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

18. B Mark-up percentage =
Now sales = 1,200 units ´ Rs.35 + Rs.45,000 + Rs.30,000
= Rs.42,000 + Rs.45,000 + Rs.30,000 = Rs 1,17,000
Variable cost = Rs.35 ´ 1,200 = Rs.42,000
\ Mark-up percentage = = 178.57%.
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19. C Contribution = Sales – (Direct Materials + Direct Labour + Direct Expenses)
= Rs.2,75,000 – (Rs.97,600 + Rs.79,450 + Rs.14,075)
= Rs.2,75,000 – Rs.1,91,125 = Rs.83,875.
P/V Ratio = ´ 100 = ´ 100 = 30.50%.
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20. D Contribution to sales ratio = change of profit ÷ change of sales
= Rs.3,200 ÷ Rs.8,000 = 0.40 = 40%
Break-even point:
Sales x contribution to sales ratio = Fixed cost + Profit
Rs.64,000 ´ 40% = Fixed cost + Rs.8,000
Fixed cost = Rs.25,600 – Rs.8,000 = Rs.17,600. < TOP >
21. C All the items mentioned in (a), (b), (d) and (e), come under the subtractive approach for calculation for value added other than wages and salaries. This item comes under additive approach. Hence (c) is the accurate ans. < TOP >
22. B If the sale price is Rs.100, the profit is 25% i.e. Rs.25. Therefore, the cost is Rs.75. So, the profit mark-up on cost is Rs.25 ÷ Rs.75 i.e. 33.33%. < TOP >
23. C Total fixed cost = Rs.18,60,000
Expected profit = Rs.3,00,000
Variable cost at 60% level
(60% × 3,00,000 units × Rs.33) = Rs.59,40,000
Total price = Rs.18,60,000 + Rs.3,00,000 + Rs.59,40,000 = Rs.81,00,000
Sale per unit price at 60% level = Rs.81,00,000/ (3,00,000 ´ 60%) = Rs.45. < TOP >
24. E
Particulars Present Future
Per unit
(Rs.) 50,000 units
(Rs.) Per unit
(Rs.)
Sales 20.00 10,00,000 20.00
Direct material and labor cost 8.00 10.80
Works overhead 2.50 2.50
Sales expenses 0.50 0.50
Total Variable costs 11.00 5,50,000 13.80
Contribution 9.00 4,50,000 6.20
Contribution for additional 20,000 toys will be Rs.6.20 × 20,000 toys = Rs.1,24,000. < TOP >
25. D Return on investment (ROI) equals to income divided by invested capital. If a firm is already profitable, increasing sales and expenses by the identical percentage will increase the ROI. Other choices provided in (a), (b), (c) and (e) are not accurate. < TOP >
26. A Under full cost pricing, the normal mark-up is not based on sales value. It is generally based on total cost or variable cost to recover profit and/or fixed cost. Under full cost pricing, sellers do not take advantage of the buyers when demand for the goods is very high, pricing decision may be influenced by internal factors and contribution margin approach to pricing is concerned with the cost, quantity and profit. Therefore (a) is accurate ans. < TOP >

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