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    Ifmr - PGP Batch 18 - Management Accounting Quiz 3 A. Choose The Correct Answer (1.25 Marks Each)

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    Anu Amruth
    1. The document contains a management accounting quiz with multiple choice questions testing concepts like margin of safety, contribution, breakeven point, relevant costs, and calculations involving sales, costs, profit and margin of safety. 2. It provides information on a company's sales, contribution, margin of safety, fixed costs and profit to calculate the fixed costs as Rs. 216,000. 3. It gives sales target and unit information for a company to achieve a profit target of Rs. 165,000. 4. Finally, it provides financial information for a product to calculate its margin of safety as Rs. 230,941.

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    Ifmr - PGP Batch 18 - Management Accounting Quiz 3 A. Choose The Correct Answer (1.25 Marks Each)

    Uploaded by

    Anu Amruth
    45 views2 pages
    1. The document contains a management accounting quiz with multiple choice questions testing concepts like margin of safety, contribution, breakeven point, relevant costs, and calculations involving sales, costs, profit and margin of safety. 2. It provides information on a company's sales, contribution, margin of safety, fixed costs and profit to calculate the fixed costs as Rs. 216,000. 3. It gives sales target and unit information for a company to achieve a profit target of Rs. 165,000. 4. Finally, it provides financial information for a product to calculate its margin of safety as Rs. 230,941.

    Original Description:

    quixx cman 3

    Original Title

    QUIZ MAC 3

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    1. The document contains a management accounting quiz with multiple choice questions testing concepts like margin of safety, contribution, breakeven point, relevant costs, and calculations involving sales, costs, profit and margin of safety. 2. It provides information on a company's sales, contribution, margin of safety, fixed costs and profit to calculate the fixed costs as Rs. 216,000. 3. It gives sales target and unit information for a company to achieve a profit target of Rs. 165,000. 4. Finally, it provides financial information for a product to calculate its margin of safety as Rs. 230,941.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    45 views2 pages

    Ifmr - PGP Batch 18 - Management Accounting Quiz 3 A. Choose The Correct Answer (1.25 Marks Each)

    Uploaded by

    Anu Amruth
    1. The document contains a management accounting quiz with multiple choice questions testing concepts like margin of safety, contribution, breakeven point, relevant costs, and calculations involving sales, costs, profit and margin of safety. 2. It provides information on a company's sales, contribution, margin of safety, fixed costs and profit to calculate the fixed costs as Rs. 216,000. 3. It gives sales target and unit information for a company to achieve a profit target of Rs. 165,000. 4. Finally, it provides financial information for a product to calculate its margin of safety as Rs. 230,941.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    IFMR – PGP Batch 18 – MANAGEMENT ACCOUNTING QUIZ 3

    A. Choose the correct answer (1.25 marks each )


    1. Which of the following can improve Margin of Safety?
    a. Lowering the fixed cost
    b. Lowering the Variable cost so as to improve marginal contribution
    c. Increasing the volume of sales if capacity is available
    d. Both b & c above
    e. All – a, b & c above

    2. Contribution per unit does not depend on


    a. Selling price
    b. Direct material cost
    c. Fixed cost
    d. Direct labour
    e. Direct expenses

    3. Breakeven point is the that level of activity where


    a. Total revenue equals total cost
    b. Total revenue equals fixed cost
    c. Total revenue equals variable cost
    d. Total revenue equals product cost
    e. Both c & d above
    4. Given the sales volume, which of the following would lead to an increase in contribution
    margin?
    a. VC per unit remains the same
    b. VC per unit decreases
    c. Fixed cost decreases
    d. VC/unit increases
    e. Fixed cost increases
    5. Which of the following cost is not relevant to decision making?
    a. Out of pocket cost
    b. Differential cost
    c. Avoidable cost
    d. Historical cost
    e. Opportunity cost
    6. Sahara Ltd received an offer for a project which requires the Material ‘M’. It is not used on
    regular basis. However material M, purchased one year ago is in stock and can be utilized for
    this project. If material is not used in this project, it will have to be disposed off.

    Which of the following items is relevant with regard to the material M to decide the acceptance
    of the project?
    a. Replacement cost
    b. Realizable value
    c. Cost price
    d. Profit which can be earned by disposing M
    e. Replacement cost minus realizable value

    B. The following information is provided for FY 2016. Compute the fixed cost(marks 5)

    P/V Ratio 30%


    Margin of safety 40%
    Sales Rs 1200000
    Solution
    Contribution = 30% of Rs 12 lacs = Rs 360000
    MOS = Profit/PV Ratio
    40% of sales = Profit/30%
    Profit = 480000*30% = Rs 144000
    Fixed cost = Contribution-profit
    i.e. 360000-144000 = Rs 216000

    C. Z Ltd. Has furnished the following information as regards its product (Marks 2.5)

    Sales price per unit Rs 225


    Variable cost per unit Rs 135
    Fixed costs Rs 465000

    If the target profit is Rs 165000 sales should be 7000 units (volume) &Rs 1575000 (value)
    Note: Students may be given marks if they have mentioned either volume or value

    D. The details pertaining to a product for the month of September 2017 was (Marks 5)

    Fixed costs Rs 270000


    Net Profit Rs 157040
    Total sales Rs 628000
    Find Margin of safety for the product

    Cn = FC +Profit =Rs 427040

    PV Ratio = 427040/628000 = 68%

    MOS = Profit/PV Ratio = 230941. Alternatively students can find BE Sales and reduce the same
    from Actual sales to get above answer

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