Reference no: EM133164232
Question 1:
Thyme Ltd manufactures cameras. The company wants to achieve a target profit of £150,000 per year. They have annual fixed costs of £500,000, variable costs of £100 per camera, and they sell the cameras for £300 each. How many cameras do they need to sell to achieve their target profit?
Question 1 options:
3250 cameras
2500 cameras
2167 cameras
1625 cameras
Question 2:
A company makes office chairs. It has fixed costs of £180,000. Its variable labour cost is £25 per unit and its cost of materials is £50 per unit. It sells its chairs for £250 each. What is the Break Even Point (BEP) in units?
options:
1029 units
72 units
800 units
900 units
Question 3:
Which of the following is a disadvantage of the Net Present Value method of investment appraisal?
options:
NPV uses profit in its calculation, which can be subjective
NPV does not use all the cash flows of a project
NPV does not consider the time value of money
NPV uses complex discount rates, which can be difficult to determine
Question 4:
A manufacturing company has electricity costs which are £4,000 when 6200 units are manufactured. The electricity costs are £2,900 when 4000 units are manufactured. What would the electricity cost be if 7,200 units were manufactured?
options:
£5,220
£4,500
£4,645
£4,400
Question 5:
An electricity bill covers the 3 months from December 2020 to February 2021. The bill is not received until March 2021. The bill comes to £450, and electricity is believed to be used evenly across the period. What adjustment is required for electricity cost at the end of December 2020?
options:
£150 prepayment
£150 accrual
£450 prepayment
£450 accrual
Question 6:
Which of the following is the definition of the internal rate of return (IRR)?
options:
The discount rate at which the NPV (Net present value) of a project comes to zero
The interest rate which makes a project profitable
The NPV (Net present value) at which a discount rate of a project is zero
The amount of profit made by a company as a percentage of its initial investment in a project
Question 7:
The interest cover ratio of a company has fallen. What could be a possible cause?
options:
The company has repaid its overdraft
The company has made more operating profit
The bank has charged a lower interest rate
The company has taken out new loans
Question 8:
The gross margin of a company has fallen. What is the most likely cause?
options:
The company has purchased new fixed assets during the year
The raw material prices have increased
The cost of advertising has increased
The interest rate on the company's bank loan has increased
Question 9:
A company has the following costs and incomes during the year:
|
£'000
|
Depreciation expense
|
(200)
|
Cost of sales
|
(1,580)
|
Advertising
|
(270)
|
Insurance
|
(600)
|
Sales income
|
4,750
|
Interest expense
|
(50)
|
What is the gross profit for the year?
Question 19 options:
£2,370,000
£2,970,000
£3,170,000
£2,320,000
Question 10
The materials budget for 500 items is £750. What would be the flexed materials budget if the company made 700 items?
options:
536
1050
500
900