CAT4MBA

Please solve the unsolved question 38 –40  (page 90)

The following table shows the relationship between production volumes, unit price and unit cost of a particular product. Refer to the following table to answer the question that follows :

Contribution = Volume x (Price – Cost)

Q38. At what volume will the contribution be maximum?
a. 2,000 units
b. 3,000 units
c. 4,000 units
d. 5,000 units

Q39. If the unit cost goes down by Rs 10 at all levels of production, what will be the maximum possible contribution (Rs)?
a. Rs. 75,000
b. Rs. 1,25,000
c. Rs. 1,20,000
d. Rs. 80,000

Q40. A breakeven point is the volume of production at which for the first time the contribution equals fixed costs. If the fixed costs are Rs 60,000, then the production level at which the break even is reached, is
a. 2,000 units
b. 4,000 units
c. 5,000 units
d. 6,000 units