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Buss 104 Chapter 4

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Dr. Mohammad Noor Alam

The document contains sample questions and answers about profit, sales, costs, break-even point, margin of safety and other concepts related to business management. Multiple choice questions are provided about companies and their financial information to calculate various metrics like profit, sales required to earn a target profit, variable costs and more.

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Buss 104 Chapter 4

Uploaded by

Dr. Mohammad Noor Alam
16 views3 pages
The document contains sample questions and answers about profit, sales, costs, break-even point, margin of safety and other concepts related to business management. Multiple choice questions are provided about companies and their financial information to calculate various metrics like profit, sales required to earn a target profit, variable costs and more.

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BUSS 104 CHAPTER 4

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The document contains sample questions and answers about profit, sales, costs, break-even point, margin of safety and other concepts related to business management. Multiple choice questions are provided about companies and their financial information to calculate various metrics like profit, sales required to earn a target profit, variable costs and more.

Copyright:

© All Rights Reserved
Download as DOCX, PDF, TXT or read online from Scribd
Download as docx, pdf, or txt
16 views3 pages

Buss 104 Chapter 4

Uploaded by

Dr. Mohammad Noor Alam
The document contains sample questions and answers about profit, sales, costs, break-even point, margin of safety and other concepts related to business management. Multiple choice questions are provided about companies and their financial information to calculate various metrics like profit, sales required to earn a target profit, variable costs and more.

Copyright:

© All Rights Reserved
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1.

Salalah Company have the following information:


Sales = 5000 units @ OMR 10 per unit
Break-even point = 3000 Units
Fixed cost = OMR 6000
What is the correct amount of Profit?
A. OMR 4000
B. OMR 6000
C. OMR 5000
D. None of the options
ANSWER: A

2. Salalah Company have the following information:


Total Fixed cost OMR 20000
Selling price per unit OMR 25
Variable cost per unit OMR 15
What will be the amount of sales if it is desired to earn a profit of OMR 5000?
A. OMR 62500
B. OMR 43750
C. Units 2500
D. None of the options
ANSWER: A

4. If, Total Fixed cost OMR 32000, Selling price per unit OMR 20, and Variable cost per unit OMR 12.
What will be the Margin of safety and profit if actual sales are OMR 85000?
A. Margin of Safety OMR 5000, Profit OMR 2000
B. Margin of Safety OMR 26667, Profit OMR 16000
C. Margin of Safety OMR 10000, Profit OMR 4000
D. None of the options
ANSWER: A

5. Dhofar Company have the following information:


Total Fixed cost OMR 20000
Selling price per unit OMR 25
Variable cost per unit OMR 15,
What will be the correct amount of Margin of safely at a profit of OMR 6000?
A. OMR 15000
B. OMR 13333
C. OMR 20000
D. None of the options
ANSWER: A

6. Dhofar Company have the following information:


Total Fixed cost OMR 8000
Selling price per unit OMR 20
Variable cost per unit OMR 12,
What will be the correct amount of Profit when 2500 Units have been sold?
A. OMR 12000
B. OMR 20000
C. OMR 10000
D. None of the options
ANSWER: A

7. Salalah Company have the following information:


Total Sales (Amount) = OMR 80000
Selling Price per Unit= OMR 20 per unit
Break-even point = 3000 units
Fixed cost = OMR 15000
What is the correct amount of Total Variable Cost?
A. OMR 60000
B. OMR 65000
C. OMR 50000
D. None of the options
ANSWER: A

8. The sales and profit for two years are as below:


Sales Profit
2020 250000 40000
2019 100000 10000
What will be the correct option of Profit when sales OMR 500000 are given?
A. OMR 90000
B. OMR 80000
C. OMR 50000
D. None of the options
ANSWER: A

9. The sales and profit for two years are as below:


Sales Profit
2019 25000 8000
2020 20000 5000
What will be the correct option for Sales required to earn a profit of OMR 17000?
A. OMR 40000
B. OMR 35000
C. OMR 45000
D. None of the options
ANSWER: A

10. The sales and profit for two years are as below:
Sales Profit
2019 250000 40000
2020 100000 10000
What will be the correct option for Variable cost of year 2019?
A. OMR 80000
B. OMR 90000
C. OMR 70000
D. None of the options
ANSWER: A

11. Which of the following is the indicator of the rate at which company is earning profit?
A. Profit volume ratio
B. Contribution margin
C. Margin of safety
D. All options are correct
ANSWER: A

12. Profit volume ratio is used for the calculation of:


A. For all options provided
B. Profit at given sales
C. Profit when margin of safety is given
D. Breakeven point
ANSWER: A

13. Which of the following is called minimum point of production at which total cost is recovered:
A. Break-even point
B. Margin of safety
C. Contribution margin
D. Fixed cost
ANSWER: A

14. Which of the following is the indicator of the sound business


A. Margin of safety
B. Contribution margin
C. Profit volume ratio
D. Break even point
ANSWER: A

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