All India Management Association (AIMA) 2007 M.B.A Marketing Management Accounting for ision Making - II - Question Paper

Projected unit sales = (Rs.6,00,000 + Rs.7,20,000) ÷ Rs.30. = 44,000 units.
Current sales units = (Rs.6,00,000 + Rs.7,20,000) ÷ Rs.40 = 33,000 units.
Increase in units: 44,000 – 33,000 = 11,000 units. < TOP >
12. A
Product Sales Mix (%) Sales
(Rs. Lakh) Contribution
(Rs. Lakh)
A 34 187 29.92
B 22 121 7.26
C 44 242 31.46
Total 100 550 68.64
P/V Ratio = = .
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13. C Prime Cost = Direct materials + Direct wages + Direct expenses
Therefore prime cost = Rs.65,200 + Rs.53,300 + Rs.56,500 = Rs.1,75,000. < TOP >
14. E If the activity level is increased from 70% to 78%, the total fixed costs remain fixed. Hence, the fixed cost per unit will decrease but not in the identical proportion of 8%. Fixed cost per unit or in total does not increase with an increase in the activity level. Therefore (e) is accurate. < TOP >
15. C Break-even sales = Rs.8.4 lakh ÷ 35% = Rs.24 lakh;
Break-even sales = Total sales – Margin of safety = 100% - 36% = 64%
Total sales = Rs.24 lakh ÷ 64% = Rs.37.5 lakh
Profit of the company = 36% of Rs.37.5 lakh × 35% = Rs.13.5 lakh × 0.35 = Rs.4.725 lakh. < TOP >
16. C Value added = Sales – Operating expenses – Excise duty – Interest on bank overdraft
= Rs.1,00,000 – Rs.60,000 – Rs.5,000 – Rs.2,000 = Rs.33,000
Provision for taxation does not come under value added statement. Hence, it is to be ignored. < TOP >
17. D When we look into the relationship ranging from full cost pricing and contribution margin pricing we can conclude that although the full cost pricing and contribution margin based approach for pricing are considered distinctively various approaches, by and large, they represent to a certain degree, cost plus pricing. Hence statement (e) is actual. They are considered complementary to every other but not competing. Hence statement (a) is actual. In both the pricing models fixed costs are considered important. Hence choice (c) is actual. In both the methods, the selling prices proposed must be only tentative and they are always subjective. Hence statement (b) is also actual. However, Full cost pricing makes a normal mark up on total costs and it does not take quantity of production into consideration. On the other hand contribution margin approach to pricing is concerned about cost quantity and profit. Hence statement (d) which states that contribution margin method also makes a normal markup on total costs is false. < TOP >

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