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    Name Batch Teacher: Saba Nayyar Date Teacher Asstt: Shahab Marks 30

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    This document contains a 15 question multiple choice test on managing costs and finances. The questions cover topics like calculating break-even point, contribution margin, profit and loss, and interpreting cost-volume-profit graphs. The correct answers are provided for each question.

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    Name Batch Teacher: Saba Nayyar Date Teacher Asstt: Shahab Marks 30

    Uploaded by

    shahab
    60 views4 pages
    This document contains a 15 question multiple choice test on managing costs and finances. The questions cover topics like calculating break-even point, contribution margin, profit and loss, and interpreting cost-volume-profit graphs. The correct answers are provided for each question.

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    This document contains a 15 question multiple choice test on managing costs and finances. The questions cover topics like calculating break-even point, contribution margin, profit and loss, and interpreting cost-volume-profit graphs. The correct answers are provided for each question.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    60 views4 pages

    Name Batch Teacher: Saba Nayyar Date Teacher Asstt: Shahab Marks 30

    Uploaded by

    shahab
    This document contains a 15 question multiple choice test on managing costs and finances. The questions cover topics like calculating break-even point, contribution margin, profit and loss, and interpreting cost-volume-profit graphs. The correct answers are provided for each question.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    MA2 Managing Cost & Finances Test

    Name
    Batch Teacher: Saba Nayyar
    Date Teacher Asstt: Shahab
    Marks 30

    1.

    Contribution/unit: $2400,000/200,000=$12

    BEP: $1800,000/$12=150,000units

    MOS:200,000-150,000=50000units

    2. What is the BEP as measured in sales?


    A. Fixed cost ÷ c/s ratio
    B. Fixed cost x contribution per unit
    C. Fixed cost ÷ contribution per unit
    D. Fixed x c/s ratio

    Fixed cost ÷ c/s ratio

    3.

    Total fixed cost equal total contribution

    1
    MA2 Managing Cost & Finances Test

    4.

    What the marked area ABC & 0PD represents?

    ABC: variable cost 0PD: sales revenue

    5.

    A. It is impossible to say without more information


    B. It will remain constant
    C. It will fall
    D. It will rise

    6. Selling price per unit = $90; total absorption costs per unit = $70; marginal cost per unit =
    $50. Budgeted production = 2,000 units.
    What is the profit or loss if 1,500 units are made and sold?
    A. $60,000 profit
    B. $20,000 loss
    C. $40,000 profit
    D. $20,000 profit
    D Fixed overhead per unit = 70 – 50 = 20.
    Budgeted fixed overheads = $20 x 2,000 = $40,000.
    If 1,500 units are made, contribution = 1,500 x (90 – 50) = $60,000.
    Therefore a profit of $20,000 = $60,000 - $40,000 is expected

    7.

    Ans: Contribution/unit= f.cost/unit+profit margin/unit


    f.cost/unit =96000/12000=$8
    profit margin/unit =40-8=32x.25=$8
    contribution=8+8=16

    8. A product has a C/S ratio of 30%.


    If contribution is $75/unit what is the variable cost per unit?
    A $225 B $250 C $175 D $150
    75/30*70=175

    2
    MA2 Managing Cost & Finances Test

    9. A product makes a profit of $50 per unit and a contribution of $80 per unit. Fixed costs are
    $220,000.
    How many units will need to be made and sold to make a profit of $100,000?
    A 2,000 B 4,000 C 6,400 D 4,750
    (220000+100000)/80=4000
    10. Currently a product has marginal costs of $40 and a selling price of $60. Fixed costs are
    $120,000 and 10,000 units are sold. Inflation will increase both marginal costs and fixed
    costs by 10%, but competition means that the selling price can be increased by 5% only.
    What volume will have to be sold if the same profits are to be earned?
    A 6,000 B 11,000 C 10,526 D 11,158
    D Current profits = (60 – 40) x 10,000 – 120,000 = $80,000.
    If the same profits are to be made, the new contribution must be
    $80,000 + $120,000 x 1.10 = $212,000.
    New contribution per unit = 60 x 1.05 – 40 x 1.1 = 19
    Required volume = 212,000/19 = 11,158

    11. Currently a product has marginal costs of $45 and a selling price of $70. 200,000 units are
    sold and fixed costs are $3 million.
    If the selling price were reduced by $5, by how many units would the volume sold have
    to increase to earn the same profit?
    A 50,000 B 250,000 C 15,385 D 40,000
    Current Fixed cost/unit=$3M/200000=15
    Profit/unit=selling price/unit-marginal cost/unit-fixed cost/unit
    =70-45-(3m/200000)
    =10
    After changing the selling price by $5
    Target sales=target profit +fixed cost/contribution per unit new contribution/unit:65-45
    =$2m+$3m/$20
    =250000units

    12. Where is profit on the following diagram?

    A Line A B Line B C Line C D Line D

    3
    MA2 Managing Cost & Finances Test

    13. Where is the margin of safety on the following diagram?

    A Line A B Line B C Line C D Line D

    14. When is the breakeven point achieved?


    A When the level of contribution is equal to total costs
    B When the total variable costs are equal to total contributions
    C When the total variable costs are equal to total fixed costs
    D When the total contribution is equal to total fixed costs

    15. Which of the following describes the margin of safety?


    A The total sales units up to break-even sales volume
    B The difference in units between the expected sales volume and the break-even sales
    volume
    C The difference between sales value and variable costs
    D The difference between total costs and the fixed costs at break-even sales volume

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