CS Executive Test
CMA
1. The following information is given:
Selling price is Rs. 20 per unit, Variable cost is Rs. 15 per unit and Fixed Cost is Rs. 48000. What will be BEP(in Rs.)
and Profit if actual sales is 40% more than actual sales.
a. 1,92,000 and 20,800
b. 180,000 and 18,000
c. 96,000 and 9,600
d. 1,92,000 and 19,200
2. Statement I: when a factory operates at full capacity both fixed cost and variable cost becomes relevant
Statement II: Margin of Safety is the difference between actual sales and break even sales
a. Both the statement are correct
b. Statement I is correct and II is incorrect
c. Statement I is incorrect and II is correct
d. Both statements are incorrect
3. Selling price per unit is Rs. 20. Trade discount is 5% of selling price, cash discount is 2% on sales. Material cost is
Rs. 3, Labour cost Rs. 4, Fixed overhead is Rs. 22,000 and variable overhead 80% of labour cost. What would be
the profit if sales are 10% above Break even:
a. 2000
b. 2500
c. 2200
d. 1850
4. If profit, fixed cost and margin of safety are Rs. 19,20,000, Rs. 25,60,000 and 64,00,000 respectively then Break
even will be:
a. 44,80,000
b. 85,33,333
c. 38,40,000
d. 48,00,000
5. Product cost under marginal costing include-
a. Prime cost only
b. Prime cost and fixed overheads
c. Prime cost and variable overheads
d. Material cost and variable overheads
6. The following information relates to a product:
Direct materials: 10kg @Rs.0.50 per kg
Direct labour: 1hour 30minutes @Rs.4 per hour
Variable overheads: 1hour 30minutes @Rs.1 per hour.
Fixed overheads @Rs.2 per hour(based on a budgeted production volume of 90,000 direct labour hours for the
year)
Selling price per unit:Rs.17
The break-even point is-
a) 40,000 units
b) Rs.40,000
c) 20,000 units
d) 7,200 units
7. A company sells its product at Rs.15 per unit. In a period, if is produces and sells 8,000
units, it incurs a loss of Rs.5 per unit. If the volume is raised to 20,000 units, it earns a
profit of Rs.4 per unit. The break-even point of the company in rupee terms will be –
a) 1,60,000
b) 2,00,000
c) 1,80,000
d) 2,20,000
8. A company which has a margin of safety of Rs.4,00,000 makes a profit of Rs.1,00,000. If
its fixed cost is Rs.5,00,000, then break-even sales is –
a) Rs.20lakhs
b) Rs.25lakhs
c) Rs.12.5lakhs
d) Rs.15lakhs
9. The P/v ratio of a company is 50% and margin of safety is 40%. If present sales is Rs. 30,00,000 then Break Even
Point in Rs. will be
a. Rs. 9,00,000
b. Rs. 18,00,000
c. Rs. 5,00,000
d. None of the above
10. In ‘make or buy’ decision, it is profitable to buy from outside only when the supplier’s price is below the firm’s
own ______________.
a. Fixed Cost
b. Variable Cost
c. Total Cost
d. Prime Cost
11. 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
12. (In link to Q11) 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
13. (In link to Q11 & 12)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
14. If the actual production is lower than the budgeted production which of these will be lower than budgeted cost:
a. Variable cost per unit
b. Total variable cost
c. Fixed cost
d. None
15. An increase in variable cost will:
a. Increase P/V ratio
b. Decrease contribution margin
c. Increase new profit
d. None of the above
16. Following are the uses of CVP analysis except:
a. Estimating future profit
b. Deciding selling price of a product
c. Analyzing margin of safety in budget
d. Analyse cash flow
17. Identify the incorrect statement
a. Abnormal profits may be earned in case of monopolist market
b. Arms length price is the price between two unrelated parties
c. Transfer pricing is not applicable in case of unrelated parties
d. Valuation of Intangibles is a difficult task in transfer pricing
18. Which of the following method considers the opportunity cost of product:
a. Marginal cost method
b. Full product cost method
c. Market price method
d. Negotiated price
19. Which method is applied to interrelated transactions when it is not possible to evaluate them separately
a. Comparable Uncontrolled Price (CUP) Method
b. Resale Price Method
c. Profit Split Method
d. Transactional Net Margin Method
20. Under which of the following levels does security & safety services come
a. Unit Level Activities
b. Batch-level Activities
c. Product Sustaining Activities
d. Facility – Sustaining Activities
