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Cost Volume Profit Questions

This document contains 10 multiple part questions related to cost-volume-profit analysis. Each question provides various financial information such as sales revenue, units sold, variable costs, fixed costs, and profit and asks to calculate values like break-even point, contribution margin, sales required to earn a given profit, and pricing needed to achieve a profit target. The questions cover concepts like profit-volume ratio, break-even analysis, margin of safety, and determining sales levels and pricing.

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satya
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199 views2 pages

Cost Volume Profit Questions

This document contains 10 multiple part questions related to cost-volume-profit analysis. Each question provides various financial information such as sales revenue, units sold, variable costs, fixed costs, and profit and asks to calculate values like break-even point, contribution margin, sales required to earn a given profit, and pricing needed to achieve a profit target. The questions cover concepts like profit-volume ratio, break-even analysis, margin of safety, and determining sales levels and pricing.

Uploaded by

satya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Cost Volume Profit Analysis Variable cost per unit Rs.

15
Required: (a) profit volume ratio (b) BE sales volume in units and Rs. (c) Sales amount
(Q.No.1) A trading company’s income statement for the previous year is presented below; to earn after tax profit Rs.50,000 with 20% tax rate (d) What price should be charged to
Particulars Amount earn profit Rs.80,000 from selling 40,000 units.

(Q.No.6 ) Annual sales for a company for previous year was Rs.4,00,000 with selling price
Sales revenue (1,000 units @ Rs.100 each) 1,00,000 Rs.10 per units. The margin of safety ratio was 25% and profit for the year was Rs.40,000.
Less: Required: (a) Total fixed cost for the year (b) Contribution margin ratio (c) Sales volume
Variable cost @ Rs.60 60,000 at zero profit level (d) What would be the sales price per unit to earn Rs.50,000 profit
Fixed cost 20,000 from selling 20,000 units

(Q.No.7) The break even point of a company is Rs.1,20,000 and fixed cost is
Net profit Rs.30,000.The variable cost is Rs.7.5 per unit.
20,000 Required: (a) Profit volume ratio (b) Selling price per unit (c) Required sales to earn Rs.2
Required: (a) P/V ratio (b) BEP in Rs. and in Units (c) Sales amount to earn after tax profit per units in Rs.
profit Rs.40, 000 if tax rate is 25%
(Q.No. 8)
(Q.No.2) The following informations were recorded for two years of a production firm; Products Sales Units Sales Rs. Variable cost
Particulars Year 1 Year2 A 8,000 2,40,000 2,00,000
Sales revenue Rs.4,00,000 Rs.7,00,000 B 7,000 1,40,000 1,05,000

Profit Rs.50,000 Rs.1,70,000 C 5,000 2,00,000 1,50,000

Required: (a) Contribution margin ratio (b) BEP sales volume (c) Fixed cost for the year Fixed cost Rs.4,00,000
(d) Margin of safety for each years (e) Sales volume to earn profit Rs.1,00,000 Required: (a) Overall BEP in Rs. And Units (b) BEP for each product
(c) Sales volume to earn profit Rs.80,000 in Units (d) Sales amount to earn after tax profit
(Q.No.3) The given informations were extracted from the books of ABC trading house; Rs.45,000 with 10% tax rate
Particulars 1st half 2nd half (Q.No.9)
Products Sales units Selling price per Variable cost per
Sales Rs.1,00,000 Rs.2,00,000 unit unit
X 4,000 Rs. 20 Rs.15
Cost of sales/Total cost Rs.1,10,000 Rs.1,85,000 Y 6,000 Rs. 10 Rs. 6
Break Even sales 8,800 units.
Required: (a) Cost volume ratio (b) BEP sales volume (c) Contribution margin for each Required: (a) Fixed cost (b) BEP units if fixed cost increased by 20%
years (c) New BEP for reversed sales unit
(d) Profit if sales is Rs.2,50,000
(Q.No.4) A company’s book showed a total profit after tax of Rs.20,000 with 20% tax rate (Q.No.10) A company sells its 20,000 finished stock @ Rs.20 per unit. Following costs are
at a sales volume of Rs.5,00,000 and selling price per unit was Rs.100 and variable cost per incurred while producing its product:
unit was Rs.75. Raw materials 3 kg. @ Rs. 1 per kg.
Required: (a) BEP sales volume in Units and in Rs. (b) Fixed cost (c) Margin of safety Direct wages 4 hours @ Rs. 2.5 per hour
(d) Required sales in unit to earn profit Rs.20 per units (e) Sales volume to earn 10% profit Other direct expenses 20% of direct wages
Annual fixed cost for the company is Rs.2,50,000
(Q.No.5) The following information were provided to you ; Required: (a) profit volume ratio (b) BE sales volume in units and Rs. (c) Sales amount
Sales revenue Rs.6,00,000 to earn after tax profit Rs.60,000 with 25% tax rate (d) What price should be charged to
Sales unit 30,000 units earn profit Rs.1,00,000 from selling 40,000 units.
Fixed cost for the period Rs.1,00,000

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