Following information has been extracted from the books of Ali & Co to calculate the contribution sales ratio.

Sales price per unit Rs. 20
Variable cost per unit Rs. 15

• A) 0.75
• B) 35.00
• C) 5.00
• D) 0.25

Sales price per unit= Rs.80,000
Units sold= 1000 units
Variable cost per unit=Rs.68
Contribution margin= ?

• A) Rs.80,000
• B) Rs.120,000
• C) Rs.68,000
• D) Rs.800,000

Sales value of product D after further processing is of Rs. 19,000; sales value of the product at split off is of Rs. 15,000; and additional processing cost of Rs. 5,000.
Required: At what point Product D should sale and why?

• A) Further processing on product D causes higher incremental sales revenue in this case
• B) It should be sold at split off point because additional processing cost is higher than incremental sales revenue.
• C) More information is required to identify the reason
• D) It should be sold at split off point because additional processing cost is lesser than incremental costs.

Absorbed variable overhead= Rs. 300,000
Standard variable overhead= Rs. 360,000
Budgeted factory overhead= Rs. 12,00,000
Actual factory overhead= Rs. 11,60,000
Variable overhead efficiency variance= ?

• A) Rs. 60,000 Adverse
• B) Rs. 40,000 Adverse
• C) Rs. 40,000 Favorable
• D) Rs. 60,000 Favorable

An electric company produced and sold ceiling fans at Rs. 1,600 each by incurring the variable cost of Rs. 1,200 each and fixed cost of Rs. 300,000.
Required: What is contribution margin per unit?

• A) Rs.400
• B) Rs.200
• C) Rs.280
• D) Rs.300

Identify Sales Volume Profit Variance if actual units sold and budgeted sold units are 35,000 units and 45,000 units respectively. Actual sales price per unit, standard profit per unit and standard sales price per unit are Rs. 215, Rs. 39 and Rs. 205 respectively.

• A) Rs. 390,000 adverse
• B) Rs. 350,000 adverse
• C) Rs. 390,000 favorable
• D) Rs. 350,000 favorable

Actual material used= 7,000 units
Standard material usage= 8,000 units
Standard cost of maerial= 40.4 Rs. Per unit
Material usage variance= ?

• A) Rs. 1,000 Adverse
• B) Rs. 44,400 Favorable
• C) Rs. 1,000 Favorable
• D) Rs. 44,400 Adverse

Which of the following is fixed overhead variance?

• A) Efficiency variance
• B) Spending variance
• C) Volume variance
• D) None of the given options

Actual labor hours= 150,000
Standard labor hours= 165,000
Standard labor rate= 15 Rs. Per hour
Actual labor rate= 17 Rs. Per hour
Labor efficiency variance= ?

• A) Rs. 225,000 Adverse
• B) Rs. 225,000 Favorable
• C) Rs. 240,000 Adverse
• D) Rs. 240,000 Favorable

Actual hours worked= 4,400
Standard labor rate= 240 Rs. Per hour
Actual labor rate= 200 Rs. Per hour
Labor rate variance= ?

• A) Rs. 88,000 Favorable
• B) Rs. 88,000 Adverse
• C) Rs. 176,000 Favorable
• D) Rs. 176,000 Adverse

An electric company produced and sold ceiling fans at Rs. 1,600 each by incurring the variable cost of Rs. 1,200 each and fixed cost of Rs. 300,000.
Required: What is contribution margin ratio?

• A) 0.30
• B) 0.12
• C) 0.25
• D) 0.16

Following information has been extracted from ABC Company.
Actual cost incurred Rs. 39,000; Budget based on actual activity Rs. 38,000 and Standard Cost of actual output Rs. 39,500.
Required: Identify Spending Variance with the help of provided information.

• A) Rs. 1,500 adverse
• B) Rs. 1,000 favorable
• C) Rs. 1,500 favorable
• D) Rs. 1,000 adverse

Which of the given formula is correct for “labor rate variance”?

• A) (Actual hours worked) X (standard rate of per labor hour / actual rate of per labor hour)
• B) (Actual hours worked) X (actual rate of per labor hour – standard rate of per labor hour)
• C) (Actual hours worked) X (standard rate of per labor hour X actual rate of per labor hour)
• D) (Actual hours worked) X (standard rate of per labor hour + actual rate of per labor hour)

Fixed costs of XYZ company was of Rs. 2,000, and sold 30 units for Rs. 140 each. The total variable costs were Rs. 1,600. What is the net income or loss of the Company?

• A) Rs. 600 loss
• B) Rs. 600 profit
• C) Rs. 2,600 profit
• D) Rs. 2,600 loss

As per the information gathered by management of NS Mills, it was found that cost of manufacturing and cost of importing a certain component is exactly the same. Even then the management decided to manufacture the component.
Required: What is the advantage of this decision?

• A) Cost per unit increases as variable cost increase
• B) Cost per unit decreases as fixed cost is same
• C) Increased workload on supervisor
• D) Increased workload on labor

An electric company produced and sold ceiling fans at Rs. 1,500 each by incurring the variable cost of Rs. 1,200 each and fixed cost of Rs. 300,000.
Required: What is break-even point in units?

• A) Rs.1200
• B) Rs.1000
• C) Rs.1500
• D) Rs.3000

Sales value of product A after further processing is of Rs. 33,500; sales value of the product at split off is of Rs. 25,000; and additional processing cost of Rs. 15,000.
Required: Identify the incremental sales revenue for Product A.

• A) Rs. 8,500
• B) Rs. 33,000
• C) Rs. 18,500
• D) Rs. 10,000

Which of the following is not a type of variance?

• A) Material usage variance
• B) Unusual variance
• C) Labor efficiency variance
• D) Material price variance

Which of the following step is involved in decision making process in the manufacturing industry?

• A) Identify the Alternatives
• B) All of the given options
• C) Collect the Data
• D) Clarify the Decision Problem

Which of the following is a type of fixed overhead variance?

• A) Efficiency variance
• B) Spending variance
• C) Volume variance
• D) None of the given options