Marginal Costing & Profit Volume Ratio – Numerical
- Calculate contribution in each of the following independent situations:-
(i) Fixed cost Rs. 8,000, profit Rs. 5,600
(ii) Variable cost Rs. 7,000, sales Rs. 11,000
(iii) Contribution per unit Rs. 7 ; Profit Rs. 3,000, B.E. point 2,000 units - Calculate p/v ratio in each of the following independent situations:-
(i) Variable cost Rs. 60, Contribution Rs. 40
(ii) Sales Rs. 20, Variable cost Rs. 15
(iii) Ratio of Variable cost to sales 84%
(iv) Profit Rs. 5000; Sales Rs. 25,000; Fixed cost Rs. 8,000
(v) Year 1 sales Rs. 50,000; Total cost Rs. 40,000
Year 2 sales Rs. 60,000; Total cost Rs. 45,000 - The following information is given :
Sales = Rs. 2,00,000
Variable Cost = Rs. 1,20,000
Fixed Cost = Rs. 30,000
Calculate
(a) Break -even point
(b) New break-even point if selling price is reduced by 10%
(c) New break-even point if variable cost is increases by 10%
(d) New break-even point if fixed cost is increases by 10% - From the following particulars, find out the selling price per unit if Break Even Point is to be brought down to 9000 units. The following information is given :
Variable Cost per unit = Rs. 75
Fixed expenses = Rs.2,70,000
Selling price per unit = Rs. 100 - Following data is given
Fixed expenses = Rs.4,000
Break even point = Rs.10,000
Calculate
(i) P/v ratio
(ii) Profit when sales are Rs.20,000
(iii) New break even point if selling price reduced by 20 % - Cost behaviour pattern in a company is as follows :
Machine hours 5,000 ; 7,000
Cost (Rs.) 25,000 ; 30,000
Which of the following statements is true ?
(a) Variable cost per unit is Rs. 5
(b) Fixed cost per unit is Rs. 2.50
(c) Total fixed cost is Rs. 12,500
(d) Total variable cost is Rs. 17,500 - When sales increase from Rs. 40,000 to Rs. 50,000 and profit increases by Rs. 5,000, the p/v ratio is
(a) 50 %
(b) 20%
(c) 10 %
(d) Cannot be computed. - On sales of Rs. 2,00,000, fixed cost is Rs. 30,000 and P/V ratio is 40%. What is the profit ?
(a) Rs. 12,000
(b) Rs. 1,20,000
(c) Rs. 80,000
(d) Rs. 50,000 - Reliance Furniture House places before you the following trading results :
Year Units Total Costs (Rs.) Sales (Rs.) 2015 10,000 80,000 1,00,000 2016 12,000 90,000 1,20,000 Fixed cost will be :
(a) Rs.15,000
(b) Rs.10,000
(c) Rs.30,000
(d) Rs.60,000 - A factory engaged in manufacturing plastic buckets is working at 40% capacity and produces 10,000 buckets per annum. The present cost-break-up for one bucket is as under :
Materials Rs.10
Labour Rs.3
Overheads Rs.5 (60% fixed)
The selling price per bucket Rs.20. If factory operates 90% of capacity the profit will be:
(a) Rs.75,000
(b) Rs.80,000
(c) Rs.82,500
(d) Rs.92,500 - A company manufactures and sells three types of product namely A, B and C. Total sales per month is `80,000 in which the share of these three products are 50%, 30% and 20% respectively. Variable cost of these products are 60%, 50% and 40% respectively. The combined P/V Ratio will be :
(a) 49%
(b) 48%
(c) 47%
(d) 50% - A plant is operating at 60% capacity. The fixed costs are Rs.30,000, the variable costs are Rs.1,00,000 and the sales amount to Rs.1,50,000. The percentage of capacity at which the plant should operate to earn a profit of Rs.40,000 will be :
(a) 80%
(b) 84%
(c) 90%
(d) 94% - A plant produces a product in the quantity of 10,000 units at a cost of Rs.3 per unit. If 20,000 units are produced, the cost per unit will be Rs.2.50. Selling price per unit is Rs.4. The variable cost per unit will be :
(a) Rs.2
(b) Rs.3
(c) Rs.4
(d) Rs.1
Information for Q.14 to Q.16:
Information concerning A Ltd.’s single product is as follows:
Selling price – Rs. 6 per unit
Variable production cost – RS. 1.20 per unit
Variable selling cost – Rs. 0.40 per unit
Fixed production cost – Rs. 4 per unit
Fixed selling cost – Rs. 0.80 per unit.
Budgeted production and sales for the year are 10,000 units. - What is the company’s breakeven point:
(a) 8,000 units
b) 8,333 units
(c) 10,000 units
(d) 10,909 units - How many units must be sold if company wants to achieve a profit of Rs. 11,000 for the year?
(a) 2,500 units
(b) 9,833 units
(c) 10,625 units
(d) 13,409 units - It is now expected that the variable production cost per unit and the selling price per unit will each increase by 10%, and fixed production cost will rise by 25%. What will be the new break even point?
(a) 8,788 units
(b) 11,600 units
(c) 11,885 units
(d) 12,397 units - A company’s break even point is 6,000 units per annum. The selling price is Rs. 90 per unit and the variable cost is Rs. 40 per unit. What are the company’s annual fixed costs?
(a) Rs. 120
(b) Rs. 2,40,000
(c) Rs. 3,00,000
(d) Rs. 5,40,000 - A company manufactures a single product for which cost and selling price data are as follows:
Selling price per unit – Rs. 12
Variable cost per unit – Rs. 8
Fixed cost for a period – Rs. 98,000
Budgeted sales for a period – 30,000 units
The margin of safety, expressed as a percentage of budgeted sales,is:
(a) 20%
b) 25%
(c) 73%
(d) 125% - A company makes a single product and incurs fixed costs of Rs. 30,000 per annum. Variable cost per unit is Rs. 5 and each unit sells for Rs. 15. Annual sales demand is 7,000 units. The breakeven point is:
(a) 2,000 units
(b) 3,000 units
(c) 4,000 units
(d) 6,000 units - S produces and sells one product, P, for which the data are as follows:
Selling price Rs 28
Variable cost Rs 16
Fixed cost Rs 4
The fixed costs are based on a budgeted production and sales level of 25,000 units for the next period. Due to market changes both the selling price and the variable cost are expected to increase above the budgeted level in the next period.
If the selling price and variable cost per unit increase by 10% and 8% respectively, by how much must sales volume change, compared with the original budgeted level, in order to achieve the original budgeted profit for the period?
(a) 10.1% decrease
(b) 11.2% decrease
(c) 13.3% decrease
(d) 16.0% decrease