. Sales @ Rs.15 per unit 15,00,000 Direct Materials 3,00,000 Direct Labor 1,00,000 Production overhead: Variable 50,000 Fixed 2,00,000 Administration overhead: Fixed 75,000 Selling overhead: Variable 75,000 Fixed 1,75,000 Profit 5,25,000 ‘wage remuneration. At present, for a change in the method of #Rs.1.50 per unit. If group bonus scheme were introduced sal was fo set a target of 2000 units per week se in production, there would be employee would suffer 2 increased by 10% and would be The personnel director pleaded direct labor is paid a piece rate of the output would be better. The propos throughout the company’s 50 week year. For each 2% increa an increase of 1% on the basic wages of each employee. No reduction in basic wages. It was forecast that if the selling price were advertising were increased by Rs.1,50,000, sales of 1,20,000 units per annum achieved. Find out the net profit if the advise of personnel director is followed: a. Rs.5,60,000 b. Rs.10,10,000 c. Rs.9,18,000 d. — Rs.12,45,000 e. Rs.14,50,000. components - P, Q, and R, The company has furnished the g to the cost per unit of three products: following information pertainin; Particulars P (Rs.) Q(Rs.) R(Rs.) Fixed cost 7.00 5.00 4.50 Variable cost 8.00 6.00 6.00 Total cost 15.00 11.00 [ 10.50 / jie components to PQR Lid, at the following pris Alwin Company has offered to supply tl p- Rs.10.00 per unit Q- Rs.5.00 per unit R- Rs.7.50 per unit Which of the following decisions she Make all the three components. Buy all the three components. Make component P and buy components Q and R. Make components P and Q and buy component R. Make components P and R and buy component Q ould be considered by PQR Ltd.? aes Bp361. Ranbax Ltd. manufactures two products ~ ‘R and B, Production capacity of the company is limited to 30,000 machine hours per annum. There is no restriction on direct labor hours. The company has furnished the following information pertaining to two products: Particulars Product R | Product B Estimated demand (units) 3,000 4,500 Selling price per unit (Rs.) 20 18 Variable cost per unit 8 9 Fixed cost per unit 6 5 Machine hours per unit 5 4 Direct labor hours per unit 35 2 The company absorbs cost at a rate pet machine hour based upon full capacity. The number of units of product R and B to be produced per annum in order to maximize the profit are 3,000 units 4,500 units respectively 2,400 units 4,500 units respectively 2,400 units 3,750 units respectively 3,000 units 3,750 units respectively € 3,000 units 3,000 units respectively. Marphy Company manufactures radios, which are sold at Rs.1,600 per unit. The total cost consists of 30% for direct materials, 40% for direct wages and 30% for overheads. An increase in material price by 30% and in wage rates by 10% is expected in the forthcoming year, as a result of which the profit at current selling price may decrease by 40% of the present profit per unit. The current and future profit at present selling price are a. Rs.208.00 and Rs,235.47 respectively b. _ Rs.520.00 and Rs.587.60 respectively c. Rs.392.45 and Rs.235.47 respectively d. Rs.235.47 and Rs.392.45 respectively €. Rs.392.45 and Rs.277.38 respectively. 63. N-Joy Ltd. manufactures three components — A, B, and C. The company has furnished the following information pertaining to the cost per unit of the three products: sae ge 362. Particulars A(Rs.) B(Rs.) | C(Rs.) Fixed cost 3 3 5 Variable cost 1 7 13 Total cost 14 20 18 Alwin Company has offered to supply the components to N-Joy Ltd at the following prices: A~ Rs.13 per unit B— Rs.16 per unit C~ Rs.20 per unit Which of the following decisions made by N-Joy Ltd. is most profitable? &- Make all the three components. Buy all the three components. Make component C and buy components A and B. Make components A and B and buy component C. Make components A and C and buy component B.