Question 1 A.A Ltd has fixed costs of £60,000 per annum. It manufactures a single product which it sells for £20 per un
Posted: Wed May 04, 2022 6:22 am
Question 1
A.A Ltd has fixed costs of £60,000 per annum. It manufactures a single product which it sells for £20 per unit. Its contribution to sales ratio is 40 per cent. A Ltd.’s breakeven point in units is:
a) 1,200
b) 3,000
c) 5,000
d) 7,500.
B. C Ltd manufactures a single product which it sells for £9 per unit. Fixed costs are £54,000 per month and the product has a variable cost of £6 per unit. In a period when actual sales were £180,000, B Ltd.’s margin of safety, in units, was:
a) 2,000
b) 14,000
c) 18,000
d) 20,000.
C. For the forthcoming year, E plc’s variable costs are budgeted to be 60 per cent of sales value and fixed costs are budgeted to be 10 per cent of sales value. If E plc increases its selling prices by 10 per cent, but if fixed costs, variable costs per unit and sales volume remain unchanged, the effect on E plc’s contribution would be:
a) a decrease of 2 per cent.
b) an increase of 5 per cent.
c) an increase of 10 per cent.
d) an increase of 25 per cent.
A.A Ltd has fixed costs of £60,000 per annum. It manufactures a single product which it sells for £20 per unit. Its contribution to sales ratio is 40 per cent. A Ltd.’s breakeven point in units is:
a) 1,200
b) 3,000
c) 5,000
d) 7,500.
B. C Ltd manufactures a single product which it sells for £9 per unit. Fixed costs are £54,000 per month and the product has a variable cost of £6 per unit. In a period when actual sales were £180,000, B Ltd.’s margin of safety, in units, was:
a) 2,000
b) 14,000
c) 18,000
d) 20,000.
C. For the forthcoming year, E plc’s variable costs are budgeted to be 60 per cent of sales value and fixed costs are budgeted to be 10 per cent of sales value. If E plc increases its selling prices by 10 per cent, but if fixed costs, variable costs per unit and sales volume remain unchanged, the effect on E plc’s contribution would be:
a) a decrease of 2 per cent.
b) an increase of 5 per cent.
c) an increase of 10 per cent.
d) an increase of 25 per cent.