aad Wife comin pot how many units of each pany manufacture and sell ? : “(@) 200 units of X and 400 units of Y foo une ofX onc ~(€) 600 units of X and 200 units of Y (d) 800 units ; ‘ Je product. The variable cost of the ‘ pany res and sells a sing \ - oe per Rydal production each month is sold at a price of € 3.70 per unit, new customer has offered to buy 6,000 units per month at a price of € 2.95 per unit. The, has sufficient spare capacity to produce this quantiy. If the new business is accepted, sl existing customers are expected to fall by two Units for every 15 units sold to the new What would be the overall increase in monthly profit which would result from accepting business ? (a) % 1,740 (b) % 2,220 (©) €2,340 (@) 82,700 . A company manufactures four components (L, M, N and P) using the same general pupae machinery. Weekly demand is 1,500 units of each component but only 24,000 machine haus are available each week. A decision has to be made on which component to buy in froma ‘outside supplier. The following data are available : cal L M N Variable production cost per unit) 45 40 30 General purpose machinery hours per unit 3 5 4 ei Purchase price from outside supplier ® per unit) 57 55. 54 In order to minimise total cost, which component should be purchased from the outside ‘suppl | each week ? (a) Component L (b) Component M | (c) Component N (d) Component P | . A company manufactures two products (L and M) using the same material and labour. It holds ho stocks. Information about the variable costs and maximum demands are oe follawel Product L Product M unit unit Material ( 4 per litre) 13 19 Labour & 7 per houir) 35 238 Units Units Maximum monthly demand 6,000 6,000 Each month 50,000 litres of material and 60,000 labour hours are available. Which one of the following statements is correct ? i (a) Material is a limiting factor but labour is not a limiting factor (b) Material is not a limiting factor but labour is a limiting factor (6) Neither material nor labour is a limiting factor (d) Both material and labour are mica oe e . - Accompany would sell 40,000 units ofa product the unt seling price was set at 10 and total contribution of % 1,60,000. if the unit " aoe ee of 44,000 uns would result “elINg price was reduced to € 9.60 Setting unit selling prices of € 10.50 and @ 11 would result in sales of 36,000 and 31, 000 units Wea camy price would generate the highest otal contibuton, (b) & 10.00 ‘d (A) & 11.00(). (i), and (9) only (4) (i), (i), (il), and (v) only the last at iler. His avera « nths as a fast food retailer. i Rar cscs of & 1,20,000. His total expenses 5 sying an extra member of staff as he anticipates an increase in bu; in ployee willbe & 18,000 per annum. To stimulate sales, JB will also eae S jin to 30%. ne eee in sales is needed for JB to eam the same net profit in the months as he eamed in the first six months? (b) 25.00% (a) 21.66% a 35.00% ~ (A) 60.00% | Cost is the value of the alternatives foregone by adopting a particular strategy employing resources in specific manner. 4 cost is the hypothetical or notional cost not involving any actual cash payment ‘computed only for the purpose of decision - making. cost is the historical cost which is incurred in the past, and not relevant to the decision Fequired to be made by the management at present. 4. ——— cost which cannot be influenced by the concerned cost centre, Ss ests which under given conditions of performance efficiency should not have been Sh incurred. 6. Costs are inescapable costs which are essentially to be incurred, within the limits or norms provided for. 7 —— Cost is the change in cost due to change in activity from one level to another, | 6-4 MATCH THE FOLLOWING COLUMNS COLUMN A Value of the altematives foregone by adopting a particular strategy or employing resources in specific manner 2. Hypothetical cost not involving any actual cash payment computed only for the purpose of decision - making 3. Historical cost which is incurred in the past, and not relevant to the decision required to be made by the management at present Cost which cannot be influenced by the concemed cost centre 5. Cost which under given conditions of Performance efficiency should not have been incurred 6. _Inescapable cost which is essentially to be incurred, within the limits or norms provided for Change in cost due to change in activity from one level to another COLUMN B (a) Opportunity Cost (b) Controllable Cost (©) Differential Cost (4) Unavoidable Cost (©) imputed Cost (1) Avoidable Cost (9) Sunk Cost